Ladies and gentlemen, good day and welcome to the TD Power Systems Limited Q1 FY 2025 earnings conference call. This conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations 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. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. Now, I hand over the conference over to Mr. Nikhil Kumar, Managing Director for TD Power. Thank you, and 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. Now let me get into the details about the TDPS's financial performance for the quarter ended 30th June 2024. Our total income on consolidated basis was INR 2.77 billion versus INR 2.24 billion, an increase of 24%. Profit after tax and other comprehensive income for the quarter is INR 356 million versus a profit of INR 261 million, an increase of 36%. We continue to maintain a very strong cash position of INR 2.26 billion. Standalone, our total standalone income for Q1 was INR 2.66 billion versus INR 2.36 billion over the same period last year, increase of 13%. EBITDA for the quarter is 17.35%, including other income, but excluding exceptional and treasury income.
Profit after tax and comprehensive income for the standalone for the quarter is INR 312 million versus a profit of INR 29.1 million in the previous year, an increase of 7%. We've had a temporary cost increase due to large deployment of temporary workmen, additional subcontracting in the quarter due to union issues. The situation is largely mitigated in Q2, and we will see a tapering and dissipating effect of this in the following quarter. Order book for manufacturing segment is INR 12.15 billion, out of which INR 7.88 billion is generator and motor, INR 3.94 billion is railway, spares and aftermarket business is INR 0.16 billion, and the turnkey business is INR 0.17 billion. Export and deemed export business for us for our motor and generator business, excluding railways, is 66%. Order inflow has increased by 25% over the previous year as follows.
Strong order inflow momentum continues in this quarter also, both from domestic and international markets. This is the highest order booking in the history of the company. We've had an order inflow in the current year of INR 2.97 billion, and the previous year we had an order inflow in the same first quarter of INR 2.37 billion. We have extremely strong growth in the export business from gas turbines, gas engines, and also from motors. Order inflow from direct and deemed exports is INR 2.14 billion compared to INR 0.87 billion in the previous year. Exports and deemed exports order inflow is 72% of the total order inflow for Q1. Now I move to order book market guidance. Our market conditions. Overall, the order inflow continues to be very strong from both domestic and exports in our motor and generator businesses.
This rate of order inflow will support the sales guidance that we have given for the present year, that is FY 2025. Most likely, we expect the number to be in the region of INR 1,200+ crore. This is a growth of 20% in top line compared to the previous year. Margin growth will be faster than sales growth due to operational leverage. Margin growth will be in the region of 3%-4% more than the sales growth. Coming to order booking scenario. Domestic market. Order booking in the domestic market in Q1 was weak. We have seen the slight pause during the first quarter due to the election effect. We had a very strong pipeline, but orders were not getting decided. Halfway into Q2, we can see the pickup in order booking and the strong uptake in the domestic order inflow.
In the international market, it's just the reverse case. Our order booking in Q1 is driven by big orders in the segments of hydro, gas turbines, gas engines, and as well as motors. The gas turbine and gas engine business is strongly driven by demand in oil and gas, data centers for artificial intelligence, grid stabilization power plants. We are also seeing big orders coming in from Ukraine for gas engines since the war-affected country has severe power shortages. Both our major gas engine customers have asked us to be ready for huge increase in order volumes for next year. Hydro in Southeast Asia, Nepal, and parts of Europe continues to be booming with a strong pipeline of orders and inquiries. The Indian market is also slowly picking up, and we have some orders from the national project in Karnataka.
In the motor business, we continue to grow the business at a healthy rate, and this year we will definitely cross INR 1 billion, order inflow. In particular, we're getting a lot of export orders from the Middle East, and they're providing great references for us to build our business for the future. We're also executing orders for motors to be used in hazardous locations for the oil and gas market, which will open the doors for big orders in the future. In general, we're concentrating on oil and gas, water, utilities, lift irrigation, nuclear power plants, and large motors required for fans, pumps, and compressors. In the railway segment, we are waiting for a change in the business scenario in the domestic market. However, we are pursuing a number of exciting export opportunities, and we will come back to you after we have some success in this segment.
We're close to halfway point in this financial year, and so majority of the incoming orders will start moving into next year, that's the FY 2026 execution. Based on the order inflows we had in Q2, we have reached the order booking required to meet our target for this year. Looking at the trends and pipelines, we are extremely upbeat about the numbers for next year. More guidance will be provided in the upcoming quarters. Export markets continue to be the driving force for our growth. It covers more products for TDPS and more geographies. We also have more OEMs. Some of them are giants, and we have a much larger market to address. The domestic market will always be important to TDPS, much larger opportunities lie outside India and more sustainable demand.
We are guiding for about 65/35 or 70/30 as being the ratio of export order inflow to domestic order inflow for the next four to six quarters. This brings me to the end of my initial remarks. I'll now be happy to address any queries that you may have. Thank you.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Rahul Jain from JM Financial PMS. Please go ahead.
Hi, sir. Congratulations on the good set of numbers. I had two questions. At what capacity utilization are we trading as right now? I see when the generator supply in the last eight quarters has been in the range of INR 120 -INR 130 approximately. When do we see volumes inching up? Will the year be more of a realization-led growth?
No, I'm sorry. I think the numbers that you have are wrong. What was it? Can you correct the numbers on the total number of generators?
Generator supply. Yes.
I will just give you the number. Just a second, please.
This is not realization base growth. We are producing more machines.
It's 1,419 generators.
When I see quarter-on-quarter basis, it has been in the range of INR 120-INR 130 generator supply.
INR 122 was during-
Yeah, correct. If you take larger generators, we will have a lot higher value, and we'll have a lower number of generators. I think the volume-
In terms of generators.
Hello? Yeah. I think I've answered the question. This is not a realization-led story. We might have produced larger machines in Q1 this year compared to Q1 last year, and for that we have a higher value. We are running pretty high on capacity utilization right now. Our new plant will not be ready until H2 next year. Of course, we have capacity, and we will not let go of any orders or let go of any growth opportunities just because of the situation. We are doing everything to push the capacity utilization or to increase capacity within the existing plant until the new plant is ready. Yeah, at the moment we are quite full.
Sure, sir. Thanks for that. My second is, I know you have explained few things very well on the demand side, but wanted more color on the same. When I see your order book break up, analyze it over the past few quarters, domestic order book has been largely flat. Whereas export order book has been scaling up quite well. On the export side, which markets are you seeing in the past three, four quarters, and which are the markets you expect to see demand continue to be healthy? On the domestic side, how is the demand shaping up for you? In which product segment or which markets are you seeing a good traction?
As I mentioned in the earnings call speech, for us, exports present a much larger opportunity because we have more verticals. We are working in the gas engine business, gas turbine business. We are geothermal. We have the traditional steam turbine hydro. We're also looking at export opportunities for traction motors outside India. Definitely for us, the export market is a much larger opportunity, and we are seeing more growth coming for us from these segments. In particular, we are seeing very big growth taking place in gas engines, gas turbines and hydro. Looking at the pipeline of orders that we have, the indication that has been given by the OEM for next financial year, they have asked us to be ready for big number increases.
We are expecting that the volume of business for exports will continue to be sustainable and will grow significantly. For next year, indicative holdings have been given to us to be prepared, and all I can say is that it's extremely exciting, and we will have extremely good growth next year also.
On the domestic side?
On the domestic side. Okay. We had a little bit of a drop in Q1. We are seeing the market picking up once again in Q2. Overall, for us, the market is going to grow, but it's not going to grow at the same rate as what the export markets are growing for us. That's just where it is. We're not losing any business on the domestic side, but the domestic market, it has to recover from the first quarter, and then overall for the year, recovery from the first quarter numbers and then showing some level of growth is what we can expect. It's not going to be the big growth, what we're seeing in the international market.
We'll maintain our market share in the domestic market and exports.
Yeah. Market share is not the concern point. It is the growth of the domestic market, which is the concern point.
It's across the industry. Okay. Thanks a lot, sir. That's it from my side, and all the best.
Thank you.
Thank you very much. Ladies and gentlemen, you may press star and one to ask a question. In order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Jonas Bhutta from Birla Mutual Fund. Please go ahead.
Hi, Nikhil, and team. Congratulations.
Hello. How are you?
Fine, sir. How are you? If you can sort of break it up into two parts, if you can talk about the strategy in the railway piece. As we head into the sunset of the existing contract that we have with Alstom in terms of supplies over the next maybe three, four years. There was expectations that they win some orders on the locomotive side, which have been delayed. We had this opportunity come through in terms of our traction motors. Where are we in that journey of either scaling up our railway business beyond the current INR 100 crore-INR 120 crore odd kind of top line? How should we think through of this opportunity over a three to four-year period? That's my first question.
Yeah. Alstom has not won any order. They were L1 for the high-speed trains. They gave up that order. We knew about this 6 months ago, even though it was out in the news yesterday. We knew about this long back. There are no fresh tenders coming up for freight locomotives in the near horizon. We are pursuing number of export opportunities. All I can say at this point in time is they're fairly advanced, and we are very optimistic. We are looking at these export opportunities to replace this current order that we have and also to provide growth for us. Both these opportunities will be long-term contracts. They will not be across 10-year contracts, but it'll be more in the region of four to five-year contracts. We expect to close them in the next, I would say, four to six months time.
It's going well, and we are very well placed. The second option for us is to produce traction motors for the Indian railways, for their production of freight and passenger locomotives. As I've been mentioning in various conference calls, this market is extremely brutally price competitive for the past few quarters, and we have been largely staying away from that market because it does not make sense to make machines at those prices. Nevertheless, we are producing small quantities and putting them onto the market and remaining active in that segment, not withdrawing completely. Strategy is to just be active to a minimum extent, and then once the prices recover, to go a little bit more aggressive in that market. The opportunity size is still there for that segment. It still can be INR 100 crore market for you for TDPS.
As I said, we really can't control the price war which is taking place. More realistic, I would say, is that some of the things we're working on right now on the export business will fructify, and we will be happy to announce this to the market whenever that happens.
Sure. The second question was around motors, the synchronous motors. There, if you can talk about what our developmental plans are. We did have a good FY 2024 for that business, but the scale-up plan was going to be a lot larger. Can you talk about the progress there? If you can couple that with, because I'm just limited by questions, on the export gas engine side, while you mentioned the existing two clients have asked you to sort of ramp up production for next year, we were also trying to crack a third OEM
What is the progress on that?
These are motors where we had a good year. Last year, this business is still financed by the states and the irrigation projects for state. Payment terms are always a question mark and something that we are very careful about. We don't start projects, or we don't start manufacturing until we're clear about payment terms. For this financial year, although we have orders, we are not very clear about money. We're not really starting in a big way with these projects. We're going to be making some motors, but it's not going to provide the growth that we had expected. Having said that, the large motor market is a big market internationally as well as domestically, and we don't have to worry about a drop in the synchronous motors business to say that, okay, now we have a problem. We don't have a problem.
We have enough opportunities outside India. Inside India, we're making good progress. We are going to build up the order book with the extremely good orders that are set in the area of oil and gas, water utilities, and also nuclear power. This continues to be attract. We will cross INR 1 billion order booking this year. I'll give the guidance for next year for the motor business, but it's in line with our expectations, what we have projected over, I think, last year when we made some projections about the motor business. Coming to the gas engine business. The gas coal engine customer, we have not been able to crack into that business. They have decided to continue with their existing supplier.
Yeah. Thank you. All the rest of the questions.
Thank you.
Thank you very much. Ladies and gentlemen, a reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Pramod Dangi from Unifi Investment Management. Please go ahead.
Yeah. Thanks. My first question is under the domestic market. If you can throw some light on the domestic market, what exactly happening over there? See, we are big on the steam generators in domestic market. Are the industry is not growing at all, in terms of the captive power plant, or is it that the captive power plants are growing, but they are going into the different technology like solar or something else? What really happening over there?
No, that's not happening, Pramod. I don't know. That for sure, you cannot have captive power plants with wind or solar. That's definitely not taking place. The growth from a point of view because now the growth has already taken place for the past two years in the domestic market. We've seen quite a lot of growth taking place, we're talking about growing from a much larger base. We do expect something like, I don't know, eight, 10% growth in the domestic market.
Okay. When we look at the Coal India's number, when we look at the total power situation in India, everybody talks about this power shortage, at least in the last quarter.
There is a power shortage, for sure. Industries, all greenfield, brownfield projects are putting up captive power plants for sure, with steam turbines. That's also sure. There's no other technology which is available. It's just that the pace is not that 20%+, 25% per year. That growth rate we're not seeing in the domestic market.
Okay. Got it. Secondly, on the export for the railway, as you said that we are pursuing a few order or one order in the export market for the railway, which is expected to come maybe in two or three quarters from here. Is it with the similar kind of OEM which we are getting today or is it in a different altogether different OEM?
I just gave very brief information, Pramod, that's all I would like to share at this point of time. As I said, we're very optimistic and upbeat about being successful in this. Until we get some more information, I would like to keep it at this level right now. I hope you don't mind.
Okay. No, that's perfectly okay. Thanks a lot.
Thank you very much. A reminder to all the participants that you may press star and one to ask a question. The next question is from the line of Rohit from ithought PMS. Please go ahead.
Yeah. Hi, Nikhil.
Hello, Rohit.
Hi. Very encouraging to hear what your comments on the opportunity that you're seeing, especially in the export markets. I just wanted to sort of try my luck and see what are you seeing for the next year. I mean, this year you're pretty confident of achieving your numbers, just next year, if I can sort of get something from you for next year, FY 2026.
I think that probably we have given on an average, we have said that we're committing as a minimum baseline case, we're committing 17%-18% top-line growth. On a year-on-year basis. Of course, the management goal is to exceed that. This year we're exceeding that number. I will give exact guidance for next year a little bit later. As I said, the base case remains as the base case and the management's intention is to exceed those numbers to the maximum extent possible.
Got it. As we do that, the margins from wherever we will end this year, you've already said margins will grow faster, in by 300, 400 basis points than revenue. That would continue in the next year also if we are able to exceed this expectation.
Until we start the third plant, this will be the case.
Sure.
When we start the third plant, obviously there will be some very short-term setback on that. We won't have the same differential between the margin growth and the top line growth. Obviously, we'll have increased cost coming from the third plant. The increase in volumes after a while will offset that and we will come back to that trend. Except for that short, maybe one year or so period, where the third plant is ramping up. That is what I think for that. If you look for a two-year, three-year perspective, we will be able to start delivering once again on that promise.
Sure. Thank you very much. It's been fantastic. Thanks.
Thank you.
Thank you very much. The next question is from the line of Suhrid Deorah from Paladin Capital. Please go ahead.
Hi. Good morning, everyone. Congratulations. It's been an excellent performance. I just wanted to understand with the third plant coming online, what will be the maximum revenue you can achieve all put together?
At this point, we are talking something like INR 1,700 crore-INR 1,800 crore. Once we have that plant like we have done for the existing plant, we'll find ways to push that to the maximum possible, maybe even past 2,001 when we come to that stage. Right now the plan is to take it to INR 1,700-INR 1,800 with the third plant.
You wouldn't, I guess, can you give a timeline to hit that number? Is it about two years from now?
I have given a guidance. Rohit asked me a question about the top line growth. I have given my thoughts about the baseline case. Of course, the goal of the management is to always exceed that baseline case. Based on that, if you do the quick calculations, then you can see how many years it takes to get to that number.
Got it. Recently there is some news article or some filings about strikes at the plant. Could you just let us know if there's any impact as meaningful or if it's a whole new matter you've heard about?
The union had given a strike notice on the 3rd of June. We as the management prepared ourselves that if the union goes on strike, that we would need to find a way to run the factory. We got an injunction order from the court that allowed us to keep the factory open when they were on strike. The union was barred from interfering with the operation activities and movement of people, materials, et cetera. Based on that, we prepared ourselves by hiring a lot of temporary people and getting prepared for the eventuality that they would go on strike. Once the union goes on strike, then by law you're prevented from hiring temporary workmen from that point of time onwards. Whatever you have to do, you have to do it before they actually go on strike.
Now they have not gone on strike. The strike notice is valid for six weeks. That six-week time has expired because it was given on June 3rd. They have now given a fresh strike notice. There continues to be a migration of people out of the union who have accepted the terms what the management has set. There's been a steady trickle, a steady flow of people who are coming out of the union and accepting our offer. We expect that this steady flow or steady trickle will continue for some time, and then it may reach a point where it may just simply increase because the other option for the union is that this dispute or this settlement will go to the labor court. Once it goes to the labor court, nobody can expect a resolution for at least three to five years.
We don't want that. Certainly they don't want it. I think in the next two, three months or so, there will be a resolution to this matter.
Got it. Thank you so much for that. Just one question sort of on the lines of what you've been alluding to earlier on export growth being stronger. Your order book, INR 500 crore. I don't know if I have the splits here. Is it 70% of this also exports?
No. You have to take out the railway business, which is right now INR 3.94 billion. The rest is the motor generator business. That pending order book is 66% export.
Okay. Got it.
The order inflow for the first quarter was 72%.
Right. Incoming orders will be trending towards the export markets.
What we see right now is that we're seeing a very, extraordinarily high demand coming for gas turbine generators and gas engine generators and hydro. Very high demand, very high pipeline of jobs. Some of the numbers that our OEM is talking about are really big for next year. The growth for the company is definitely going to come in these segments. We have, of course, the steam turbines, which is also growing. Geothermal is also growing for us. The domestic market, which is growing, but it's not growing at the rate at which our export markets are growing. Therefore, the ratio is going to get more skewed towards export for us. Although the domestic market is also growing.
I have a question. I'm asking from a position of ignorance. Europe was connected, so Ukraine would have been connected to Russian piped gas sources. Post the war, I'm guessing those pipelines are now closed, and they are trying to get alternative sources. Is that already in place, where they're getting supplied gas from different locations, and they are now using your turbines to generate power?
I'm not sure where they're getting the gas from. They could be getting the gas also from LNG terminals which were installed in Europe, and then that's where they're getting the gas from. Whatever it is, there is a huge demand for gas turbine and gas engine power plants right now from the Ukraine. Their basic power infrastructure has been destroyed, and they need electricity badly, and a lot of it. We are seeing from our OEM customers indications of large orders coming in from Ukraine.
Thank you so much for answering my question.
Thank you very much. Thank you. The next question is from the line of Alisha Mahawla from Envision Capital. Please go ahead.
Hi, sir. Good afternoon. Thank you for the opportunity. Sir, first a clarification. Did you say that the third plant is coming in 2026 H2? I thought we were expecting it in H1.
No, it's going to be FY 2026 H2. Yes.
Has it been delayed by a year?
Next year, October or so we'll be commissioning the plant.
Has that been delayed? Were we earlier expecting it in H2 of this year?
Yes. It's delayed by about three months.
Okay. Also, any update on the tie-up that we done with Dresser-Rand earlier last year? What kind of order inflow are we seeing on that, and how big can that be in the future?
While the potential for that to remains exciting, the pace at which it is growing is not something that I am happy with or my team is happy with. The potential still remains large and will remain large. Working with large companies, there's a lot of inertia, and it just takes a longer time. We're going to give it that time. The potential for that opportunity is still there. It's not gone away. We need quarter on quarter, year on year growth and numbers, and if it's not happening there, then we need to find other ways to grow, and that's what we're doing.
What kind of order inflow would we have seen from them YTD?
No, I don't give individual customer order inflow numbers. I'm sorry.
Sure. I understand. Sir, next, wanted to understand, you've been mentioning in the call that we're seeing good demand from the international markets. With the rise in freight cost, how are we seeing that? Can that impact our margins temporarily, container unavailability, can that impact our execution? Any thoughts or color that you would like to share?
With the problem in the shipping industry?
Yes.
Yeah. I think transit times are a little bit longer. We are factoring that into our delivery times with our customers. People are asking us to push up delivery sometimes by one or two weeks, and that's not a big deal. We can do that. That's what we are doing. We don't see shipping costs. They may have gone up, but we don't see them growing to the level that it was in the past post-COVID. I think there's a lot of supply of container capacity coming into the market, which is keeping a check on prices. We're not seeing any concern in this area at the moment.
The increase in freight cost currently is not alarming for TDPS then?
Most of our contracts are export contracts for us. We're not paying for this freight cost. Most of our customers have long-term shipping contracts with the shipping line, where they negotiate for price stability. We're not seeing them coming back to us and saying that it's become uncompetitive for us to ship from India and things. We're not hearing this from anybody as yet.
Understood. Last question. Any comments on revival in Turkey? We were hoping that maybe this year things can pick up. Is there any sign of that? At one point, we were considering shutting that plant altogether. Any thoughts on that?
Yeah. We have filed the termination notice to shut shop over there temporarily, to pack all our equipment and leave it on standby in a warehouse. That plan is now in motion. There are opportunities which are available in the market for some orders, but it's too small for us to think of keeping a factory open just for some small business. We probably should make those machines from India and ship it from India. At the moment, the decision is to put everything, all our equipment, into a warehouse and then wait for some time. Yeah, in effect, it means that we are suspending operations. Not closing, but suspending operations.
Understood. Just one last clarification. Of the third plant, CapEx still continues to be INR 120 crores or any revision in that?
Yeah, INR 120 plus, minus, yeah, around that number.
Okay, great. Thank you.
Thank you very much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. The next question is from the line of Karthi Keyan from Suyash Advisors. Please go ahead.
Hi. Good afternoon. A couple of questions. One would be on the gas engines and gas turbines, of course. Would you know the final destinations for these? You mentioned Ukraine as one of the areas. When you talk about very strong orders for next year, would you be aware of the destinations? Geographical destinations, I mean.
Generally, we can say that the machines are going to go into Australia, U.K., Argentina, U.S. market, and Ukraine. Generally. That's where I would say the big demand is going to be, where we could say probably 50%-60% of demand is going to come from these five, six countries. The rest is going to be from all over the world.
Given that you expect a substantial increase in volumes for next year, would you be upping your investments in automation? Because that's one of the points you highlighted when the plant visit happened also.
No. We are not changing our investment plan. We're going to plug the assets right now that we have in current two plants. Maybe we'll add shifts, we will find a way to not lose a single order and produce more from the same two plants. Once the third plant is up and running, then we will have some relief in terms of for the current two plants.
Yes. If you'll allow me to ask you a slightly ticklish question. Given the labor issues, both in terms of the strikes as well as all the political noises around, how do you think about, and of course, the inflation aspect, how exactly do you think about this problem, say, from in the near term and relatively longer term basis?
Look, I think that a wage negotiation has to be, there's always a question of give and take. We've had 25 years of industrial peace in our factory with very, very good relationships with the union. Unfortunately, this time we have a very militant group of people who are demanding something which is very, very unrealistic. We've had a number of rounds of conciliation with the Deputy Labor Commissioner and Assistant Labor Commissioner in Karnataka to resolve the issues. The feedback that we have is that the offer that we have made is already very generous. I have no doubt that what we're offering from a financial perspective is generous and it is a balance between expectations of the workmen and also keeping a reasonable balance on the salary increases and the capability of the company to pay.
That's always been the focus on which we have approached this thing. That also does not work for worker salaries, it also works for management salaries. We have to do the same kind of balancing act when it comes to management salaries, where we have to balance the expectations of the people with the ability to pay and the financial performance of the company. Also looking at medium long term, say which way, which direction, what is the slope of the graph, basically. We will find a solution, because basically the financial package is generous. We will find a solution. I said, there's a trickle of people, every week, who are moving away from the union and joining and taking the package. Over a period of time, this will just fall apart. Fundamentally because the financial package is good.
Right. If reservations kind of a thing becomes a headache, how do you think about that aspect?
I don't think that we are subject to reservations.
Okay. Last quick question. Any comments on how-
Maybe request you to turn to the question queue.
Yeah. I think last question is okay. Go ahead.
I was asking you about the retrofit opportunity with Siemens.
It's a part of the whole market plan, the retrofit opportunity, and it's a part of the business plan. There are nothing exceptional for me to talk about right now.
Okay. Sure. Thanks and very best wishes.
Thank you.
Thank you very much. The next question is from the line of Shrinidhi Karlekar from HSBC. Please go ahead.
Yeah. Hi. Thanks for the opportunity and congratulations on the quarter results. Just one question from mine. Sir, would you know which are the end market industries that are driving this strong demand for gas turbines and gas engine generators in the export markets?
I just answered this question, the last question was just this, but I'll repeat it once again for you.
Yeah, apart from Ukraine.
Yeah, I just mentioned four of our other countries, but I will again do it for your benefit. I had said.
No, sir. Not the countries. I want the application of the machine which is used in.
Application?
Yeah. As in power backup, data center, that kind of thing.
Basically, the applications would be base load power generation. For example, in Ukraine would be basically base load power generation. I would say, in some countries it would be grid stabilization, where you would need to have these gas engines coming into the grid when there is a drop of renewable power generation. For grid stabilization, you need to have hundreds of megawatts of power coming instantly onto the grid. That would be one major application. Then, third major application what we're seeing is basic power and backup power for data centers, which are mainly driven by the artificial intelligence investments taking place in America. That will obviously spread over to other countries, where people would want to have, the countries would like to have their own data centers in their own countries versus being completely dependent on the U.S. for all the data storage.
This will continue for many years to come. There's emergency power. These are, I would say, the main applications for the gas engine and gas turbine generators.
Right. It looks like a kind of a structural demand for few years, right? Not like one time demand.
Yeah. That's not for sure.
Yeah. Sir, some of the core industries-
It's not going to be a huge demand for the next 10 years, I would say, but at least two, three years. Then it will shift to something else.
Right. Sir, does it also have application in the core industries, and are you seeing demand from the core industries' investments?
Which country are you talking about?
Like, oil and gas refineries, steel. Does your end product go into those applications, and are you seeing demand from those markets?
In India?
No, global.
Yeah. Vinay, maybe you can answer this question, please. If you are there. Hello.
Vinay, are you on the call? My colleague, Vinay Hegde. I don't think he's on the call. In India, definitely, all the industries, steel, cement refineries, everyone requires base load power from steam turbines, and that's where the demand is definitely coming from. Internationally, the demand for steam turbine generators is more from the point of view of renewables. We see waste heat recovery, garbage burning plant, biomass power plants, and the waste heat recovery. That's where the demand is basically coming from the international perspective. Wherever process plants require steam for the process, like paper manufacturing and stuff like that, you would need to have steam turbine generators. That's the industrial application from an international perspective. India is all over the place because captive power is required for powering up the industrial complex itself.
Right. Yeah. Thank you for answering my questions, sir. All the very best.
Thank you.
Thank you very much. Next question is from the line of Praveen Prakash Motwani from Bank of India Mutual Fund. Please go ahead.
Hi, team. Thanks for this opportunity. Sir, sorry I joined a little late. What is our revenue guidance and margin guidance for this year and 2026?
We have given a revenue guidance of INR 1,200 crores.
Okay.
We have not given a margin guidance.
Sir, for 2026?
We have said that the revenue growth will be around 20%. We said that the margin growth will be 3% or 4% above the revenue growth. This is what we said.
Margins would be maintained, right? What [Sambhav] said.
I said margin growth will be 3% or 4% more than the revenue growth.
Understood. Okay. Got it. Sir, one more question is, if I see your console number, you have reported close to around 32% PAT growth year-on-year. On the standalone number, the number is more or less not grown to that much. What is the reason?
Yeah. I think since you joined late, I really have to go back and repeat what I've already said two, three times. I would prefer to answer your question offline. I'd be happy to answer your question once again after this call.
Okay.
Yeah, he can connect with me, so I'll address his query.
Okay. Thank you.
Thank you.
Thanks.
Thank you very much. The next question is from the line of Mahesh Bendre from LIC Mutual Fund. Please go ahead.
Sir, my questions have been answered. Thank you so much.
Hello, Mahesh. How are you?
I'm fine, sir. My questions have been answered. Thank you so much, sir.
Thank you.
The next question is from the line of Pramod Dangi from Unifi Investment Management. Please go ahead.
Yeah, hi. Thanks. My earlier question was answered. The other question which I had was on the LNG. We were in the previous some call, we have spoke about the LNG opportunity in the U.S. and the Europe, and lot of CapEx happening over there. Any update on that? Were you able to tie up with the OEM, and how we see this?
The product qualification is still going on in certain parts of the market, Pramod. We are getting some business for TDPS generators in this market. The growth in this particular segment is, as I said a little bit earlier, is dependent on our relationship with that multinational company which we have tied up with. It's not happening at the speed at which we earlier thought. The opportunity is still very large, it still is there. It will take a little bit longer time, it is there for sure.
Okay. Yes. Sure, thanks. All the best.
Thanks.
Thank you very much. Ladies and gentlemen, due to time constraint, that was the last question for today's call. I would now like to hand the conference over to the management for closing comments.
Yeah. Thank you for joining us on the conference call. If you have any further questions, please feel free to get in touch with our investor relations team. I look forward to meeting many of you next week, over various investor conferences which are taking place in Mumbai. I look forward to face-to-face interactions with many of you. Thank you very much.
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.