Ladies and gentlemen, good day, and welcome to Q4 and FY23 earnings conference call of Triveni Turbine Limited. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishab Barar from CDR India. Thank you, and over to you.
Good day, everyone. A warm welcome to all of you participating in the Q4 and FY 23 earnings conference call of Triveni Turbine Limited. We have with us today on the call Mr. Nikhil Sawhney, Vice Chairman and Managing Director, Mr. Arun Mote, Executive Director, Mr. Lalit Agarwal, Chief Financial Officer, Mr. S.N. Prasad, President, Global Sales Products, Mr. Sachin Parab, President, Global Sales Aftermarket, Ms. Surabhi Chandna, Investor Relations and Value Creation, along with other members of the senior management team. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature, and a statement to this effect has been included in the invite, which was mailed to everybody earlier. I would also like to emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner.
We will start this call with opening remarks from the management, following which we will have an interactive question and answer session. I now request Mr. Nikhil Sawhney to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir.
Thank you very much, Rishabh. A very good afternoon to all people participating on this call. Welcome to the Q4 FY 2023 investor call for Triveni Turbine Limited. We're very happy to have you here today because it's been a record year for us and a record quarter as well. We've had the highest ever annual revenue, EBITDA, and order booking, along with a record closing order book position for FY 2023. This all augurs very well for FY 2024 as well. The record revenues of INR 12.48 billion in FY 2023 was an increase of 46.4% year-over-year, while EBITDA for the year stood at INR 2.76 billion, which was higher by 43.9% year-on-year with a margin of 22.2%.
The profit after tax for the year was at INR 1.93 billion, an increase of 57.7% year-on-year after adjusting for the exceptional income in the previous year. We also had the highest ever annual order booking of INR 16.05 billion during the financial year, an increase of 35.6% year-over-year, which led to a record outstanding carry-forward order book on the 31st of March 2023 of INR 13.28 billion, an increase of 36.9%, which again, as I said, augurs very well for the financial year FY 2024. The company has also, during the course of the year, had two schemes by which it has paid back capital and equity to shareholders. One was through a buyback and the other was through a dividend.
The buyback was to the extent of INR 190 crore during the year, which including taxes and other charges, totaled about INR 240 crore, including a dividend of INR 50 crore. The total payout to shareholders was in the extent of about INR 290 crore for the financial year. The return on capital employed was 32%, and the return on invested capital, excluding cash on book, was over 250%. The company has a stable cash portfolio of INR 6.71 billion, which is down by 11.5% based on the outflows that we've had during the year. The cash accumulations for the year have been fantastic. We again have had a higher free cash flow than our net profit.
We've had a negative working capital again for the year ended FY in 31st of March 2023. Coming to the order booking, the product order booking for the financial year increased by 22% year over year to INR 11.43 billion, the highest in the company's history. The finalizations of orders happened from all segments, from industrial customers followed by power producers as well as API drive turbine. The company received orders from over 27 countries as compared to 22 countries in the previous financial year. The majority of the order booking continues to be from non-fossil or renewable energy-based solutions, solidifying our market position in this rising segment.
We also witnessed strong contribution in the domestic market from sectors such as sugar, distillery, food processing, paper and pulp, chemicals and waste heat recovery coming from segments such as steel and cement. In the international market, the company was able to close key milestone orders in both small as well as large power ranges of turbines from regions like Europe, Africa, Central and South America as well as North America. The overall inquiry generation for the year increased by over 41% year-over-year in FY23 to over 9 gigawatts.
In FY23, the aftermarket segment experienced an extremely strong growth owing to a significant influx of new orders. We also, as I pointed out during the course of the year, received major orders from the SADC region, which we have alluded to in the costs of other expenses, other expenses which are part of the notes of accounts. To reinforce its customer-centric philosophy, the company has strategically located service offices throughout India and international offices in Europe, West Asia, Southeast Asia, as well as Africa. The success of the aftermarket business is evident in the order booking and sales growth in FY23, which saw increases of 88% and 82% year-over-year.
The aftermarket contributed to 29% of order bookings for the year, up from 21% in FY22, the company is confident that this segment will continue to provide a significant share of its overall growth in the coming years. During the year, the company continued its growth both in the domestic and export sales. However, export sales reported a relatively higher increase of 121% in the current year. The export sales, as you would know, would be based on the order booking that we had in FY22, as well as the booking bill that we had in part of Q1 as well as part of Q2 of FY23. As a result, the contribution of exports in total turnover has increased to 45% in FY23 versus 30% in FY22.
Exports are a core focus for the company, as we believe a significant part of our long-term growth will be derived from our initiatives in the international market. In FY 2023, the aftermarket segment experienced strong growth owing to an influx of new orders. This has strengthened this segment already, but I have to admit that there's more work that we have to do on the internationalization of our efforts as well as especially our workforce. On the R&D and engineering efforts, the company's global focus and outreach are evident in its constant efforts to file for patents and industrial design registrations in various international jurisdictions, while simultaneously expanding its intellectual property portfolio in India.
The company has filed for IP protection in all geographies, and currently it has over 338 IPRs which it has filed for, unique IPR that it has filed for, up from 316 IPRs in the previous year. As far as the market update goes, and I'm sure a lot of you would be interested, we saw a degrowth in the total international market from in excess of 12 gigawatts to about 8.8 gigawatts. This was due to a significant reduction in the size of the Chinese market and orders that were placed in the Chinese market for this last year, as well as a segment of gas turbine combined cycle. Both of these segments are markets that Triveni Turbine does not participate in.
In fact, for the markets in which we do participate in, we've seen a growth in the market. We believe that if we look at next year's data, which is calendar FY 23, we will see a reversion to the long-term mean of a growth in this entire market of industrial heat and power as well as renewable energy solutions. The inquiry generation, as I said, for the company increased to 41% to in excess of 9 gigawatts. This was led by a 82% increase in the export inquiry book, while the domestic inquiry book declined by about 16% year-over-year. We are not perturbed by this number of the decline in the domestic inquiry book, as the segments in which we are...
In terms of the growth that we are seeing in the domestic market, it still seems to be quite robust. Our data for inquiry book in the domestic market does not include tender-based data, which is based on government procurement, which has been quite good in the last several quarters, and we believe will be very strong in this current year. Given that fact, there will be overall growth in the domestic market as well as inquiry book if we do include government tender data. For Triveni Turbine, we are extremely optimistic on the results and order booking at the end of FY23, which gives us very clear visibility on the revenue that we would be able to achieve in FY24, which will be a substantial growth over FY23.
With our expansion already completed, we have the capacity now to produce in excess of 300 turbines, and I'd be happy to talk more about our capacity during the Q&A. Beyond physical investment, the company has also added 20% to its workforce. We increased our workforce by 20%, and we believe that we will be investing further into people and increasing our workforce again quite substantially in the financial year FY 2024 as well. The rise of the company's exported aftermarket order booking, as well as a strong carry-forward order book and robust order pipeline gives us visibility to a very solid year ahead. Both in the domestic and aftermarket, the domestic and export market as well as export seem to be giving us great confidence in being able to deliver these results. With that, I'm happy to take questions. I'll hand it back to 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. We have our first question from the line of Himanshu Upadhyay from O3 Capital. Please go ahead.
Yeah. Hi. Congrats on great set of numbers. One question I had was, if we look at the breakup of revenue and also order booking, the aftermarket has grown at a very fast rate and even faster than the product business. Is there any amount of cyclicality in the aftermarket business or, we can believe that this will always be
No, thank you. That's a very good question. If I may break the question into 2, 3 parts. Aftermarket comprises of 2 distinct segments. One is parts and service for our own turbine, and the other is refurbishment, which is for third party turbine users. The parts and sales for our own turbines will grow based on the offerings that we have as well as the installed base. This will grow at a rate of which is commensurate with the product sales growth. The outperformance really happens in the refurbishment segment, which is I won't say cyclical, countercyclical, but it's a little bit more opportunistic at this point in time.
We are trying to establish a localized presence in certain markets so that we can build confidence with the general market so that we could get less cyclicality in these refurbishment orders. Having said that, and I'll have Sachin come in here, we're very optimistic that this segment of refurbishment will grow very rapidly in the years to come. Will it be to the same extent of 80% plus growth? I don't know. We are very, this is a segment that will always be high growth, and we will try to not look at this in a cyclical manner. Sachin, would you like to provide some visibility around the aftermarket business?
Yes. As rightly mentioned by our vice chairman, the refurb business is seeing better growth than the parts sales and service business. The parts sales and service business is very consistent, and our aggressive marketing efforts for the refurbishment business have started bearing fruit. As we are expanding our presence in international markets, the trend will be good. It will be a good growth rate. The cyclic factor is not going to be a big factor. It's going to be more or less consistent. Maybe not such high rates of growth, but a reasonably robust double-digit growth will be there.
Okay. Okay. One question more means, one was on this. See, this, we are incorporating a subsidiary, okay? Where we'll be investing INR 5 crores or more to make Triveni brand more visible. Is that organization or a company would be 100% owned by Triveni Turbine only, or it would be also jointly owned by Triveni Engineering & Industries Ltd.?
You know, right now the proposal really hasn't gone up to the Triveni Engineering board as yet. The point is that when we look at the export market for Triveni Turbine, and it's for the Triveni Turbine only, the question is that we need to improve the recall to customers. We need to improve the branding profile of Triveni being a technological leader. We find that missing. We need to support our sales and marketing efforts on the product side with general branding investments. To the extent that the brand is generic and can be leveraged across more companies, which makes it a little bit cheaper for Triveni Turbine to enter into it, this is a marketing effort. It's a branding communication effort.
I think that we'd be able to provide you more data, more disclosures as and when things get finalized. It is more of a enabling resolution that was passed by the board to allow for this investment. We provide in the months to come.
See, one small suggestion here.
Yeah.
In such a similar effort was also done by another engineering company, okay? Where three, four group companies were trying to, means, make a brand through all the other companies, means everybody unitedly, a family-owned organization. Again, they were listed companies. Over a period of time, disputes came. When the disputes came, everybody is now fighting for the brand is mine, brand is mine, and brand is mine. Okay? I had a bad experience.
Thank you. Yeah. We'll take that as positive positive feedback. We'll try to develop systems. Systems already exist. I think we'll provide you some visibility as to how this is something that may not be an issue for Triveni Turbine in the future.
Okay. Okay. Thank you, and best of luck for your future.
Thank you so much.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to answer queries from all participants, kindly restrict your questions to 2 at a time. You may join back the queue for follow-up questions. We have our next question from the line of Amit Mahawar from UBS. Please go ahead.
Yeah. Hi, Nikhil. Congratulations on great results. It's heartening to see after-sales team delivering some great numbers in 2023. I just have 2 quick questions. First is, in the global, you know, installed base, of, you know, smaller turbines, what is our current share? That's question number 1.
Well, Percy, hi. Hi, Amit. Thank you for your congratulations. It has been a very good year. You know, instead of, what we've decided, and because the split in the market that we had of below 30 megawatts and above 30 megawatts was a little bit artificial. It was done at a point in time when we had a joint venture with another party and then sort of the distinction that we could create. I think from now we talk about it more in terms of small turbines and large turbines. The market share that we have in the Indian market has been consistent at about 50 odd %, and that's something that we're quite confident of retaining.
The market segments in which the markets in which we're getting orders from, or the industries that we're getting orders from seem to be reasonably robust, and our inquiry book seems to suggest that we will be able to maintain that market share. On a global basis, excluding India, of course, our market share is going to be quite small, but the Indian market does contribute quite significantly to the extent of about approximately 20-25% of the global market. If we include the Indian market in the, in our total global overall market share, it would still be in the region of, and look at it from two bases.
If you look at the overall market, including markets in which we don't currently operate, which may be such as China, Japan, and certain niche industrial markets in terms of applications, our market share should be in the region of approximately 12%-13%. In the markets in which we do participate, the market share will be somewhere about 22%-24%.
Okay. Interesting. Thank you. Second and last question is, if you take the next 2, 3 years, the way we are committing capital, right, and hiring people, clearly for global growth, is it right to assume that the end markets that we cater to, right, biomass, district heating, right, process steam based turbines, the more business cycles go through troubled times because this is an investment which is lower payback, right? We'll actually be promoting more industries to install process steam based businesses and that's actually a good treatment for us. Can I say next 2, 3 years, the penetration opportunity for Triveni?
Sorry, your line is disconnected. We'll move to the next question from the line of Harshit Patel from Equirus Securities. Please go ahead.
Hi, sir. Thank you very much for the opportunity. My first question is on the domestic cement market. We have seen a lot of companies increasingly opting for WHR solutions, and I think we have also benefited from the same. In your assessment, what proportion of cement capacity in India has already installed WHR turbines by now? If you could highlight the same for steel industry as well, it will be very helpful.
I think we've answered this question in the past as well. In steel, pretty companies set up their WHR recovery at the time of their CapEx installation. Now, setting up the business, setting up the plant itself. In cement, it's an add-on. I think at the last point, we'd said approximately less than 20% had actually installed this. To come to the question that Amit had earlier, maybe he'll join back, which sort of answers your question as well as to what is driving this demand. Triveni Turbine is a manufacturer of industrial heat and power solutions, as well as re-decentralized renewable energy solutions. It's important to remember when we talk about industrial heat and power, that this cannot be generated through photovoltaic or wind.
You know, electricity is a very inefficient means by which to generate heat. The relevance of our solution is as something that the market needs. The market data supports it in the fact that the global market in this range of turbines below 100 megawatts has actually been growing year-over-year. It's been growing more so from a clear renewable energy focus. The renewable energy focus for segments such as cement also highlights the need for investments into energy efficiency.
based on NGT mandates which restricted certain types of fuels such as petcoke, the cost of energy for all producers, including cement, has gone up, which validates the investment into energy enhancement initiatives such as waste heat recovery, which ends up leading to a just a lower cost of energy for the firms. It's a key driver of energy efficiency, the key driver of growth in these segments just based on high energy costs for companies.
Understood. Sir, my second question is on, we had received large orders from South Korea last year. These were for higher megawatt turbines. Just wanted to check on the execution status of the same. Have we already delivered those turbines? If yes, are there any follow-on orders from the same customer or from the same region? That would be my last question.
I'll first ask Arun to answer the question on the status of the orders. Yes, Korea is a repeating region where we get orders from. Prasad can add to that. Arun, if you could just give some visibility on the orders that we had from Korea.
We have had orders from Korea typically coming between single digit orders, but at various ratings. As you know, what we have declared earlier is we have a very prestigious order from Hyundai Steel, which is under execution, which will be completed over next year's time. By and large, we are a preferred.
Brand in Korea, and we command a strong market image there. As regards our order status as on date, we have sufficient orders to carry on, and we are well within the plans of growth that we have, which we have indicated to you earlier. Also, as regards the manufacturing capacity, in the current year, we will be manufacturing over 200 turbines. This is also backed by sufficient subcontract capacity that we have. Our complete expansion is done now. We have no CapEx in the current year also. It will only be a regular CapEx that is for maintenance. That's how we are positioned on the supply chain and the support for our order executions. Does that answer your question?
Yes, sir. Very well understood. Thank you very much. All the best.
Thank you so much.
Thank you. We have our next question from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead.
Hi, sir. Thanks for taking my question. Just harping on the global market which you mentioned, which declined by, you know, from, I think 12 gigawatt you mentioned to 8.8 gigawatt. And you said largely also because of the reduction in Chinese market. If you could elaborate more, are we talking this about up to 100 megawatt? And, you know, if you can just throw more color.
Yes, yes. It's up to 100 megawatts and for the calendar year 2023. Sorry, 2022. Calendar year 2022.
What do you mean by Chinese reduction?
It was just lower demand from the few orders that were placed in the Chinese market. I mean, I don't... You can guess the reason as much as I can.
All right. Second thing, sir, you mentioned about the 9 gigawatt market. Are we talking about?
That's the inquiry book. Our inquiry book is.
Inquiry book, that again is up to 100 MW, right?
Yes. Yes.
Okay. Second question on the after-markets. I just wanted to understand how much you know of Salesforce order is still pending. Are we in pipeline for more orders to be received of that kind? How much is the % contribution of Services, you know, in the after-market?
The percentage contribution of this, I would say it'll be about 15-20% in terms of this current order for the full year. This is a. As we pointed out earlier, we have a unique opportunity to overhaul large utility turbines. We thought that this is a great opportunity for us to expand the breadth of our services, but also to establish a presence with in a region which has very poor offerings for this type of solution. More than that, it allows us to move up the value chain over a period of time to move from what are relatively poorer margin services to a higher margin sales type order.
I think the fact is that you will see more of these orders coming up in the next quarters as well. I think that what you should take away from it is the fact that this is allowing us to be more locally present with our customers, to the extent that even though exports as a percentage of sales increased as well as aftermarket as a percentage of sales increased, but our margins were largely flat, it was a consequence of some decisions that we took to expand turnover more rapidly than we did from the bottom line to be conscious of that.
As we've always said, we anticipate our bottom line to be, our PBT to be always over 20%, our efforts is always going to be in that regard. In fact, in this current year, our pressure on margins is a little bit less. We have more exports as a percentage of sales, which we will execute in FY 2024. We have good orders on the refurbishment and after-market side as well. Of course, we're quite confident of good margins in this current financial year.
Sure. Sir, about the market share which you talked about, 50% in domestic market, how much gigawatt we are factoring in the domestic market size? Is it up to 100 megawatt or 0-30 megawatt? What exactly is it?
No. I was talking about the small market where we have a market share of about 50%. The overall market, Prasad, could you give some visibility on the overall market in India, what may our market share be?
Yes, sir.
Yeah.
Sir, domestic market wise, we are closer to around the size of the market is around 2,200 megawatt, is market in domestic. Similarly, the market where we are operating globally, that is around 4,500. 4,400 megawatt is size of the market. In domestic, as our vice chairman mentioned, our market share is around 50% there.
Right. This is 0 to 30 megawatt?
Zero to 100 megawatt. It is covering up to 100 megawatt.
Thank you, sir. Thanks.
Thank you. We have Mr. Amit Mahawar from UBS back online. Mr. Mahawar, please go ahead.
Yeah. Amit, sorry for this. I just, you know, will complete the question. Assuming that, you know, globally the investments towards biomass to heating and processing. Keeps going on, are we, you know, having enough capacity both from supply chain, manufacturing, to ramp up our market share? You know, we have certain advantages on cost side on after-sales ramp-up. That's, that's first. Second is basically more, you know. Yeah, that's my first question. Yeah.
No, it's a very good question. I think I had Arun answer this while you may have logged off. Our expansions of that we needed to do in our factory in Sompura are complete. We will be producing in excess of quite a bit in excess of 200 turbines in the next financial. In FY 2024. Based on our current capacities in-house as well as with our vendors and subcontractors, we don't believe any capacity constraint is an issue for us, as we've seen we can expand our capacity within 8 to 9 months. For the next couple of years at least, we have no issue in terms of capacity, both on the manufacturing end.
We consistently work with our supply chain to ensure that they have the capacity that they have for products that are required for the balance of plant perspective. All of it needs to be taken into consideration while executing orders. We don't believe that capacity is a constraint in our supply chain.
Sure. The last one, quick on the API drive turbines, how have we performed, and how do you see that market for us, you know, in last, next 2, 3 years, especially the acceptance of vendors for Triveni? Thank you.
Yeah. The main question on acceptance is over. Prasad, can I ask you to provide some visibility on Amit's question?
Yes, sir. API drive turbine markets, yes, in previous meetings, what we have shared, yes, our acceptability is quite good. We are in the approved vendor list in major OEMs and EPCs, and the consultants approved us as approved vendors for that. Because our presence in the market share-wise, we are on lower single digits, because we see this a big opportunity available for us as going forward. It is a time-consuming process because API finalization approval process took a time. What we see going forward, yes, we'll be seeing these benefits of these registrations. As on today, our market share is quite not small in that, and we see that good potential.
Thank you, Nikhil. yeah.
Segment as well, Amit. We believe that this will be a driver of growth in the years to come. More than that is one is API drive turbine. We see the API power gen market also as something to be quite robust. Especially in countries like India, government expenditure in the API segment is very good, which includes fertilizer as well as upstream/downstream oil and gas.
Sure. Thank you, Nikhil, and good luck.
Thank you.
Thank you. We have our next question from the line of Ashwani Sharma from ICICI Securities. Please go ahead.
Good afternoon. Thanks for the opportunity. Congratulations on good set of numbers, sir. My first question is on the growth. If you can just give us, you know, breakup in terms of volume growth and price growth for the quarter.
Unfortunately, we don't do volume and price. We just give it in terms of rupees only.
Okay. The second question is if you can, you know, these expenses which were there, subcontracting expenses in the SADC market, will these expenses continue in FY 2024 as well?
Yes. You know, the point was these expenses are literally subcontracting charges for personnel. When you overhaul turbines, you need to have people. As these contracts, we believe are something that's quite remunerative for the company, and so they will continue. There'll be growth in them as well because we anticipate growth in turnover in these distinct segments also. I would. The alternative here would be to take these subcontracting charges and put them above the line and then we'd have a more diluted gross margin. It's, I think, better to put it here because it reflects the business more appropriately. These are not raw material costs, and these are charges which are paid for subcontracting of personnel, and it reflects the cost better.
The fact that it has to be highlighted through a note is the governance of it only.
Mm-hmm. Mm-hmm.
Very routine business, you could imagine. It's the fact that we have to highlight it because of significance of the value.
Yeah. Yeah. Sir, third is on the guidance. If you can just give us, you know, some guidance in terms of, top line growth for FY 2024 and margin guidance, that'll be helpful.
You know, actually, I think we made a little bit of a mistake last year when we said that we would be growing by about 35% CAGR for FY 2023 and 2024. As you've seen with that, our growth was significantly higher by over 45% in FY 2023. I think FY 2024 is starting off on an extremely robust picture. We have an opening order book which is over 35% higher than what it was on first of April 2022. So we're in a much better position. The growth in order book gives you an indication of where the market will be. We have, of course, Q1 and Q2 of well, whole of Q1 in terms of product, book and bill, as long as they're smaller turbines, and part of Q2 also.
For the aftermarket, we can go all the way up to Q3 in terms of book and bill. The inquiry book is quite robust, so we're quite confident on the growth. In terms of pinning me down on a specific number, I think suffice to say that the growth will be quite robust. Our earlier guidance is something that I'm not going to retract, it will be that case. That's something that we look at. Margins are something that really, like I said, there's no pressure on margins. There's always a need for us to better it, I agree. At this point in time, what we would rather do is take market share, get more presence locally.
We need to get more manpower, which doesn't pay off immediately, so that will be adding to our overhead. There are certain costs that will go up also. Margins is not really a concern based on the fact that we know what the margins that we've taken our orders on. We've locked in a lot of our costs and, so we're quite confident for the year to come.
Thank you. We have our next question from the line of Rakesh Roy from Omkara Capital. Please go ahead.
Yeah, hi sir. My first question is regarding, sir, aftermarket you have mentioned two parts, like part and Services and refurbishment. Sir, can you highlight on refurbishment market, how much of the market size domestically normally and where we are?
Yeah. You know, see the point of refurbishment is that it's a very large market, both from the perspective of scope, scale, and value. When we look at refurbishment, it is a refurbishment of rotating equipments, including steam turbines, which is where we are in OEM. It would move anywhere from lower value addition work such as overhaul, all the way up to upgradation and e-energy enhancement. The value chain is quite large, and it's duly undefined. What we can say is that approximately 50% of the market is catered to by OEMs and 50% of the market is catered to by non-OEMs. There is significant growth possible. In India, it's really undefined, as to how large the market is for third party services.
We don't have many companies out there offering it on a third party basis. This market exists in many other places, and it's a very robust market, especially in the gas turbine space. If you look at the gas turbine space offering, this is a third party on a third party basis. It's quite a large market, and that's largely centered around the more developed economies.
Okay, sir. Right, sir. sir, my next question is, can you give me the breakup of your order book and which sector Sorry.
Sorry, I don't understand your question. Can you speak a little slower?
Yeah. Sir, can you share the order book breakup of from which sector we get the orders, like?
We don't give that degree of break up because it's not relevant, I think. You know the industry that we're getting from, I think that's reflective of the fixed capital formation in the economy. Sectors such as distilleries continue to outperform. We see good growth there. There's a good demand, which is backed by the government push. You have certain commodity based industries, which have a commodity pricing upswing, which are doing well, including paper. You have markets on the recycling side of recycling paper as well as plastic, which are doing well. You have few orders which we're very happy about, which are coming through in the municipal solid waste incineration space.
It's something that is quite encouraging that local municipalities are taking this problem seriously. We have waste heat recovery orders which are coming from both cement and steel. You have orders from the chemical space as well, which is just reflective of demand. In general, we also have some food processing orders also.
Okay, sir. Okay, sir. Right, sir. sir, my last question is, sir, I try to understand, sir, yes, sir. Maybe I missed, sir, your aftermarket sale increased from 27% to 33% of revenue?
Yes.
Yes. Year on year. Your margin is flat, EBITDA margin. Where I'm missing, sir?
Yeah. Like I just explained, One of the reasons is that this large order that we have from the SADC region is something that is, I think overall margin dilutive to the aftermarket business. If you look at it as a company overall, it's a strategic area that I think that we would like to be into, that allows us to move up the value chain once we are locally present in a certain area. Through this current offering, we have over 1,000 people who are subcontracted through us. We have a very large local presence without much liability, but large local presence which allows us to gain the confidence of local customers.
That will pay off in many different ways.
Thank you. We have our next question from the line of Roland from GMO. Please go ahead.
Yeah. Hi, Nikhil. Thanks a lot for taking my question. A couple of questions from my side is that, one, in the past calls, when we had a very robust order book, we had a visibility in terms of revenue for more than a year, right? Because our inquiry pipeline was also strong. Now, in this quarter, you have mentioned that the inquiry pipeline, at least in the domestic market, is seeing some weakness. How important is it for our overall consolidated business for the inquiry pipeline in the domestic business to again seeing some growth, right? I mean, Can you give a little bit more color on why is this weakness? Is this a temporary-
I don't think I'll discuss it enough. Even though we've seen a degrowth in the domestic inquiry inflow, that is from private sector. When you include government tenders, or PSU tenders, the market is that much higher. So the fact is that it's just because those are binary events of winning, losing, we don't include them in our inquiry book. If you include that, actually the Indian market is actually quite robust. You see, definitely growth in the market going forward. Our end order book, as I suggested, has nearly I'm going to say about 90% of the orders will be executed in FY 2024, 10% will go on to FY 2025. That's normal for any year.
More than anything else, the order booking that we've had in 2 months till date, because this is already a late board meeting that we're having, is very robust, which gives us full confidence for the growth of this financial year.
Sure. Did you see, I mean, have we in the past participated in government tenders? What could be our conversion rate, you know, for these tenders? Would this be at a similar margin compared to the private sector?
The margins are not regulated. We don't price on a differential basis. Maybe slightly higher than regular margins, I think in the domestic market. I think we have a very good percentage of winning government tenders. They aren't very often. We may bid one every couple of years or two, three years, something like that. Prasadji, would you like to add any color on this?
Yes, sir. In the government tenders, yes, these are large scope tenders. Yes, the margins-wise, there's no different strategy we adopt. The margins are quite good. These are on a time-bound projects what we are sometimes we see sudden delays in finalization and all. That is the reason we are not considering in this nine gigawatt inquiry pipeline. As and when this comes into finalization phase, again, based on the competition and all, winning or losing, that time it takes. Based on the historic data, whenever we participated in these tenders, we got a good success. We are hoping towards that.
I would just add by saying that usually we win if we participate.
Sure. That's very encouraging. One last question would be, again, on this international piece where you are saying that our visibility is slightly lower, and that's why we want to probably form a subsidiary which can probably help us increase our brand presence. Is there any particular niche segment where our visibility is lower? Because what I would have thought is that in typically a B2B business, you would have to probably execute a few orders through our metal and then probably we will get.
No, visibility is a different problem than branding and perception. Visibility is an issue of being able to be close to the customer to make sure that you're able to get an inquiry out of them. That is a physical sales-led effort, which is backed by agents to be able to provide that visibility. The intangible of being able to have a better perception is something that we need to work on from a branding perspective, but we need to do it at a low cost and something that we think will be manageable and controllable by the company.
Sure. It's not any different than
Mr. Pralhad, sorry, but your voice is sounding muffled.
Sorry.
I'm sorry, we're not able to hear you. We'll move on to the next question from the line of Devang Patel from Sameeksha Capital. Please go ahead.
Hi, sir. On the overseas business that we have, could you give some more color on what is the contribution we get from different regions or continents or maybe developed markets versus...
Yeah. The nature of the product is that it is customized. It's customized from a performance perspective. It's customized from a order scope perspective also. The scope can include and exclude certain things based on what the, how the customer is looking at it. In general, the more developed the markets, the higher the specifications, and the higher the specifications, the higher the margins. The less developed the market, the lower the specifications and the lower the margin. This is the generic, not only tied into our business, but to every business. You can see from orders to orders. Certain industries also are different.
For example, a high-tech industry in India would give you the same margins, but a low technology industry in India would give you low margins. It wouldn't be different from a low technology business internationally. It's more comparable industry to industry in terms of the technology deployment than it would be from geography to geography. Geography also gives us a good estimation. The fact is that in Europe we see demand coming from areas such as municipal solid waste incineration and renewable energy, where the end product, the end demand from the customer is our production. When efficiency matters to such a large degree, I think you have greater flexibility in pricing.
When it's, when the turbine requirement is more from a perspective of just providing steam to a process in a low-tech industry, the price is a very important factor in consideration, so therefore margins are lower.
Thank you for that reply. I was also trying to get a sense of what is the revenue contribution we get from Europe, North America versus Africa, South America, developed versus less developed countries.
You know, unfortunately, we don't give that breakup because it changes so consistently every year. Like I told you, we sold to 27 markets last year and 22 the year before. We have a total install base in over 75 plus countries, and we've sold turbines in over 80 plus countries. You know, very frankly, it's difficult for us to ascertain anything out of it, and so we're sort of reluctant to give that information out because we don't think it will be meaningful.
Okay. Generally, when you say we have a lot of headroom for growth in our export business, which continent will this come from?
In general, where the size of economies determine the capacity for fixed capital formation. You know, our product fits into the fixed capital formation part of economic growth. The larger the economy, the larger the contribution to our inquiry book. The confidence we get is because our inquiry book is somewhere in excess of 9 gigawatts, this provide us ample opportunity for us to approach it. Significant portion of it, of course, as you'd imagine, is from the export market. That's our confidence that we get from for growth.
Right, sir. Thank you so much, sir.
Thank you.
Thank you. We have our next question from the line of Bimal Sampat, an individual investor. Please go ahead.
Yeah, good afternoon.
Good afternoon.
A few months back, we were talking about supercritical turbines, and also we were looking at another, a similar or adjacent product line. Now that I am seeing that we are doing very well in refurbishment and API turbines, which is a very vast market, and it is very profitable. Are we now going to concentrate on these 2, 3 markets before looking at anything else for the next 2, 3 years? Just one question.
You know, you're right on one aspect. The fact is that we're seeing good growth, our priority is to capture that first. Are these developments and product developments that we talked about, are they put on the back burner? No, not at all. These are something that we continue to invest in. They just don't take prominence because there's, I think, much more immediate efforts that would reflect on results more in the short 1 to 3-year timeframe. These product developments will go into the market. They're already being piloted in different ways.
Some technologies have, I'd say, somewhat of a cost proposition, those are things that will get sorted out over a period of time with volume. In general, they're not dropped off the list. It's just a question that from a priority perspective, they just don't make it to our highlights of talking on these calls.
Okay. Thank you. Next 2, 3 years, no major CapEx will be there because, I mean, your capacity is sufficient for these...
No. The thing is that, like we've always said, and I said, just alluded to in my opening remarks, that I think our internationalization is not as quickly as it should be. We are getting international orders, but the internationalization of the company is a little slower than what we'd expected. To that extent, that we could be closer to customers, we are going to continue to push for that. Would that require CapEx? Possibly. How much of what, we'll of course come back to you after taking it to the board. As you could see from our investment in South Africa, these are not significant investments and pay back quite quickly.
Okay. You have got a very good market and a very good sector. Congratulations and all the best.
Thank you very much.
Thank you. We have our next question from the line of Amit Anwani from Prabhudas Lilladher. Please go ahead.
Just small question on exports. Obviously, you highlighted about a lot about it. What can we target as a share contribution from exports? Second thing, you mentioned about penetrating into new geographies. If you could just, you know, throw some more color on which geographies and what kind of industries we are looking into these geographies, megawatt or something on that?
Sure. Let me take your second question first, the way I understood it. The geographies that I think are very attractive to us are the geographies that are growing, which is essentially North America and Southeast Asia. We see for our segment of growth, we see something like the Inflation Reduction Act being a real propellant for growth in the renewable energy space, something that we would like to have a good share in terms of the products that are sold and the demand. Similarly, with Southeast Asia, the demand would be driven not only in terms of renewable energy, but also for industrial CapEx, and we think that we'd like to be part of that. Your first question was?
Target export.
Target export. You know, if you look at it that, over 70% of our inquiry book is from the export market, that gives you an indication as to where our growth will be going forward. Of course, from a margin perspective, it's much better. We think that it's important for us to have a high market share in India, and we'd always take that so as to ensure that we have good control over our supply chain and cost structure. Also keeps us very grounded in terms of pricing and allows our engineering to continuously value engineer to take costs out. From the export market as a percentage, I think we had 45% odd in our order booking.
In turnover, I would think that that was pushed significantly by the overall order that we had from Southern Africa. Going forward, we would anticipate in excess of 50% in the short and the medium term, and in the longer term, significantly higher than 50% coming from the international markets.
Sure, sir. Thanks. Sir, if you could just also mention how much number of turbines we did in FY 2023 versus FY 2022, if that is possible for you to share?
Arun, do you have that data?
Yeah. We have produced about 190 turbines. Some of them were recognized as a revenue, others were in transit.
This is how much?
A lot of inventory which is in transit.
Yes, that's it.
Sure. This is how much, versus FY 22, percentage-wise?
It would be roughly about 70%-80% more. In FY 22, we made 116 turbines.
Great. Thank you, sir. Thanks a lot.
Thank you. Ladies and gentlemen, to ask a question, please press star and one on your phone now. As there are no further questions, I now hand the conference over to management for closing comments. Over to you, sir.
Thank you very much. Thank you, ladies and gentlemen, for participating in our conference call. We've had a record year, in every manner. The team has worked very hard, and we anticipate another record year in FY 2024. We look forward to engaging again with you at the Q1 results. Goodbye.
Thank you. On behalf of Triveni Turbine Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.