Q3 20/21

Feb 2, 2021

Quarterly report

Ladies and gentlemen, good day and welcome to Drebeni Turbine Limited Q3 9 Months FY 'twenty one Earnings Conference Call. 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. Please note that this conference is being recorded. I now hand the conference over to Mr. Shebharar from CEDR India. Thank you. And over to you, sir. Thank you. Good day, everyone, and a warm welcome to all of you participating in the Q3 9 months FY 'twenty one conference call for Trivenita Bairn Limited. We have with us today on the call Mr. Nikhil Soni, Vice Chairman and Managing Director, Mr. Arun Mote, Executive Director, 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 We will start this call With opening remarks from the management, following which we will have an interactive question and answer session. I now invite Mr. Nikhil Soni to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir. Thank you very much, Richard. A very good afternoon to all the participants. I hope that all of you and your loved ones are safe and well Welcome to the Q3 9 months earnings call for Srini Turbine. For the 9 months, the income from operations of the company has been at INR5.24 billion, With EBITDA of RMB1.38 billion with a margin of 26.3 percent and a PAT of RMB792 1,000,000 With a carry forward order book as of 31st December of INR6.52 billion. As we approach 9 months of COVID, this has obviously taken an impact on Sreeden Turbine's performance both from an order booking perspective as well as the turnover. As you can see, the company has weathered this quite well. But of course, given its reach and its perspective Of catering to the global market for steam turbines, we are, of course, impacted by lockdowns, travel restrictions, which Our partner companies and countries imposed over the course of the last several months. The global markets have shown very high volatility in these lockdowns, which has led to a shrinking of the global market in Q3 of this financial year 'twenty one by 64%, while the 9 months decline has been at about 41% decline in the 9 months period of this year versus the same period last year. However, the company has registered improved profitability margins due to cost reductions achieved during the financial year With an EBITDA margin for 9 months showing an improvement of almost 400 basis points and is expected to be maintained in the coming quarter as well. The company's overall order booking has Ladies and gentlemen, the line for Mr. Nikhil is reconnected. Thank you. And over to you, sir. Thank you. I apologize for that. As I was saying, our order booking has shown a decline of 25% during the current quarter In comparison with the same period of the previous year, with the domestic order bookings showing a marginal growth of 3%, while the export Order booking declined by over 50% when compared to Q3 of FY 2020. The product order booking position Also reflected the overall market trend with a year on year decline up 33% in the Q3 product order booking, While the overall order booking for the 9 months has been lower by 26%. Even though there has been lower order finalization, Both in the domestic and international markets, Caveni could maintain its market share and leadership in both the Indian market as well as internationally. On the other hand, the inquiry generation, both in the domestic and in international markets, has remained extremely robust, which is a positive sign As far as the outlook of order booking in the future is concerned, I've been through some of the highlights of our operating performance, I will summarize them again. There has been a decline in our income from operations by 21% over the same period of on the 9 month period, This is compared to the same period of previous year. At the same time, there's been a decline of 8% in the EBITDA, while profit before tax has been lower by 7%. We have also had an exceptional item of INR185 1,000,000 on account of manpower rationalization, which has led to a decline of 27% in profit after tax, which was majorly impacted by the onetime exceptional charge. On the domestic order bookings situation, the overall order intake has been higher than last quarter It's an increase of 9% in comparison with Q2 FY 'twenty one, but at the same time, this is lower by 23% in comparison to the same period of the previous year. The sectors which have been contributing to the order booking have been the process cogeneration sector, which includes distilleries, Paints, Pharmaceuticals, Food and Beverage as well as some demand from the waste heat recovery and steam sectors as well. The inquiry generation in the domestic market has shown an increase of over 34% in the 9 month period of this year, While in the international market, it is lower by 10% in comparison to the same period of the previous year. The overall inquiry generation for the company for the 9 month period has been at 3.6 gigawatts, which is a marginal growth of 3%. In the export side, and I will go into this during the question and answers, we believe that While order booking has been lower due to deferment of finalization as well as certain restrictions placed on travel, which has pushed order finalizations from quarter to quarter. There is a significant amount of pent up demand, especially in the sectors in which we cater to, as well as our burgeoning sectors of API. We believe that all of these will show a fusion in the coming quarters, and we are very optimistic for the export market. In the aftermarket, as you can see, there has been an increase Order booking by 37% at $364,000,000 in comparison with the corresponding period of the last year on account of increased volumes of On account of the substantial order booking in Q3 FY 'twenty one, the 9 month order booking for the current year has also shown a growth of 7% at INR1.2 billion over the corresponding period, which we believe is a significant achievement. This is in spite of the same restrictions on travel for the aftermarket Ladies and gentlemen, we have the line for Mr. Nikhil reconnected. Thank you and over to you sir. Thank you. I apologize again. This is not a network issue from my side, But I think some congestion. As I was speaking about the aftermarket and the current growth that we've had in the current quarter, I wish to give some confidence to all of you that we believe that this segment is a growth segment for Chibanye turbines and we believe that the international market From both the spares, services as well as the refurbishment sector will open up gradually over the coming quarters, and we are very optimistic As I was saying, On account of travel restrictions internationally, the aftermarket segment in the export market was lower by 22% in comparison to the corresponding period of the last year despite the overall growth in the aftermarket order booking for the company. However, the overall order booking in the aftermarket segment for the 9 month period is almost at the same level at INR1.6 billion. The aftermarket business The total sales improved by 5% at 28% during the 9 months FY 'twenty one. As you can see with the current quarter, Despite the fact that we had lower sales, given that we had a better sales mix, we were able to preserve margins. In the longer term, we believe that our margin That would be at the 9 month level as opposed to at the 3rd quarter level. This is given our belief that we should be able to increase our turnover In the coming quarters, of course, as we are currently in Q4, the restrictions on travel, which existed in Q3 have also permeated into Q4 and therefore turnover would be similarly impacted in Q4 As it was in Q3. And but we believe that with travel starting already from to East Asia and to other parts of Asia As well as to certain other parts of the world from the middle of this month, we believe that a lot of our order booking Orders will get overcome in the short term. The company continues to focus on design and development and Technology, upgradation, both in terms of rotating equipment expertise, but also specifically driven around steam turbine, flow path and computational fluid dynamics in terms of new profiles of blades. The company has done significant achievements in terms of being able to update its efficiencies Through the course of the entire turbine through multiple modules of development, we will continue to focus on research and development and be a company that puts technology at the center of its product differentiation. As far as the outlook goes, While overall performance during the 9 months is lower as compared to the 9 months of last year, the company believes that the overall business growth for the year is expected to be lower. Even though the overall inquiry generation in the export international market was marginally lower In the last year, due to lower inquiry generation from certain markets such as Southeast Asia, Central and South American markets, While the generation from some markets such as Turkey, Europe, Africa and the Middle East has shown significant improvements, We feel that the efforts put into the company in adopting various digital platforms very early in the lockdown enables the company to maintain a steady State, inquiry flow. We believe a strong inquiry book will all go well for the order booking of the company in the coming quarters, and we are extremely bullish And the order booking specifically from sectors such as API in the coming next financial year FY22. We believe a strong order book will all go well for the order booking in the coming quarters. The company continues to maintain its leadership position the domestic market and has an over 2 thirds market share of all orders placed, but also as per an international policy, we continue to maintain our Leadership position as the 2nd largest steel turbine manufacturer in the international market below 30 megawatts as well as the largest manufacturer for renewable Energy Applications Globally. With the opening up of economic activities, we are extremely bullish on the coming year, While Q4 may get impacted by similar restrictions of travel from a turnover perspective, We believe that the coming year will show an extra high amount of growth both on the top line as well as bottom line. While this year, we may show a decline in turnover by about 12% to 15% or 10% to 15%, Our EBITDA will be largely flat on a year on year perspective. The performance of GE Trivedi, our joint venture with General Electric It's still it's continuing to execute orders. The company has a petition, which is filed with NCLP and the details are available with the stock exchanges. With that, I'd like to open the floor up to question and answers. Thank you very much. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ravi Swaminathan from Spark Capital. Please go ahead. Sir, thanks for taking my question. My question is with respect to the order inflow potential From the CLI scheme, as the second derivative, we'll get orders from that. So if you can give a broad outlook as to which are the sectors which are showing prospects In terms of giving out orders, I mean, it's still early days, but if you can give a broad outlook, what you think might be the sectors that can RAVI, you bring up a very important question here because and I'd like to split this into 2. While you focus on PLI, which is Domestic demand, as you would see as you would notice for a company, our domestic orders carry a lower margin Then our international orders. But having said that, the push that we've seen in the domestic market for orders in this current 9 months Has been about 27% lower than what it was for the previous 9 months of the previous year of FY 'twenty. Having said that, I'm going to ask President, Mr. Senthil Shah to give you a little bit of an overview of what he sees as the product order book's outlook from the domestic market as well as international. Thank you, sir. See, products are book wise from domestic market, we are quite bullish. So basically, infrastructure Your expenditure, whatever in the budget, the current budget also laid down a road map for that. So we are seeing a cement industry going to be driving this market. Of course, in Cement, again, CapEx expenditure as well as efficiency improvements, so that is the waste rig recovery options, These are the 2 segments what we are seeing are going great opportunities for us. Distillery is another segment where we have a substantial inquiry base. And today we are talking of close-up to around 600 plus distillery licenses issued across the country. This is another segment which Going to drive FY 2022 auto booking from domestic market. So coming to international markets, yes, we have Some pockets of markets where our acceptability is quite well and our market shares are over 80% in those markets. So we are seeing like biomass based and waste to energy markets and MSW based power plants Apart from JPA segments, these are the driving markets for us in international markets. Of course, JPA is a key focus segment. Today, we have been registered by almost all EPC, OEMs in India and 70% OEs and EPCs and the consultants approved us globally. So that gives a good acquired book for us. And as we know, oil and gas segment order gestation periods are quite long compared to the thing. So there is some Time overlaps there, but we are quite confident. The way our offers are received and technically evaluated, we are quite confident There will be a substantial improvement to our accessibility and we'll be able to get those auto bookings done through APA segment as well. So overall, we are seeing next year going to be substantially high order booking year for us by seeing the inquiry pipeline and the way Techno commercial alignment happening last 4, 5 months' time. So we are quite bullish by the next year in terms of auto bookings. And this year, what is the size of the market, domestic market? And next year, what kind of growth do you expect in terms of the market size? Last year was from 700 odd megawatts. No, no. This year, I've seen a decline in the overall market by about 40%. And but still there's still in probably 9 months. We'll still have to wait for this quarter to finish, but it won't be as bad as for the 9 months. But having said that, our inquiry book suggests a significant month pent up demand. This is not only in India but internationally As is lot of liquidity and CapEx will flow through. So I think that from a year on year perspective as we may end With a similar order booking level, slightly higher order booking level as we entered at 9 months, We would expect next year to deliver significantly higher order booking than we currently have, significantly. Got it, sir. And my second question is with respect to commodity prices. So basically, are there some pressures? No, of course, there are pressures. There are pressures on copper prices, which have increased substantially, which directly impact some of our products. More so even with steel, steel has moderated from the peak. But the company follows a long term pricing policy. And so very frankly, when prices crash, we don't see the vendors. We work more from the perspective of volume. To the extent that prices price Commodity price increases would impact us. We would pass that on to our customers. But largely, we would say that we are we would work on a balanced manner. And short term price volatility on commodities will not impact us. Got it, sir. So far, but we wouldn't see margin pressure at gross level because of the commodity pricing, please? That's my understanding. No. Largely because orders are taken back to back. So when We take an order. We already have the prices of all the components of our equipment already registered to a large extent. As prices increase And how the margin of those increases may mean to our suppliers or to us ourselves, we'll pass this on to our customers. But largely, we're not seeing a significant increase because there is a significant amount of value addition that goes in. The pure amount of copper or steel that is part of our products is not substantial to warrant more than a 1% or 2% price increase to cater to even these drastic price increases that are taking place in the market. Okay. Got it, sir. Thanks. Thank you. The next question is from the line of Ahmad from Unifi Capital. Please go ahead. Yes. So thanks, Akshun. A few questions. Firstly, could you quantify the quantum of shipment deferral which happened in Quarter 3? We can take that offline. It was 3 or 4 orders that were deferred, Which hasn't, in fact, I think to the extent of maybe 30, 30 crores, which is direct, which will take place in Q4, but There may be some separation in Q4 or into Q1 also. Is it because of the logistics challenges that we're seeing across is that the same reason which led to the difference? It is, but it's also driven by the readiness of clients. Okay. Okay. Sure. Second thing is you highlighted your market share in the product market. Could you help us understand What kind of market share we have in the aftermarket in the refurbishment segment, which will help us to appreciate opportunities that are alive ahead of us? I don't think there is any data, which actually puts together the entire services market for steam turbines for all manufacturers. But I would say that our entry right now is extremely low and possibly maybe 1% or 2%, 3%, something like that. The potential is enormous, if I could give you Nigel, of course, it's very difficult to gain very large market share here, but we believe that this segment allows us To cater to gaps in the market where OEMs, which are no longer in business, cannot provide effective solutions to clients and we think that this Suits our balance sheet by being an asset light business for us to provide the technology intensive solution to customers to update their capabilities and efficiencies, Balan, it's the same time providing resilience and robustness in the solution. On our margin profile, given that in our current order book, the share of export It's actually coming down. And as you highlighted, the margin profile in export is much higher. Would there be a risk on our overall operating margin in the next year because the export order book is kind of declining a lot in the current period? No, you're right. But it is The decline in order book from the export market as it currently stands is made up by a higher percentage of aftermarket As a share of order book. But also from a perspective of execution, as you can see from Q3, where we had maybe 28% of our turnover coming from the aftermarket segment, Even if that comes down a little bit by a couple of percentage points once turnover of the product segment grows, the margin profile would Almost remained the same because of the aftermarket contributing more towards turnover. But you are right that Lower international order execution would lead to lower product margin for the product business. Josh, as we go to the company, I think it will be managed within the range. Quarter to quarter, it will move. But I think visibility for the year's period, we would be able to maintain a higher margin level as to what I have a little piece of that, Stuart. And finally Mr. Ahmed, so sorry to interrupt. May we request you to rejoin the queue, please, for any follow ups. Thank you. The next question is from the line of Manish Goel from Inam Asset Management. Please go ahead. Sorry, Manish Gul from Inam Holdings. Hi, Nikhil. Just a couple of questions. On distilleries, I believe we have been hearing an increasing opportunity. So as mentioned that there are 6 Standard licenses issued. So if you can a bit dwell upon like in terms of value wise, what is the opportunity available? And also on other side, lot of these distilleries which are coming up with the support of the government with try part of the agreement. So and lot of these are coming at cooperative level. So how comfortable are we working for them? So like if you can just dissect our addressable opportunity and what will be the value terms, sir? Okay. Well, the synergies as with most of the process for generation sector operates in the, I'm going to say, in the 4 to 10 megawatt Range, 4 to 8 megawatt range. So they're small turbines, very small turbines, which is where Kuvenin has an extremely Appropriate solution and a very low cost solution as well for the sector because it's a very price sensitive market. Out of the 600 licenses, I won't fathom a guess as to how many will actually come up. But the segment is lucrative not only from perspective of installed base, but because it gives reliable Aftermarket revenue. From a payment perspective, Triveni turbine is very conservative and we Ensure that we get full payment on dispatch or it was the LC. So the cooperative sector has been Clients for us not only for the distillery side but also for their sugarcordeneration and other segments. So we have dealt with them in the past and we have had no problems in terms Good, our payment structure. Sure. So has the ordering, like Have we started seeing order inflows on these distilleries? And I mean, we our group company, Savini Turbine, is also Savini Engineering is also in the sugar And let's setting up ample distribution. No, Nikhil, I'm just trying to understand that this has been talked For quite long and finally, I believe things are taking shape. What I am not clear as to has the ordering momentum picked up From the distillery then, can we expect these to sustain for next couple of years? I think that this won't be a big bang Push, but it will be a sustained amount of demand from this sector? Yes, because even government is now entering Additionally, some grain based and other sources. So from that perspective Those are the sources which also provide us demand. So it's not only the molasses sector. Sure. And one more question on the your guidance, which you have kind of maintained what you have given in Q2. I was just trying to understand that because last year Q4 was a lower revenue and profit quarter. And on a low base also, then if I'm just trying to do some math, on that low base also, kind of we are not seeing good growth Based on your guidance of 10% to 15%. So I'm just is it that we are taking a conservative Stands at the moment? No, Q4 to Q4, we will do much better. You're right about that. Overall, let let Q4 happen. I think that what we were cautioning on is the fact that there are Pressures for finalization of orders in the international market, which has impacted our order booking for the 9 months and possibly for the year. And also equally from a dispatch perspective. So that is turnover because we account for turnover only on dispatch. Sure. And so these are things that we'll have to wait and see. But I think at this point in time, there is Gita, a question for me to caution you, but this is just the reality of where the situation lies for the year. But a lot of this will get eased in the coming quarters. Sure. Appreciate that. Just last, again, like you mentioned that inquiry book is quite strong with lot of pent up demand. So is it that there is a possibility that we can see bunching up of order inflows Probably in this quarter or early of the next quarter. Yes. We're looking in Q1, Q2 to be extremely good, both from an order booking as well as revenue and profitability perspective. So those will come about just driven by the dispatch schedule that we have, But also given the visibility that we have in terms of travel and the assurances that we have by some customers of finalization. Thank you, Nikhil. I'll come back in that one. Thank you. The next question is from the line of Harshad Patel from Equidus Securities. Please go ahead. Hi, sir. Thank you very much for the opportunity. Mr. Patel, if you can speak closer to the handset, please. We are unable to hear you. Hello. Is this audible? Yes, yes. I can hear you. Sure. My first question would be that, I understand that we don't have much CapEx requirement as of now. I mean, we have a couple of state of the art manufacturing facilities, and we have ample underutilized capacity. So sir, now we have all more than INR 300 crores of cash on our balance sheet, and we don't have much CapEx requirement. So what we are planning to do with that? So that is this that we could also venture into some adjacent categories like generators or maybe control fenders, etcetera. So is there any thought process that you would set? That's a very good question. Currently, I have to say that the Board has not considered any proposal either To redistribute this money to shareholders or to put it into any inorganic opportunity or as well as organic expansion. We would of course try to use as much money as we can organically by pushing more money into R and D into new product lines to shore up capabilities. But in the speed and to look for growth, there may be opportunities that we may look at. But what is paramount is that we will keep our balance sheet in consideration. I think we are very happy that we have asset light balance sheet. So we would look at businesses or adjacency businesses where The characteristics of the balance sheet are similar to what we look at in for stream turbines. So I don't know if control panels are generated, right? You can conform to that. Sure, sir. All right, sir. My last question was a bookkeeping one. So I understand we have a INR 1,400,000,000 of order book in the aftermarket segment. So how much of that will be from exports? I think the beta is with you. I would but you bring up a very good point. We'll add Leisa President, Sachin Parib, aftermarket to give you an idea of what he views as the Order booking, both from a domestic and international perspective for the aftermarket segment. Sachin? Yes. Good afternoon, everyone. This is Sachin Gaurav from Bangalore. See, our share of domestic market for the full year It's likely to go up to about 76% of overall customer care order booking. And this would be higher than A 67% share last year. So basically because of the inability to travel overseas extensively, The restrictions are in place in many countries. So we are able to travel only to limited countries. And so the business that we have been able to get It's more from the domestic market and therefore the share of domestic has gone up in this financial year. However, as we move forward, we are Expecting ease of travel restrictions and international travel will be much easier from quarter 2 onwards that is our outlook as of now. And we expect that in the next year, our share of orders from the domestic market will come down To previous year's levels, in the mid-sixty percent. And this is despite the growth in the overall All the bookings that we anticipate? Yes. We are looking at a buoyant growth. Next year, we are projecting Large double digit growth in order booking for aftermarket business. Also a lot of it to be driven by our refurbishment business, which has Picked up very well in FY 'twenty one. Thank you. Sure, sir. Thank you very much for the readouts. Thank you, sir. Thank you. Thank you. The next question is from the line of Rishit Shah from Nanki Securities. Please go ahead. Hello, sir. Good afternoon. Thanks for the opportunity. So two questions. First regarding Basically the GE part, so in GE tier, so are we I mean, what are the kind of order and flow of the inquiries that you're seeing right now? The inquiries are there. The order booking is, I think, pending. So the joint venture It's continuing with its normal operations as it currently stands. From a visibility perspective, right now, They are inquiries and order of chase ups, but there is no finalization that is happening in the Q2. Okay, okay. Understood. And secondly, as you just mentioned, basically the refurbishment is seeing good traction along with an expectation of double digit more large double digit growth in next year In the aftermarket segment, so do we for the next 2, 3 years, do we see any change in the share of Aftermarket or increase in share of aftermarket in the overall revenue as well as order booking? Well, I think if you look at the history of 3eight turbines, As our installed base has grown, so has our revenue from services and spares. The refurbishment segment was a new segment in aftermarket, which propelled growth further. But if I look back 4, 5, 6 years ago, we started off with a mix of about 80, 20, 80 from the product side, 20 from the aftermarket. And steadily, Despite the growth of the product dispatches, we've been able to increase the share of aftermarket as a percentage of overall sales Do I think with last quarter 28% that may be a normally, but I would say 26% to 27% is something that we can target in the short term. And then incrementally growing 5% or 2 as a share over the medium term. We do believe that there is growth in this segment for us. Right. And Swamy, the snowman would also drive, I mean, margins going forward? Yes, yes, Yes, you're right about that. But the margins are very healthy in the aftermarket segment in all 3. But having said that, we, As a product manufacturer, I also and this is through our own research. We believe that we are one of the only turbine manufacturers are profitable on the product because most companies actually end up selling their product at near loss so that they can capture the aftermarket. Correct. And sir, secondly, about basically the new developments, any technological new development or relation that We are working on right now or maybe in the coming year. We've already spoken about in the previous call, so I didn't Want to reiterate the same points, but technology and our focus on technology is very much at the core of our value proposition. So this stems not only from value engineering, which is to take cost out of the product, which is a continuous process, But also breakthrough technological development for new products as well as for new components in the system, which are all IP protected. So IP basket and patent basket is also increasing continuously year on year. Right. Got it. Okay. Thank you. Thank you. Thank you. Before we take the next question, a reminder to the participants, please limit your questions to 3 per participant. Should we have any follow-up, we would request you to rejoin the queue, please. The next question is from the line of Anup Maher from Edelweiss. Please go ahead. Hi, this is Anuj from Indivior. Hi, Nikit. I have two questions. First is The global COVID-nineteen market is by far one of the largest segment. So what specifically are we trying to Thank you. That market will be dominated by the leading players. I know we've been in last couple of years deploying a lot of resources in that segment, but Anything that you would like to share? That's number 1. And the second question is for the parallel IT Desk. Basically, how much of our Okay. The first question is about API. And to give you an idea of the overall market In our estimation for drive turbines in the API segment, which could be for either API 611 or 612 applications, Someone there reached between 1,000 to 1500 turbines a year. Now these could be for applications from blowers to fans to Driving compressors, a variety of different applications. In fact, over the course of this past quarter, we've had good success in the API market internationally. And so we are already seeing some traction coming through. And a lot of these orders are lumpy because they are out of 3, 4, 5 at the same time. And so we are anticipating good momentum from the API sector going forward, driven by a greater cost consciousness in the oil and gas sector. I think no one is expecting oil and gas prices to be on the upward trend. And I think the refiners and other processors are also anticipating To be much more cost conscious on their CapEx spend. And so therefore, it is easier for us to register because safety It's one of the most paramount considerations here, while at the same time registration with these oil companies is an arduous task. So I think we're quite optimistic here the market is large. We've seen some good traction already during this current year. And we think in the short term, we'll be able to show better traction itself. This is of course on megawatt market, so we can't define it in terms of megawatts. On the noncerevening market Refurbishment is what we call it. Refurbishment constitutes, I'm going to say, about 15% of our aftermarket business. Sachin, is that right? Sir, slightly better. And the trend is often in growth in that area. To give exact numbers in In terms of order booking of refurbishment business, as a share of the total aftermarket business, for FY 'twenty, we were at about 27%. We are projecting that for the current financial year FY 'twenty one, it will be about 31%. And going forward, we are projecting about 35% to 37% of our aftermarket business would come From refurbishment business, which is basically non trivially. So this is Okay. Thanks very much, Mr. Vijay. I'm touching through very well. One last question if I miss Mikheem, and a follow-up to the first question. Generally, qualifications, getting qualifications with large Yes. It's the purpose of the right thing pointed out and we've been saying that. But any steps that we think we are taking we should take Maybe I'll be taking on more resources, manpower in that direction because that is one area which is the largest segment and We've been excellent on biomass and NITs. Amit, so the thing is actually Srinivasan is extremely good at possible oil selling, which is getting in front of a customer and making a value proposition well to him. The oil and gas sector, the sales process is different. It is very bureaucratic. It is registration and tenders regardless of who we're talking about. And so it follows a route which is very bureaucratic. And so we have to go through the process which is a little bit longer. But once we get through it, it is better. I think there were questions earlier about PLI and Aspenirbhar. And very frankly, over the course of last year, we found it extremely easy. We found it Simpler to get registration with Indian companies, which was far more difficult than in the past. Okay. Thanks, Niketi. Thank you. The next question is from the line of Kartik from Unifi Capital. Please go ahead. Hello. Hi, sir. Yes. So on the export market, On the export market, just wanted to check, because of travel restrictions, we are not able to get orders there. Is that market share been occupied by some of the regional deals in those markets? Or will it be easy for us to recapture the lost market over there? No, let me correct that misperception. There's been a decline in order finalizations from our perspective because we haven't been able to It's not as if we're not getting any orders on a remote basis. We're getting orders on a remote basis, but they're not as many as we think that we could have gotten as if we were able to Go and take me back to the customer. The overall result is that we've seen a decline in the global orders placed by over 50%. And so and this is also reflected in our order intake going down by that same amount. And so actually, our market share, both domestically and internationally, Has remained approximately the same as we saw. Thank you. Thank you for asking. Thank you. The next question is from the line of Abhisar Jain from Monash Jai. Please go ahead. Yes. Hi, sir. Thanks for the opportunity. Sir, just wanted to know from you that the capital allocation decision, which I think you had alluded to in the previous calls also that company would be coming up with a plan, which would have significant kind of clarity for the long term, next 3 to 5 years. So can we expect that decision from the Board by the end of this fiscal year? No. I don't think there is anything in front of the Board right now. Okay. I think that there is a lot of organic growth that we are focusing on. Inorganically, really, we don't have we need to make sure that it fits Our capabilities and something that we can drive forward to success. Right, sir. I understand. And sir, in that sense that maybe you can correct me if I'm wrong, but organically, The CapEx requirement would not be too high, right? And whereas our cash flow generation as well as our outstanding cash balance is Going to be much more significant than what we'll require organically, right? No, you're very right. So we're generating, I don't know, between INR 150 crores to INR 160 crores of cash, Free cash, correct. And that will get added into cash reserves. And I think that we don't have This is post any routine CapEx or replacement maintenance CapEx Right, sir. Right, right. So sir, effectively, what I'm trying to understand is that, see, in the past, We have taken a route wherein we if we don't have a large CapEx for Either organic or inorganic. In this case, organic may not take much. Then we have chosen a way out to be able to pay back to the So, be it a buyback or a dividend, right? So, those options will obviously remain forefront is what I want to Get from as a direction. I know the Board will take a call, but just as a direction. No, I think the options you've laid out are the options that will be put forward to the Board. All I can say is right now there is nothing under consideration because the alternate has really haven't been flushed out. I think that we probably have our quarterly Board meeting in May for the full year results. And there may be some clarity then, but I would think that during the middle half of the year, we have a great clarity as to where we think Our capital allocation policy will lend towards either deployment in business or return to shareholders. Okay, sir. Understood. And sir, just one clarification on the export side of the revenues. I guess, We have been getting the MEIS duty benefit. So could you ask some clarity that will there be Some impact of that or the contracts are such that that was given when it was available and now will not be available, so we'll be able to bill it to the customer? No. There is a decline in NEIS and so that does impact our margins. But it has been made up because of a better product mix as well as certain cost reductions that we've had. So you're not seeing it in the results, But NEIS has come down substantially and that has impacted margins. But having said that, we have been filing but have not been accounting for any of The new incentive that we are putting through, which is the road test, which whereby they haven't actually the Ministry of Commerce has not laid out The slabs by which we can actually apply for benefit. There are certain other export benefits such as packing credit, Which the company reels off. But all of this is, I think, a little bit less than the NEIS scheme. Sure, understood. And so just one last question on the staff costs. So with whatever rationalization we have done, we now are at the optimal run rate and We can assume that to be the run rate going forward or they can be any plusminus? No, no, no. Actually, the company, we will be The BRS team that we did was for workers in our shop floor, so as to move I have to offer a category and have a caliber of graduates in our shop floor, non unionized. But we will be need to enhance our capacity on the technological side as well as sales and marketing for new products, market segments as well as geographic needs. So we will see wage costs go up, but As a percentage of sales, I would not see a change. Understood, sir. Thank you so much and best of luck. Thank you. Thank you. The next question is from the line of Hiral Shah from Philip Capital. Please go ahead. Good afternoon, sir, and thanks for the opportunity. Sir, out of the order book which we have currently, can you segregate it on the sector wise basis? Oh, no. I don't think we do that. But to the extent that the information is there from the international and domestic You have that available. On a broad to give you a broad idea, we have our international market is dominated Renewal Energy Markets, which is from the waste to energy and allied sector, the biomass based IPPs, Such as palm oil or sugar or variety of different biomass. In the domestic market segment, we have good Order booking from the Distillery segment process for generation, which includes paints, Pharmaceuticals and other process for generation requirements, as well as we seek recovery from the cement sector, which is Efficiency based expenditure, not so much for the infield operations. We've seen some orders from the steel sector as well. And so that's the visibility I can give you. Okay. And sir, on the domestic market, apart from Western Steel, Gugar and which are the other sectors which gives you confidence that you will get incremental orders? As Mr. Tushar had said earlier, we believe that the market is going to expand generally. So, every sector will give more orders firstly and then there will be a greater focus from what we believe in greenfield Cement and steel. The synergies will be very important sector also. Okay. And sir, lastly on the aftermarket side, how frequently our products are consumed? Actually, We're very honest with our clients. And so very frankly, based on their usage, so every customer uses that bank separately. And so it depends on the rigor and maintenance by which they put into maintaining their turbines. But in general, you could say that Each turbine over the life of its turbine would give you about twice its revenue in the aftermarket. What is the average life of the turbine, sir? Thank you. The next question is from the line of Pooja from ICRA. Please go ahead. Hi, sir. My question is more with regards to, firstly, in any Future additional revenue avenues that you're looking at in terms of diversification? And also in terms of demand, Are we looking more towards domestic given the current scenario and given the traction that we see in cement, sugar and steel? Is there a focus more towards domestic for the next year as well? No. Our push is to capture market Thank you, Vivek. As you would understand and as I answered the previous question, The revenue that comes from the aftermarket is based on your installed base. And so we would like to take installed base wherever we find it. The fact that India actually saw greater growth in its relative perspective of order booking in the 1st 9 months is based partly in fact that we are here and also the form of which the orders were placed was more conducive to us. So Very frankly, our focus is to focus on the domestic market as well as the international market for every order. On the newer areas of growth, We believe that our current expansion into API segments from the products will provide a short term growth. On the longer term basis, yes, Product technological developments that we will be bringing to market in the near future in the next couple of years, which should give us some momentum. And the aftermarket side will continue to give growth not only For our old installed base through spares and service, but in our refurbishment segment, which is catered not only to The steam turbine market but to other rotating equipment and we believe the market for other rotating equipment for the refurbishment side presents another great opportunity, Which we will give more visibility on as we as we cash out our details here. Okay. And sir, one more question as a follow-up. In terms of The geographic sector spread within India, would there be any certain areas like if you could say in terms of North, South, East, West? Very, very, very good question actually. We've seen expansion in inquiry book by about 36%, but all of that has been Driven only by one geographical area, which is West India, which is Gujarat and Maharashtra for us. Okay. The rest has seen a decline, marginal decline in this inquiry. Okay. Okay. Thank you, sir. Thank you. The next question is from the line of Bhavin Vitlani from SBI Mutual Fund. Please go ahead. Thanks for the opportunity. So a couple of questions. One is, given the current situation, do you feel that the need for more feet on the ground? And are you actually investing on the sales and BD front to have more presence internationally? Yes. Firstly, so actually we follow a hybrid model where we have agents as well as our own feet on the ground to supplement them. We found this to be a very successful model and actually it has allowed us to generate orders through this pandemic where lockdown was Instituted. So we think that the model that we had is appropriate for us because otherwise overhead of spending in one specific geography would be too much for a company of our size. So this is a more appropriate mechanism, but also it's incentivizing people in the right manner. But this does not take away from the point that you bring up, which is do we need more feet on the ground? And yes, we would always need more people To be able to help spread our visibility. Ultimately, what we suffer from the international market is Visibility to orders. And we need to increase that. I don't know if The question is only peat on the ground, but it will be through a variety of different strategies that we have to increase our visibility. Sure. Thanks. So, as you would understand, Bhavin, we don't lose many orders in the international market. It's just we don't get the visibility to quote to them. I understand. Bhoomis, the question was as you're targeting a higher share of the Bishman market intact. Calls for seeing the customer, visiting the facility, like saving them on benefits. No, no. On the aftermarket side, there is a drastic need for enhancement of resources. Sure. The second question is, we saw LNG putting considerably large orders from Barmir refinery. And a couple of years back, we also got qualified with Engineers India. So the orders, are they placed? And if yes, Have you lost it? Prasad, if you are direct, could you comment on it? Yes. Still orders not yet placed, but we are also in the place for technical negotiations going on. So probably it may take another month to 2 months' time when it comes to commercial. Sure. And how large could be these opportunity No, we are quite large. We are on 5 SAGs. So all competitors are coming closer to 20 machines plus. But again, as you know that based on a driver application and all these things, so the technical alignment meetings are getting prolonged. Sure. Yes. These are my questions. Thank you so much. Thank you. The next question is from the line of Bimal Sampath, an indigital investor. Please go ahead. Yes, good afternoon. My question was similar to what he had asked now since you are saying Oil and Gas is difficult to crack. Are we aligning with somebody else to Get whether individually we are doing it or we are partnering with say Alente or somebody like that? And second question is on this supercritical Turbine, can you please explain a bit more in detail? Okay. On the first segment, we would cater to we don't partner in any manner. So we can start as we have a particular look to market with any other integrator. It will depend the form in which it And for example, if it's a blow manufacturer who has won the tender for the application, then we would quote to them We may have even had a pretend to tie up, but it's essentially we are not expanding our scope into the API markets to include other ancillaries. Our scope of supply is only to drive turbine. So it could all depend on the form by which the order comes out or the RFQ comes out. On the supercritical carbon dioxide market, it's we believe that the value proposition here Of having higher efficiency and lower cost is weighed out. And ultimately, I would suggest that you Look at some YouTube videos because the technicality is there for you to know. The progress on R and D here has been Steady. We're still on track the way that we want to do it. And so we think that the value proposition here is essentially to reduce the cost Offer installed system, but at the same time, with higher efficiency, so much better life cycle value proposition. Also, you have applications here where you could go For a concentrated solar thermal application, which will come down to cost levels, which will be similar to that of photovoltaic. So there are other non industrial applications which also make it quite lucrative. So I mean when I mean 2 years, 3 years down the line, will we see visibility from this sector or it will take longer? I think the first time frame we put is what we would like to see it also, but we'll have to wait and see. Okay. Thank you. Thank you. Thank you. We take the next question, a follow-up from the line of Manish Goel from Enam Holdings. Please go ahead. Yes. Thank you so much. Just wanted to get a sense on the on our cost base. We did mention that in our presentation that Cost control and value entering efforts are being pulled. So one is that on employee cost, definitely we see a decent reduction. But on other expenses, it's probably if you look at the current quarter also, it has not declined much. It is almost same at INR 31 crores. So you said in one timing this quarter or should we look this as a normalized run rate going forward? No, I think there are certain elements of administrative costs, which are built in here for be it COVID, etcetera, Which will come out. There may be some legal expenses as well, which are non continuing on a more routine basis. I think That's what you should if you look at it from the P and L perspective, we will try and reduce administrative and manpower costs as is necessary. When we look at the balance sheet, you'll see that actually our reduction in inventory has been quite substantial and we've gone And spent a lot of time technically to align to a more modular form. And so therefore, we had much more inventory liquidation and therefore, more cash generated out of that. If you look at from our other currencies liabilities, we have, I don't know, about 170 crores, 180 crores Customer advances, which is pretty much all that that segment picks up. So we have a good cash flow mix coming from our customers Despite the fact that we have no debt and cash on the books. So cost control wise, I think it's continuous. I think our focus on Cost control is more for the product. How can we reduce material out? How can we align our subcontractors and vendors To reduce their costs as well because 50% of the value of our purchase order is bought out equipment. Sure. And so administrative costs, etcetera, are things that, yes, you're right, we have to focus on. But I think they're consequential of the circumstances that we're Okay. Fair point, Nikhil. Thank you so much. Thank you. The next question is a follow-up from the line of Kartik from Unifi Capital. Please go ahead. Yes, and thanks for the opportunity again. This question is in context of the guidance of high double digit kind of order book growth in the next financial year. If I look at our closing order books in the last, say, 3 financial years, it's been in the band of, say, CR700 CR. Now there has been a bit of decline in the current year. Should we expect kind of A good increase from the 700 base where we are, which has been a closing order book for the last few years. And even if you look at the 650 basis, it will still be our expectations are that it will be Very good double digit growth. You are not in the teams. Sorry, not in the? In the PMT. Okay, okay. Sure, sure. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to management for closing comments. Thank you very much ladies and gentlemen. Thank you for joining the Q3 9 month Earnings call for 3 Mini Turbines. I wish you all are safe and please be well. Thank you very much. Goodbye. Thank you. Ladies and gentlemen, on behalf of Triveni Turbine Limited, That concludes this conference. We thank you all for joining us and you may now disconnect your lines.