Ladies and gentlemen, good day and welcome to Triveni Turbine Limited Q3 and nine-month FY 2020 earnings conference call. As a reminder, all participant lines will be in the listen-only mode. There will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal for 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, sir.
Thank you. Good day, everyone, and a warm welcome to all of you participating in the Q3 and nine months FY 2020 earnings conference call for Triveni Turbine Limited. We have with us today on the call Mr. Dhruv Sawhney, Chairman and Managing Director, Mr. Nikhil Sawhney, 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 call is open to all invitees, it should 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 invite Mr. Dhruv 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. Welcome everybody to the third quarter FY 2020 earnings call. I'd like to begin by presenting you the nine-month consolidated key highlights. As we've been saying, operations of a business like ours are lumpy quarter to quarter. I shall concentrate on the cumulative nine-month results and then go into our feelings of the future, both for the end of the year and for next year. The net income from operations for nine months consolidated is at INR 6.64 billion, a growth of 11% year-on-year. Our record is PBT in the history of the company at INR 1.08 billion, a growth of 50%. Again, I'll say that this is extraordinary for certain quarters, and it's not something that happens every quarter. We're very happy that the nine-month results have come out with such a good bottom line.
We have a strong outstanding order book at INR 7 billion, INR 6.94 billion. The total order booking during the quarter in Q3 was good and pretty should be better than what it was in the first half of the year at INR 2.1 billion, a growth of 11% year-on-year. This enabled us to bridge the gap, which was there in the first half which I mentioned during the last conference call. The order booking for nine months is just marginally lower than last year at INR 6.36 billion versus INR 6.45 billion. We expect to end the year with the same, if not better order booking than what we achieved in FY 2019. During the nine-month period under review, the turnover was 11% higher than the last year's period. Here, the domestic side has grown very substantially by 24%, and the international was marginally lower.
In order booking, I would like to highlight that in Q3, our international order booking was very good. We started off the half year. In the half year, we had a deficit of 43% versus last year in H1. That comes down to 25% at the end of Q3. We expect good orders, and we already have some in Q4. We expect to end the year with the same sort of order booking as we achieved in FY 2019, if not slightly better. In the international market, there has been a lot of turmoil, as you know. For us, some of our key markets were affected, namely Pakistan, Turkey, and the Middle East. The future is looking extremely good because we have a big growth of inquiries from Southeast Asia and from Europe.
We have 42% of our inquiries are from Southeast Asia, 25% of them are from Europe. Here, we expect this a good inquiry conversion into orders. FY 2021 order booking also is looking up. The mix is what we are very encouraged on. That where we are seeing domestic growth also. At least the same amount as international growth. We have a rectification of the situation that might have happened temporarily in H1 of the current year. If we look at the nine-month period, net income which was at INR 6.64 crore, it has an EBITDA of INR 1.49 for the nine-month period against INR 1.22, a growth of 22%. Our PBT, again, has a growth of 28% and is standing at INR 1.38 billion. As I said earlier, the PAT was a very good 50% growth at over INR 1 billion.
Giving us an EPS, not annualized, of 3.34 a share. I'll be going into the domestic and the after-market in a few minutes, and export, but I'd like to just stress for a minute about our research development. The company has a strong focus on technology development and through this very dedicated team of design and development engineers. The push that we've had on efficiency of our products, and making them more cost competitive, has really borne fruit. We are very encouraged now with the proven results, that we are at the frontline of customer expectations on the value for the products, looking at both efficiency and cost. That is one of the reasons why we are encouraged by our inquiry conversion and the spread of our geographical inquiries and order booking.
The company's efforts in design and testing is being closely supported by our collaborations with various international design houses and universities, both in India and overseas. That's really the backbone of our support system. Our new test bed, which we put up, and this is definitely the most modern test bed for a turbine facility globally. It has come into operation, and it's already making contributions of bringing down costs and time in our development cycles. I think one of the points I'd like to mention in design and development is a new segment that we've got an order for, which is a geothermal segment. We've received an order for a geothermal turbine refurbishment, which is a very prestigious high-tech order. Here, the markets are in good growth, both in Australasia and in Africa, and good margins.
This is a good breakthrough that we've had in the last quarter. The research that we are carrying out with our institutes for the development of our supercritical CO2 cycle turbines is carrying on, and we've talked about it before, and we're very encouraged by the close cooperation that we are having both in India and overseas in this absolute frontline technology line. This will continue for the next few years. We are making good progress here, that's also a very encouraging fact. A market that we have been talking about for some time is the oil and gas market, and we've developed new turbines for this market. I'm happy to report that in January, which is actually Q4, we've now received further breakthroughs in drive turbines.
This has really taken a long time to get these breakthroughs, but the market, as you know, in the oil and gas for drives of small is very good. At the moment, we have just started. The upside is big for FY 2021, both in terms of margins and in terms of orders, even though the scale may be lower and the numbers are higher. These are the developments that I'd like to share with you on the design and development. I'd like to just quickly mention about our joint venture, GE Triveni. As communicated to you in June, Triveni has filed a petition with the National Company Law Tribunal, and this has now moved to the National Company Law Appellate Tribunal, and the matter is up to this. It's reserved for orders, but this is not affecting our current business.
The JV has received orders of INR 830 million. The performance of the JV in the quarter has been okay. It achieved a total revenue of INR 1,170 million and a PAT of INR 158 million. We are carrying on normally as we were before. I just want to mention that in the domestic market, we are seeing, which may be a little different to what this runs as, the situation is not bleak in the future. If anything, we have seen a slight upturn. We expect that to stay where it is in our segmented lines. They are coming from both the process co-generation distillery segment, the biomass IPPs, and the renewable space. Comments on our after-market. At the moment, our percentage of after-market to total sales is down at 23% versus 27% previously.
We expect in Q4 this to correct, and we expect it to come back to 25. In H1 next year, we hope to be higher than 27 again. This is the encouraging order booking in aftermarket, especially in the refurbishment international sphere. This is the encouraging fact which we've looked at now. We've got very hot inquiries and good traction in different geographical areas. The aftermarket business is where we are seeing a positive growth in FY 2021, both in terms of execution of orders on hand and in terms of order booking for the balance for 2021/2022 and 2022/2023. On the export front, as I mentioned, we are expecting much better traction in Q4 and in FY 2021, where we can see visibility in the first half.
It's the forefront that we've got in terms of our product, the acceptance of our new product in the market, both in terms of efficiency and cost, and the different geographical and product segments that we are catering to. I would say that with our orders on hand right now, which are good, and more substantially, the inquiry pipeline, both internationally and for the aftermarket, we look forward to a very good performance at the end of the year for FY 2020 and a good performance going forward into the first half of 2021, which we can see now. The cost control efforts that we started last year have borne fruit, and we are increasing these, and we will be accelerating various initiatives in the next six, nine months. The penetration new geographies are working and have strengthened the company's performance in the export market.
We now have orders and installations in over 70 countries, and are looking at future markets beyond these 70. The segments, as you know, are biomass, paper, process, and cogeneration, sugar cogeneration, distilleries, palm oil, and the new segments of waste to energy and the oil and gas. We believe that this strong inquiry and order on-hand pipeline and the aftermarket business which is looking up with the international market, all bodes well for Triveni Turbine into the next six to nine months where we see visibility immediately. Thank you. Open questions. I open it to questions, please. Thank you, sir.
Ladies and gentlemen, we will now begin with the question -and- answer session. Anyone who wishes to ask a question may press star and one on the desktop 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 questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star and one. First question is from the line of Ravi Swaminathan from Spark Capital. Please go ahead.
Hi, sir. Thanks for taking my question. First question is regarding the drive turbine. You had mentioned that you had won an order in the fourth quarter. Just wanted to get a sense how large is the opportunity there, and what is the size of possible quantum of orders that you had received in fourth quarter?
Ravi, the point is that as the Chairman said, the drive turbine market is a market where we have very low installed base ourselves. It's a market for us where we look at in terms of approaching it in a manner where we can expand our new product category and segment. The fact that we are facing success in it leaves the matter of it is a large turbine order. Let's not get into the values of it. We think that this proves our contention that we have a reasonable product for this line. This is specifically into the oil and gas segment itself, which is a more lucrative end of the drive turbine market. It's something that's very encouraging, and it's something that we've been talking about.
Yes, it will take time for us to establish a good market share, but we are on our way. We think that we are going to get more traction as we go along. Yeah. The oil and gas market is different to other markets because there they replace their turbines. These drive turbines are small parts for the oil and gas sector. They are replaced very often in terms of versus other power generation process industries. That's why even though the oil and gas market may go up and down, the drive market for oil and gas is a fairly stable one.
Got it. I mean, is it like they replace pumps with these drive turbines, or how is it?
The turbine drives the pumps.
Okay.
The drive turbine drives the pumps. It drives the compressor, drives the blower.
Okay. That gets replaced often, you're saying?
Yeah.
These orders are from the Middle East mostly?
Yes. You got it.
Okay. Got it. In terms of exports, you had mentioned that there is a healthier pipeline, inquiry pipeline.
Sure.
Basically, what could be the size of that pipeline? Usually we used to give numbers in terms of gigawatt. How is it now vis-à-vis how it was last year for export and domestic, if you can give some idea, it will be great.
As I said, we are expecting order booking to be the same as last year. The inquiry from Southeast Asia and Europe is very good. I'm getting the figures. About 2.5 GW.
Okay. Last year, how was it, sir? In similar timeframe, I am doubting.
About the same.
About the same.
I'm telling you why we are more encouraged is because the areas that they are from are not the ones that went back.
More diversification.
You see, we earlier had orders from Pakistan and from Turkey and all. Those markets just were not available to Turkey dried up and Pakistan went elsewhere.
Even though it was a very major market for us, and as you know, we had a major market share of sugar cogeneration in Pakistan. Triveni had.
Got it. Sir, my final question is with respect to the JV, we continue to keep receiving orders from this in spite of the case which is going on currently. Is it like these orders are the ones which we had bid for earlier during better times, and that is getting converted into orders now? Is it like, basically the joint venture continues to bid for order in spite of the misunderstanding between the two parties?
We continue to bid for orders.
Okay. Got it, sir. I'll come back in the queue now.
Thank you.
Thank you. Next question is from the line of Bhavin Vithlani from SBI Mutual Fund. Please go ahead.
Thanks for the opportunity and congratulations on good numbers.
Thank you.
Just a clarification on the international, I'm looking at your press release, which mentions 28% growth in the order booking, and you mentioned a healthy inquiry. You mentioned the order booking will be similar to the last year. Can you help us with that?
For the quarter, Q3 showed a growth versus last year, but for nine months, it's still a deficit over last year, if you look at the numbers. What the Chairman was pointing to is the fact that for the full year, the international market, we would be meeting up with the numbers at least from that front. While the domestic market, as you see itself, has grown quite considerably. We're looking positively at the opening order book starting FY 2021.
Sure. As you also mentioned about encouraging pipeline on the aftermarket.
Some more color on that will be helpful.
This is just because we're a month into Q4, so we have visibility on orders that we have placed. That's what he was saying in terms of being able to get a better order book and opening order book on the aftermarket segment as well, getting into next year.
I can say one very encouraging, it's a bit of a long haul, but a huge market is a refurbishment of other people's turbines, especially internationally, of other makes. We have received order, and some of the inquiries are very hot. Those are very good orders and good margin orders and a good scope where you're able to get growth in very different segments and very different industry segments and geographical segments.
Sir, you see the area of aftermarket stretches from two, three areas. One is, of course, the parts for our own turbines, the other is the service for our own turbines, and then it's for third party. For our own turbines, that organically is growing at about 7%-10% a year based both on a larger installed base as well as certain inflation on the pricing side. Service similarly. Organically, and these, of course, had good margins, so we're able to get a good contribution from there. The refurbishment area is dependent on multiple different product offerings that we have, which stem from anywhere from overhaul to higher value addition services such as reblading and augmentation of the power output from a turbine. Now, this all depends on where we sit in our proximity to customers and our relationship with customers.
It's very difficult to provide you great clarity on how we can do this, apart from saying that the conversations that we're having are at such an advanced level with customers that give us confidence, and some of those already translated into orders. It's a question of just moving ahead with this segment on a geographic basis where we can cater to customers' expectations better.
Here, where the real breakthroughs have been for us, we've got people with other make turbines who have agreed to air freight the rotor back to us, and we refurbish it, re-engineer it, and give it back to them with a better efficiency and freight it back to them. That's a very substantial transportation logistics, which we feel we are still very competitive in doing it. Plus, not having the turbine work for some time.
When we do this, we are looking at it as relationships with groups. One of the largest groups in India has placed an exclusive contract with us for aftermarket service of third-party turbines, with some confidence, of course. The fact is that we're starting approaching it from a basis where we can occupy our overhead better in terms of sales and support.
This large group business you're talking about internationally and not India?
No, this is in India, but the approach is the same internationally.
Internationally also, we have a good group from South Africa.
Sure. Given this, could we assume that a double-digit growth in next year seems higher probability?
No, we were not wanting to put any forecast out. It's too early. I can say that we are encouraged, and we expect growth.
We would expect that.
I would like to say growth rather than putting numbers.
Sure. Thank you so much for taking my questions.
Thank you.
Thank you very much. The next question is from the line of Anand Bhavnani from Unifi Capital. Please go ahead.
Thank you for the opportunity. I have three questions. The first question is, early in the year, you had indicated that we have offices set up overseas to do more business, and we have been spending on it. If you can update us as to how that is panning out, how many offices have been opened, and is there any business generated out of this initiative?
I think all three questions. Give me the other two.
Yeah. The second is in terms of business. This year you indicated we lost quite a bit of business, which earlier used to come from Pakistan and Turkey. If you can quantify it as to what our total, let's say, revenue contribution from Pakistan in FY 2019, similarly for Turkey.
No, we don't go into these commercials. These are fairly sensitive commercial matters, which to give out such details. We haven't done that in the past also.
Sure. The third question was.
The third question?
Capital allocation. Last year you did a buyback, and the time period, to consider buyback is again approaching. Are there any updates whether if the buyback is on the cards?
I can tell you we finished our board meeting, nothing has been discussed. We are sitting on about INR 150 crores. The liquidity of the company is good, and liquidity in the company is expected to be increasingly good. We are in a little different position to many other manufacturing companies in India, where we are having treasury operations. We have very conservative treasury operations and rather than anything else. The balance, I would have to say, needs to be considered by our board. I can take your first question, and I want to be a little bit open with everybody. We looked at our handling international sales through the offices and/or handling them from Bengaluru.
We found that the value add from the having the quality and the number of people we had to send from Bangalore to support it was still quite a lot. We were not getting as much value add as we thought we were going to get. We could do it just as easily and at a cheaper cost and as effectively, if not more, from Bangalore. While the travel costs may be slightly increasing from Bangalore, we were getting better coverage, and the results have been good. We wound down some of the operations down slightly in the international sale offices. That's all. We are not looking at opening any new ones.
Okay, sir, in case of our existing setup, we are not anticipating any additions in FY 2021. We have enough capacity, right? There will be no CapEx. Is that safe to assume that?
No. We've got plenty of space in capacity utilization with the new factory. CapEx is very small, similar to what is in the current year.
25
about 23, which is not much. That is also some balancing and some testing and some design software. We've acquired a bit of CapEx. I mean, the figure is similar to this year, which is just around INR 20 crore, INR 21 crore. Automation, IoT. We are going very heavily. We are in a project management, Primavera. We are more on the technology side, both in terms of design technology, automation, and speed of doing business.
Sure. If I may squeeze in one question. We had taken some cost control initiatives. Are there any benefit left, or we have already gotten?
No
the cost?
No. We have taken it, but we have looked at areas of further cost benefits. Some of our design efforts are continuing to go in this direction. We are spending money for cost reduction, and we will continue to do that. We feel we can still get more cost out in the next six to eight months.
Arun?
Absolutely.
We'll continue to have this savings in Q1, Q2, and then further on.
Yeah.
Thank you. I'll come back in the queue.
Thank you.
Thank you. The next question is in the line of Harshit Patel from Equirus Securities. Please go ahead.
Hi, this is Harshit from Equirus. Thank you very much for the opportunity. I had two questions. The first is, some time ago, there was an order from Central Pollution Control Board that even captive power plants will have to put FGD systems. If they do that, their cost goes up, and consequently, their internal return ratios come down. Sir, does this affect any way the demand for our kind of turbines?
No. One thing, maybe to explain something. No one is setting up a captive power plant to export to the grid. There may be a consequence if it's a biomass-based power plant, which has a different subject of air pollution control. But from a cost-economic perspective, when steam is used as part of the process, the cost of that steam net will always validate the company to set up a power generation at site. But what you're talking about is not really applicable to the type of power generation people we sell to. It's really not a consideration at all. People are having to go for air pollution, they're going for zero discharge and things, which is in boilers. It's not really. The turbine part is very small, if at all.
Sure, sir.
In turbine.
Thank you, another question would be a bookkeeping one. In our outstanding order book for after market, can you break that up between domestic and exports?
I don't know what level of detail we gave, but I think the detail is in our investor brief. You can take it from that.
Sir, that's actually not given in the presentation. Earlier you used to give this detail, that's why I asked.
Right. You should get back to us offline. We'll give it to you. I don't have it with me right now.
Sure, sir. No problem. Thank you very much, sir. That's all from my side.
Thank you.
Thank you. Next question is from the line of Manish Goyal from Enam Holdings. Please go ahead.
Yeah. Thank you so much. A couple of questions, sir. First, sir, do you see any risk on executing the current order book or potential order inflow from the outbreak of the virus in China?
No, we have no orders from China.
No, not China, but say probably it's like Southeast Asia and.
Like in Southeast Asia.
Not much.
Not really.
We continue to export.
Yeah. The people who are chasing up are not really I don't find anything either. I myself am thinking of traveling this month.
Sir, sorry to harp again, but just on your initial remarks in terms of order inflow, which was similar to FY 2019. Just back of the envelope calculation shows that the order inflow number would more or less remain between INR 210 crore and INR 20 crore, which will again be equivalent to inflow number which we had in the Q4 of last year. Ideally, what it implies is that the order book, which is already 8% down in the first nine months, and looking at Q4 execution, which is always the best quarter, my worry is that your order book may decline more than 10%, which in turn probably reduces the growth opportunity for FY 2021.
No, we very much know what you're talking about.
Yeah.
We have said that we expect to have an opening order book on 1st of April 2020, which will be.
Same or somewhat better.
same, if not slightly better than what it was on 1st April 2019.
Okay. Fine. Okay, that clarifies. Thank you so much.
Thank you.
Thank you. Before we take the next question, we would like to remind participants that you may enter star and one to ask a question. The next question is a follow-up from the line of Anand Bhavnani from Unifi Capital. Please go ahead.
Sir, just wanted to understand, for our domestic as well as international markets, is there a set of refurbished turbines of, let's say, Chinese make, being a more cost-effective option for customers and they're preferring?
No. Zero. No, we have refurbished Chinese turbines.
No.
They're not able to Let me tell you that in the power generation market in our range, Chinese don't seem to be keen, their manufacturers, at all. There's so many of them. They're quite happy to concentrate on the Chinese market and on where there are Chinese-funded projects. I wanted to also mention to you that, from an international data source of steam turbines, in the first nine months of FY 2019, for which the data has been given to us by this, when we are a subscriber to this source, in the 5 MW to 30 MW line globally, we are number two in terms of number of turbines and megawatt of turbines, units sold, internationally. That is, I think, a very commendable thing that we have achieved this. We did that in FY 2018 also. There are no Chinese anyway in the horizon in that.
That's why we know where they are.
Sir, just secondly, wanted to understand, if we are to keep aside the loss of business in Pakistan, Turkey, any other significant disappointments for us in the first nine months of this financial year?
No, I mentioned it to you. These are the two places and some parts of the Middle East, which we've also compensated now.
Disappointment in Africa also?
Africa, I personally haven't thought of that. There are other parts of Africa that have picked up, Nigeria for instance.
Yes.
Yeah. That's total Africa though. Let me give you more, is to say where we're finding encouraging inquiries and growth from, which is Southeast Asia, and I don't think that's going to be affected by the virus. Europe. There, we are seeing good traction in inquiries. When I talk about inquiries, I talk about things that look like active inquiries. We categorize our inquiries also into three categories, of completely budgetary, or active and very active.
Sir, in terms of inquiries, any quantification? Are the inquiries same as last year?
They're very difficult to define. We don't even want to speculate on that internally. It varies from country to country and segment to segment. The risk mitigation for Triveni Turbine is to approach all.
In case of sugar distilleries in India, are we seeing any pickup further from the existing levels?
There is some pickup.
Sorry?
There is some pickup.
Okay. Would you expect FY 2021 to be better from a sugar distillery sector kind of perspective?
It could be in terms of orders. It's not very substantial, but it'll be about the same as last or actually better. You see, the turbine component is not a very large megawatt.
Okay. Fine, sir. Thank you.
Thank you.
Thank you. The next question is from the line of Lala ram Singh from Vibrant Securities. Please go ahead.
Good evening, sir. My first question on domestic market. Do you see any signs of improvement from the core sectors like cement, steel?
Yes. Cement and waste heat recovery. There's good traction in waste heat recovery in cement and steel.
Okay. Greenfield is still a long way ahead.
Yeah. This is quite good. This is free of capacity, and this is something that are more Greenfield, they take a long time to plan, and by the time the financing and all, we don't even put that into If the inquiry comes, it doesn't mean we know it's an active inquiry. These are things that customers act on very quickly because for them, the ROI is quite fast.
Within waste heat, cement is doing well. Even in steel, do you see positive traction?
Less. You see, waste heat recovery, which we're saying is the recovery for the ROI for the person is quite good. While cement maybe they're not thinking of big brownfield expansion or greenfield expansion, this is a small brown. This is a sort of a balancing.
Balancing
balancing pollution control, cost. Because it comes into these fields, for the large cement companies, this is small CapEx.
Got it. Is my understanding correct that steel has a lower penetration of waste heat compared to cement?
No, the other way around.
No, they don't.
Other way around. Cement has a very low penetration.
Yeah.
We are having more potential coming in cement.
Okay. Got it. Thank you. Second question is on the gross margins. This quarter, we have done around 48%, and we have seen good improvement over the last four quarters. Do you foresee the gross margins to stabilize at these levels.
Yeah. That's the correct statement.
Okay. We have also made very conscious effort to control the OpEx, and I see that it has been pretty constant over the last four quarters. Are we doing any, or employee base, has it gone down or is it constant? I don't see the employee expense going anywhere over the last four to five quarters.
We look at costs at every level, moving people around and reskilling, et cetera. From a total overhead perspective, we have put a lot of control and focus on administrative expenses. That includes travel. You see, like the chairman was saying, international marketing is being handled largely by Bengaluru. Those will then reflect on the administrative costs, and you also then have other overhead. We're tightly controlling matters. People, we have always a need to expand higher value-added segments such as design, engineering, R&D, and we keep expanding our personnel there. We rebalance our requirements based on the situation as it exists today. As you notice, the OpEx is still fairly constant.
Yeah, that is very commendable.
Yeah. We want to keep this DNA, if not make it little better.
Sure. Next question is on the oil and gas business. You said that is a very lucrative business, and that was because of its repeatability or lower product life cycle, that is, we get more repeat orders or is it because of profitability?
Both.
Okay. Why is profitability higher there? Is it lower competition?
Yes, exactly, and higher specifications.
Okay. What would be the motivation of the clients or customers to switch to Triveni? Lower cost?
Well, and the design infrastructure, and we are a big global player in steam turbines, and so why would we not have the same expertise? Lastly, I think we have an edge over others in service.
Given that we have been in this business for many years, why has it taken so long? Is it because of high switching costs there, which took us so much time or?
There is a huge R&D cost to get in and a huge qualification. To get registered with these oil companies is a long process. Kuwait National Petroleum Company and so on are not easy to get registered with.
Okay. Going forward, if I take a five-year view, is it fair to say that this part of the business can be 15%-20% of the overall business?
Well, we're going to have some brainstorming. It's a useful point you mentioned. Certainly, could we even Actually, once we have a few more breakthroughs, I would say that's not a conservative figure. That's a easy figure.
Great. Can I pull in one more question, please?
Fine.
Within Southeast Asia, what is driving the demand, which you are saying the inquiry has been very positive?
Which sees the sectors of process industry, biomass, waste to energy.
Solid municipal waste incineration, waste to energy.
Waste to energy and the process industries are also still just like the cement plants and what's happening domestically are happening there. Small power additions they're doing, and the returns are coming.
Okay. Europe, it is mostly renewable, is it? Biomass?
Yes. Municipal waste to energy.
Okay. Thank you, sir, for all the inputs.
Thank you.
Thank you very much. The next question is from the line of Kirthi Jain from Sundaram Mutual Fund. Please go ahead.
Hello, sir. Sir, congratulations on good margin performance, first of all, sir.
Thank you.
Yeah. Sir, secondly, on these sugar distilleries, are the ordering starting, sir, to come to us?
I'm sorry, Kirthi. I didn't hear that. Sorry.
The sugar distillery which had to be set up in the Maharashtra region, have they started to come up, sir?
No, the distillery, Maharashtra, are we getting any distillery orders?
Yes.
Our Executive Director will answer, Mr. Mote.
We are getting orders, and they're from all over the country, not necessarily one area.
Maharashtra, we are getting.
Maharashtra, we are getting. South, we are getting. North, we are getting. All over. There is no specific-
Are they getting executed, yes? They've been executed also.
These are typically 4 MW-8 MW orders.
Okay. Sir, how is the potential going forward, sir, in the next year?
I think I've already mentioned that quite in detail, both in the international sphere, and also given you the strong inquiry base that we have. It's very positive in terms of order booking for next year, and if that is what your question is. That is the growth potential for the balance part of FY 2021 and going into 2022. We really look at order booking, and that looks okay.
Sir, lastly, when we see your backlog, it is at INR 694 crore. During one of the earlier questions, you had highlighted that our aspiration is to be flat on a YoY, that INR 723 crore kind of number. Assuming even a flattest flat number YoY, which will mean INR 280 crore of revenue, I mean, order flow ask, sir. Isn't it a challenging ask, sir, for Q4? It would mean the highest ever order-.
It is challenging. You've done the math right. We're looking at both aftermarket and product in Q4.
Yes, sir. Okay. We're confident to do around that, sir.
Let me tell you. Suppose we get it in end of March or it goes into first week of April. The spreading out of quarter to quarter is good. We have to show the visibility going out into H1 of next year. The second thing, let me tell you that the execution period of orders varies from three months to 14 months. We really look at picking up orders to fill in our turnover requirement.
Okay. Sir, JV has been profitable on a YTD basis. How do you see for next year, sir?
We are looking at the business as normal.
Okay. No, like last year was loss. Next year also will we be profitable company, sir?
When I say normal, if we've been showing profits, there's no reason why we shouldn't do that again.
Okay. Good to hear, sir. Thanks a lot, sir.
Thank you.
Thank you. The next question is from Anand Bhavnani from Unifi Capital. Please go ahead.
I think we've-
Anand Bhavnani, your line is unmuted. Please go ahead with the question.
Hello?
Hello.
Yeah.
Yes.
Sir, on oil and gas, we have been having a conversation on these calls for three, four quarters now.
Yeah.
Wanted to get a sense as to how many companies in oil and gas space have we applied?
If you go to one company, let's take Pertamina or Petronas, they have 12 different divisions in the oil and gas company of Indonesia and Malaysia and Kuwait. It's huge. Each one, when they pre-qualify you, it's a very big thing because then they have to send you the inquiry.
It's an expensive process for them also.
Their verification and their diligence. These people, they are not on getting another person in. They say, "We already have two parties. Why do we want another one?" You need a lot of perseverance and our Middle East office is doing a lot in that. So is our Southeast Asia office. They concentrate on that.
Yeah.
We are heavily with EIL in this, and domestically.
Yeah. Currently, you mentioned Middle East and Southeast Asia, you have offices. We are not putting any efforts in the U.S. market?
You have a good point. We are thinking of now.
Okay. In the Middle East and Southeast Asia, as of today, do we have any approvals to be a pre-qualified vendor?
Yeah.
Okay. Would it be fair to say that if we have maybe two or three approvals by the end of FY 2021, so next 15 years, maybe two approvals, three approvals in, would it be a good situation from our perspective? Would it be undershooting, overshooting?
No, I would want more.
Okay. Good, sir. Good luck. I'll come back in the queue for any additional questions.
Thank you.
Thank you. The next question is from the line of Lala ram Singh from Vibrant Securities. Please go ahead.
Hello, sir. Sir, sorry for my ignorance, may I know what is the issue in Turkey?
The issue in Turkey is the internal situation and the economy there. The people have put their projects on hold.
This is a recent phenomenon, or has it happened over the last 12 months?
In the last 15, 16 months, you've been reading about it. The projects, they may not have lost their project, but they've just been put on hold.
Okay. Got it. Got it, sir. Thank you.
Okay. Thank you.
Thank you. We would like to remind our participants that you may enter star and one to ask a question.
Okay, I think, should we wrap it up?
There are no further questions.
Okay
I now hand the conference over to the management speakers.
Thank you. Thank you, everybody. Thank you very much for the very interesting questions. I'd like to end as we started the call, that we've had an exceptional nine-month performance. Going forward, we're very encouraged with the inquiry pipeline, the orders on hand, the new geographical segments that we've been able to attack in, we've talked so much about oil and gas and geothermal and Southeast Asia and Middle East areas and Europe. We look forward to a bright future not just in the last quarter, but in FY 2021. Capacity is there. Technologies are now in the front line, and we feel that our service element is really a very big distinguishing factor for Triveni and its competition, and also for the bottom line. Thank you.
Thank you very much, members of management. Ladies and gentlemen, on behalf of Triveni Turbines, that concludes today's conference call. Thank you all for joining us and you may now disconnect your lines.