Ladies and gentlemen, good day and welcome to Triveni Turbine Limited's earnings conference call. As a reminder, all participant lines are in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Rishabh Brar from CDR India. Thank you, and over to you, Mr. Brar.
Good day, everyone, and a warm welcome to all of you participating in the Q4 and FY25 earnings conference call of Triveni Turbine Limited. We have with us today on the call Mr. Nikhil Sawhney, Vice Chairman and Managing Director; Mr. S. N. Prasad, Chief Executive Officer; Mr. Sachin Parab, Chief Operating Officer; Mr. Lalit Agarwal, Chief Financial Officer; and Ms. Surabhi Chandna, Investor Relations and Value Creation. 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 now like to emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner.
We will start this call with opening remarks from the management, following which we will have an interactive question-and-answer session. I now request Mr. Nikhil Sawhney to share some perspectives with you with regard to the operations and outlook for the business. Over to you, Mr. Sawhney.
Thank you very much, Rishabh, and a very good afternoon, ladies and gentlemen. Thank you for joining the Q4 FY 2025 earnings call for Triveni Turbine Limited. At the outset, I'd like to welcome you to what has been another record quarter, the 17th in a year of growth for the company. This has been the highest-ever annual revenue, EBITDA, PAT, and order booking, along with the record closing order booking for the company in FY 2025. We had the highest-ever revenue of INR 20.06 billion, an increase of 21%. We had the highest-ever EBITDA of INR 5.18 billion, up 36% year-on-year, with a margin of 25.8%, which is an increase of 280 basis points year-over-year.
We also had the highest-ever profit before tax at INR 4.89 billion, up 37% year-over-year, with a margin of 24.3%, which is an increase of 270 basis points year-over-year, as well as the highest-ever profit after tax at INR 3.59 billion, an increase of 33% year-over-year. All of this was done, of course, based on the order booking that we had not only during the year but in FY 2024. We are very proud that we have had the highest-ever annual order booking of INR 23.63 billion during FY 2024, an increase of 26% year-over-year. This has left us with a record outstanding carry-forward order book as of March 31, 2024 of INR 19.09 billion, an increase of 23% year-over-year. Investments, including cash, stand at INR 9.87 billion, an increase of 12% from March 31, 2023.
I'll give you a little bit more of an indication as to where our cash stands given the balance sheet and the execution that we had during the month of March. The board has also recommended final payment dividend of 200%, which is INR 2 per equity share for the financial year 2024-2025, which is subject to the approval by shareholders. This is in addition to the interim dividend of, again, of 200%, which is also INR 2 crore per equity share of INR 1 crore each. Order booking for this current year has grown very well, as I've already said, by 26%. The product order booking growth has grown by an impressive 38% to INR 17.41 billion in 2024-2025. The key drivers for growth in product order booking were the finalization of orders in the renewable energy sector, industrial plants for industrial power generation, and heat, power producers, and API turbines.
Domestically, order booking was supported by the company's strategic foray into the carbon dioxide energy storage solution, which I'll give more indication about as we proceed. In the API segment, the inquiry base has expanded geographically, resulting in order finalizations for both drive and power turbines across the Middle East, Southeast Asia, Central and South America, and Europe. As a result, the company has achieved its highest-ever annual product order booking for the fourth consecutive year, representing a key milestone in its pursuit of sustainable innovative solutions. This also gives an impression of how the company is able to introduce new products and solutions to be able to withstand the volatility that exists in end fixed capital formation markets. The company continues to see a good international demand, which is reflected in the export order booking, which has grown by 23% year-over-year to INR 12.59 billion during the year.
This includes orders secured across broad power ranges from key regions, including the Middle East, Europe, North America, Southeast Asia, and Africa. The total consolidated outstanding order book stood at a record INR 19.1 billion, which is high by 23% compared to the previous year. The domestic outstanding order book stood at INR 8.2 billion, which grew by 9% as compared to the previous year. The export outstanding order book stood at a record INR 10.9 billion, which is up 36% year-over-year and contributes to 57% of the closing order book. The inquiry pipeline for both product and aftermarket segments remains very robust and is globally diversified. In FY 2025, the international inquiry book has grown by over 30%, while the domestic inquiry book has grown by an even more impressive 120%, providing a strong visibility to the coming year.
By diversifying across geographies, product market, and aftermarket segments, we also aim to mitigate the risks associated with market volatility. While the inquiry book is extremely robust, the market in India has declined, as we calculated for FY 2025, by 10%. While we were anticipating Q4 to be more robust in terms of domestic orders finalizations, the robust level of inquiries gives us good confidence that sectors will come back into our order book within the coming quarters. A lot of our growth is also driven by research and development, which is a key focus area for the company. We continue to develop new turbines for historic ranges of smaller turbines, as well as for medium and larger range turbines, which are required for a variety of different applications, including for API, as well as for geothermal and other niche sectors.
At the same time, the higher MW categories also provide us with greater visibility into a broader market that we can cater our products towards. We also continue to develop new and innovative solutions utilizing carbon dioxide as a means for fluid transmission, which includes an order which we've received along with our Italian partner, Energy Dome, with NTPC, which is for an INR 290 crore order for a 160 MW-hour long-duration energy storage project at NTPC's Kudgi Supercritical Thermal Power Plant. We are extremely proud of this order as it not only allows a validation of our technology. We will, of course, need to work with our partner here as well as with the client to ensure a seamless and smooth installation, which will then allow us to validate this in the Indian market so that we could operationalize this as a product segment going forward.
The company has also, as I've spoken and spoke about in our previous conference call, will be investing into expansion of certain international subsidiaries, in further investments into research and development and testing infrastructure, as well as adding a new bay in its Sompura facility. The total CapEx forecast for this current FY 2026 is about INR 1.65 billion, which includes a carry-forward of about INR 4.44 billion from the previous financial year, which is FY 2025. The CapEx will not only allow us to augment certain capacity in terms of our assembly as well as manufacturing expertise, but will significantly expand our research and development and testing infrastructure which is required. Apart from the routine CapEx, which is required for maintenance, there will be a further CapEx in our international subsidiaries to cater to what we foresee to be growth in those markets.
People continue to remain the cornerstone of our organizational excellence. Through a focused approach to internal talent development, external hiring, as well as continuous learning diversity, as well as industry collaboration, we are building a future-ready workforce aligned with our customer-first mindset and innovation-driven agenda. In FY 2024- FY 2025, Triveni Turbine successfully integrated its talent strategy with business priorities, strengthening capability, ensuring leadership continuity, and setting a strong foundation for sustainable future growth. As a globally trusted energy innovator, Triveni Turbine is well-positioned to sustain healthy performance in the near term after delivering a strong performance yet again in FY 2025. This outlook is supported by a robust order booking in API as well as the industrial power generation turbine segments, as well as a market expansion in high-potential regions such as the United States. A robust domestic supply chain further enhances competitiveness and ensures business continuity.
The aftermarket business also shows promising growth prospects, bolstered by an expanding range of offerings, including spare parts, services, and refurbishment, designed to cater to a broader customer base of rotating equipment encompassing steam turbines, gas turbines, utility turbines, as well as geothermal turbines. The company's expanding presence in the global market, along with the increasing demand for renewable energy, energy efficiency, waste-to-energy, and decentralized power generation solutions, continues to present significant and substantial growth opportunities for the company. We are confident in leveraging these opportunities both domestically and internationally, which will enable us to maintain the growth and profitability in the coming years.
To give you an idea on some of the ratios that the company achieved in the current year, the company achieved an EBITDA to sales of 21.8% without including cash, a PAT to sales was at 17.9%, and our return on equity annualized on book equity was 33%. Without investment and bank balances, our return on equity was 235%, while the return on capital employed annualized was at 45%. Return on invested capital without investment and bank balances was a very impressive 307%. Asset turnover continued to be maintained at about 5.9% and a current ratio of about 2.2. The balance sheet of the company remains robust. In the quarter ending of Q4 FY 2025, we had certain backending of orders which happened in the month of March, which you'll see from a balance sheet where we have higher receivables as well as certain other current assets.
Both of these are short-term in nature and would have already been reversed to a significant extent in the month of April to return to our low receivable metric. The company has grown very rapidly in the last three years. Between FY 2022 and FY 2025, the revenue of the company has grown by 2.36 times with a CAGR of 33%. In the same period between FY 2022 and FY 2025, the PBT has grown by 2.82 times with a CAGR of 41%. Given our growth of order booking of 26% in FY 2025 as well as our ending order book, which is 23% higher, we are confident of growth in the coming year. As what happens with order booking as well as turnover, some of this growth will be lumpy.
Having said that, our inquiry book and our order book gives good visibility of growth for the coming year, and our inquiry book gives a good visibility of growth for the coming future. This, coupled with our innovations in new product introductions and new technology introductions, which will happen in subsequent quarters and subsequent years, gives a good visibility of the company to sustain its remarkable growth in the coming years. Of course, maintaining these high growth rates will be difficult, but we have full faith in the management who have performed exceedingly well, and we are happy to take your questions, Ram.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two.
Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Ravi Swaminathan with Avendus Spark . Please go ahead.
Good afternoon, sir. I'm a little bit outnumbered. My first question is with respect to the API turbine market. So essentially, if you can talk about what is the size of the business right now, what is the size of the industry, and what kind of scale-up in terms of business can happen over the next two to three years, and how and why it can happen.
Okay. Before I ask S. N. Prasad, our CEO, to comment on this, we don't give specific market numbers, Ravi, as you're aware.
Having said that, as we've talked about over the last several quarters, there are very distinct avenues for growth for the business, which is firstly to maintain its market share in the smaller turbine market, which is below 30 MW, at the same time increase market share in the higher megawatt space, which is above 30 MW. While a traditional growth segment of the business has been energy efficiency and renewable energy-based power generation, which continues to be the mainstay of the business, API as a market segment has increasingly become a key growth driver for the business, not only in FY 2025 but also it showed a little bit in FY 2024.
Going forward, we aim to increase our focus on this market segment because not only is it focused on customers who demand exceedingly high quality, high efficiency, high technology turbines, but also it is a market segment that provides a certain degree of reliable and routine investment. This is double down. This is also reinforced by the fact that we've seen, while oil prices may have come down, the long-term investment both into oil diversification as well as into gas and methanol and other forms of downstream production for the oil-integrated majors continues at a robust pace. The inquiry book also reflects that in terms of the growth, both domestically as well as internationally.
If we look at it from a perspective of what segments will continue to exhibit the most amount of growth as far as the growth in our order book goes, yes, you're very right. API will be a market segment which will drive, in our opinion, more than energy efficiency and renewable energy. However, renewable energy will continue to maintain the largest segment of demand for the company's products. Prasad, would you like to comment on Ravi's question?
Yes, sir. Yes. Good afternoon, Ravi. In continuation to what Vishyamdi shared there, yes, API inquiry pipeline is quite robust, and we are quite bullish, as we communicated in earlier conferences also. We have been in the approved vendor list of major refineries, petrochemical complexes across the globe.
Even last year, last financial year, some more positive results we could be able to gain in terms of getting into the approved vendor list, which has given a strong inquiry pipeline. We are quite bullish because we are there in the drive turbine as well as into the power application of the API machine. With that, it's going to be a strong growth driver for us going forward.
Wonderful. My second question with respect to the CO2-based energy storage system. Essentially, FY 2025, we had bought a single order from NTPC Kudgi. How replicable is such kind of orders? What is the visibility in terms of scale-up of this business? Can this be replicated in more power plants, both NTPC and non-NTPC-related business?
If you could talk more in terms of the profitability angle also because how much component value-add that we can do in that project and how much would be outwardly sourced from other external parties? Because of that, how the profitability is likely to pan out? Is it likely to be in line with the overall company-level profitability if you can talk about that?
Yeah. To address it, firstly, on the margin front, this is a new sort of project for us in a sense. It's a little bit more than just the product being sold, but the margin expectations are in line with our domestic margins. Having said that, this is a developmental project which we are working closely with our international partner along with the client.
We would not be entering into this if we did not see the potential for this to scale as a business. This is a much more, the opportunity here is very solution-oriented to provide a solution for long-duration energy storage based on subcritical cycle of carbon dioxide. As you know, Ravi, we have been also developing transcritical as well as supercritical cycles. The way as to what is replicable going forward, we will have to see based on the economics and the reliability to customer. Before I comment as to how scalable this will be from a revenue perspective for Triveni Turbine, we will have to just wait and see a little bit. We will have to see certain factors in terms of how the economics work out, how the reliability works out with the customer. We are obviously very hopeful that this will be a great solution for our customers.
More than that, because you see, the current form of providing either chemical-based battery storage through lithium-ion or kinetic-based flow pump storage hydro as energy storage option, thermal storage is also extremely important. The cost parameters already make sense. We just have to see if the rest of it can also work out. Principally, there is no reason why there should not be an alternative in our basket for energy storage for the country as well as globally. At the current point in time, when we are forecasting and giving forecasts for our inquiry growth, etc., it does not include this as a market segment.
Having said that, when you look at the INR 290 crore order in this Q4, and if you see how much of that, how much of it was in the historic turbine segment versus the CO2, you also should keep in mind that we did take out some orders. Because of the high order booking this quarter, we've cleaned up our order booking by taking out approximately INR 140 crore from our order book of slow-moving orders, which we have advances of. We're confident because we have advances that these will come back in the medium term. From the near-term visibility, we've taken it out of our order booking. This, again, gives you an idea about the quality of our order book in terms of what can be executed. That, coupled by our book and bill, gives us good visibility for the year.
In terms of what you said in CO2 value addition, the company's scope is, again, in excess of 50% directly. We have good control on cost. Ultimately, we are also viewing this from a perspective of putting our best foot forward. It is a little premature for us to be able to tell you how scalable this will be as a business. I would imagine by Q3, Q4 of this year, we should be able to give you a little bit better idea as to where it stands. Needless to say, this has come quicker than we thought it would in terms of a market segment for Triveni Turbine. We are quite optimistic that it will become a distinct market segment for growth in the very near future.
Understood. My third question is with respect to the U.S. foray.
Given the tariff-related ups and downs which are being seen from that country, how do you think about the scaling of our functional sale over the next two to three years? Is it likely to be largely after-sales-related work there? Then we can think about the product exports. How to think about that?
Ravi, there have become many different questions within that one question of yours. Let me say, as we currently stand, firstly, as you have seen, I do not think we have our detailed consolidated balance sheet with you just as yet. Or it is there, so to be said. We have in excess of about INR 20 crore-INR 25 crore loss in that subsidiary. The results that you are seeing are post that loss, which has been an investment into that enterprise. We believe that that enterprise will show good performance.
This is backed by our belief of what we're seeing from an inquiry generation. Initially, we thought that we would use a U.S. subsidiary to cater to our growth in the Americas, which is both North and South America. Given the current uncertainties and given the customer preferences, we are actually booking Canadian and other orders directly from India. The marketing efforts are still done from the U.S. subsidiary. Looking at the U.S. subsidiary performance directly, it will take a little bit of time for it to show properly on the individual P&L of the subsidiary. Suffice to say that we believe that there's going to be a good growth market both from the aftermarket refurbishment segment as well as new product sales.
We see the API market in the United States as well as distinct geothermal and industrial power generation, including energy efficiency, as key growth drivers. The U.S. itself, as a $25 trillion economy with the capital base that it has, presents many opportunities. Prasad , do you want to give a comment on the U.S. subsidiaries and how we see it? And maybe you can also comment on the capacity augmentation in the U.S..
Yes, sir. So U.S., as you mentioned, the pipeline is strong, and people started accepting our brand there. And even recent uncertainties, otherwise, by this time, we would have gotten a little more success from Canada and all directly on our U.S. entity. But those orders got directly onto Triveni Turbine's Bangalore because of those tariff ratios.
Otherwise, we are quite bullish because the way how the inquiry pipeline for both refurb services, that is, aftermarket as well as product, getting built up, especially from geothermal, pulp, and paper, which are the strong segments in that market. The competition also, basically, I am for the same kind of segments, but they also have the same disadvantages or not same sort of advantages when it comes to the tariff structure. That way, we are not really concerned on that. We are quite bullish on that. Maybe such a point.
Good afternoon. As our Vice Chairman has mentioned, we are going ahead with our expansion plans in the United States. The CapEx that we had planned, we are on track. There is a little bit of a deferment just because of timing issues. We are going ahead, and we are creating the flexibility in our infrastructure there.
Depending upon how the tariff structures take shape, we would have the flexibility to be able to even make turbines there. Relatively speaking, with our competition, we are well poised to tackle the market. The potential is good. Tackle the market the way the tariff structure shapes up and be able to go ahead with our long-term plans. Because of these changes in the macroeconomic situation, yes, there might be a little bit of a delay in terms of expanding the way at the rate at which we want to. As we mentioned already, the Canadian orders and some other orders, we have started taking on the Indian entity. For sure, the U.S. market itself for aftermarket and product is very promising for us. Thank you.
Thank you. Thank you, sir.
Thank you. Mr. Swaminath, please rejoin the queue for more questions.
A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Amit Anwani with PL Capital. Please go ahead.
Hi, sir. First of all, congratulations for the strong set of numbers. My first question on the international market, sir, you have highlighted in your opening remark about expanding in global markets. And we have been seeing a very strong performance from exports. The inquiry pipeline is also very strong. Just wanted to understand, while expanding in markets, what is our strategy? How are we dealing with the competition there? Or is it the market which is already very conducive for our products there? And what sort of products are highly acceptable for Triveni in the global markets? We wanted to understand more color on expanding global markets and how we strategize that.
Okay. Thank you. Good question.
You see, what happens in a capital goods space is the best branding that you have from a new order perspective is successful installations of orders by themselves. As our installations grow internationally, that allows us to gain better customer acceptability and confidence on our product ranges. This stretches not only in our historic smaller ranges but also the higher megawatt ranges. As we believe, especially with the higher megawatt ranges and the specialized API or other applications, as more reference sites are put up for our customers, we will gain better traction. That, coupled with our initiative to be closer to customers through both subsidiaries as well as a more focused sales and market initiative, will also bear fruit in allowing us to capture greater global market share. This is something that we're using as a cornerstone of our international expansion strategy.
Expansion is not, these are not CapEx related. It is more a question of how can we be more relevant to our customers so that we have a higher chance of conversion of every inquiry into an order for us.
Yes, sir. Secondly, given the very strong inquiry growth which we have seen in domestic and international, and very strong top-line growth this year as well with good margins, can we expect similar to continue for FY 2026 given there is a good order book and inquiry as well? Just wanted to have some color on the growth trajectory since we are expanding still for the FY 2026 year. Yeah.
Yeah. Actually, if you look at it, our revenue grew by 21% year over year. Our order booking has grown by 26% year over year, with our ending order book at 23% higher.
It gives you an idea as to the growth that is possible for the coming year. We are quite confident to be able to achieve that. What you would also find in our balance sheet is that because a lot of the orders were back-ended, actually, we have a lot of goods in transit which were not able to be billed directly in March itself, which will come in April. These are things that we are already off to a decent start. Q1 will be a little volatile from the company's perspective. There will be growth in market segments. I have to say that when we look at the full year and our current obligations to fulfill our customers' expectations in delivery, we are confident of growth in revenue of a good manner in FY 2026 as well.
Right.
Lastly, amid all this geopolitical and tariff war going on, any challenges which you faced? Because I can see your commentary has been quite commendable and positive. Anything which was.
The fact is that, as you can see, the domestic market has sort of declined year over year, even though inquiry levels remain robust. The uncertainty is causing deferment of order placement, even though these orders do need to be placed based on either other CapEx or other commitments that have been taken, be it financial closure of projects, etc. I think what you could say right now is that there has been an elongation of order finalization timelines. That is something that is a concern. We have to wait and see if this is something that is a one-quarter thing or something that continues for multiple quarters.
Sir, thank you so much for answering my question. Thanks.
Thank you.
Thank you. Next question comes from the line of Mohit Motwani, Tara Capital. Please go ahead.
Hi. Am I audible?
Yes.
Yeah. Thank you for the opportunity. My first question is on one of the charts in your presentation, which shows that how the 0 MW to 100 MW for the steam turbine market declined from 8.7 GW to 6.9 GW. And we have grown our revenues by 21%. I understand this is a function of increasing market share. Can you give us some idea how much has realizations improved on a year-on-year basis from FY 2024? If not on the company level, at least on the industry level, if you can give some sense on the per megawatt realization, how have they improved?
Oh, the fact is we manufacture a customized product.
Every order is distinct in pricing as well as cost. The features that a customer may require do not allow, it does not enable us to give a very generalized number. Having said that, over a period of time, you have seen base material prices rise as well as the fact of overhead costs. There has been an increase in costs in the market segment for us as well as our competitors. As the market size grows, I mean, you have seen an expansion in margins. In the distinct market between FY 2024 and FY 2025, as you pointed out in terms of decline in markets, there is a lot of nuance in that number. We give that number to give a broader indication of where the market sits.
Having said that, we're quite, if we take out and eliminate markets in which we don't participate directly, which is China and Japan, we think that the market is quite robust still. Our inquiry levels are at record levels. We think that that presents a distinct opportunity for us. This is despite the volatility that may have been there for the last three, four months anyway. We're quite optimistic. Our gain in revenue, despite the market decline, is sort of contributed by the fact that we are approaching newer market segments and growth and achieving a higher market share than we have in the past. I think that's the way that you have to look at it, that we don't capture and cover the entire market.
As we do more of that, the more macro number will be a little bit more meaningful for us.
Sure. That's helpful. One more question was, when you said maintaining such high growth rates could be difficult, is that baking in some conservatism on the export side, given you have seen some modulation in the export orders in the last two quarters? I understand these are lumpy in nature. We just want to get your perspective on the export orders. I think this was one of the big opportunities for us and has been, rather. If you can elaborate a bit more on that.
Yeah. No, I think the fact is that there's a base effect on some of these numbers as well. Of course, as you point out, these are lumpy.
Exports will continue to remain a mainstay for our growth because not only does it allow us to be relevant, it allows us to benchmark our competitiveness. The fact is, ultimately, it is a much higher margin segment for us. We are quite confident that the export market will continue to be a key driver of growth for us. It is actually we need the domestic market to revert. That would be a bigger thing for us. To just clarify your point that I think that you said that we may not be able to maintain the high growth rates, the reason I said the high growth rates is because we have had a revenue growth of 33% CAGR over the last three years and profit growth of 41%. Now, if you look at those numbers, those are very high numbers to achieve on a higher base.
But having said that, we have very high expectations of growth on our business, both in profitability as well as revenue, given the newer market segments that we're entering into, given the fact that we already have a much higher order booking level as well as inquiry book level.
Thank you. Mr. Motwani, please rejoin the queue for more questions. Next question comes from the line of Teena Virmani with Motilal Oswal Financial Services Limited. Please go ahead.
Hi, sir. Congrats for a decent set of numbers. My question is a follow-up question in line with the previous participant on both domestic as well as on the export order inflows. We have had a fairly decent inflow numbers on the domestic side. If you remove that one large order based on CO2, overall domestic inflows have declined on a year-on-year basis.
When can we see the base orders for Triveni to start ramping up? Because inquiry pipeline has been fairly strong. What is stopping this inquiry pipeline from getting translated into order inflows? Also, which are the sectors and subsectors within this inquiry pipeline which would materialize first and then which would materialize later? That's my first question.
Yeah. To put it in perspective, in Q4, we did take out about 140,000 orders as well. If we look at that, actually, there's been a growth in order booking. Now, having said that, you're right. It's not to our expectations. We did expect domestic orders to be higher than the current level. There's deferment of orders. I'll ask Prasad to give you an indication as to where he sees orders coming in and which market segments on the domestic side as well as internationally.
Prasad, do you want to comment on the inquiry levels and where we see?
I will take it. Domestic-wise, yes, in Q4, what we expected did not materialize because the last year's overall domestic market is a muted market. We know that last year, three quarters, two quarters for a general election. Another major segment of discovery that is in Maharashtra, there is also election in the third quarter. We expected Q4 will bounce back. Even though finalizations did not take place as we anticipated, the inquiry pipeline started building up. That way, if you see, especially the inquiries from process flow generation, it is a strong pipeline, almost double compared to last year. Following with steel, cement, now followed with oil and gas.
That way, if you see, more or less every industrial segment, inquiry pipeline is quite bullish because last year, whatever orders not got finalized, majority of those things, we are hoping that that will come for finalization pattern as the inquiry started building up. We are quite confident. We are also carefully watching the scenario, the current tensions, whatever there. Hopefully, things should improve upon.
Sure. These Prasad Cogen, steel, cement, they can be the first one to respond once this macro uncertainty resolves?
Each order is distinct by itself. I do not think you can generalize in terms of segments. What we saw because of the unviability of steel last year, like that FY 2025, those orders were muted in Q3, Q4. With some safeguard duties coming back in, those segments will come back.
There's a little bit of fluidity in individual segments based on their own economics. You'll have a consistent demand that happens from cement based on their capacity expansion for waste heat recovery as well as for brownfield, refuel expansion turbines. In other segments, be it in recycling, it is a growth market segment. Both in paper and paper as well as plastic recycling, it is a consistent market segment. So is the food processing sector, which requires a different set of turbines. Market segments like pharma and chemicals are a little more muted. The distillery market seems to be back with some robust demand.
Got it, sir. My second question is related to aftermarket-related opportunities in your target geographies, be it Europe or U.S.. Where do you see this share of aftermarket as a percentage of revenue over the next few years?
It can be broadly in the same range of around 30%-32%, or can it move higher?
No, you see, we're having very strong product sales growth. And it's because of that that you have some of the growth in the aftermarket is getting overshadowed. But the aftermarket is growing in a very robust manner. As you can see, the growth in our EBITDA margins is given by the fact that we have very high margin aftermarket orders, both from the refurbishment as well as the spares and servicing segments. The refurbishment segment, and specifically our contract in South Africa, has moved up the value chain to a higher value-added contract in which the revenue would be slightly lower. And so therefore, the margins and the margins therefore higher.
While it may not contribute more on the revenue side and therefore percentage of aftermarket as a percentage of sales, these are higher margins. If you blend it all, at the end of the day, we're quite happy with the 33-odd % aftermarket as a percentage of sales. Yes, we expect it to rise by a % or every year consistently so that it's contributing more because we believe that the refurbishment segment in specific has a very high growth rate potential. We're happy at the level that it's at right now because ultimately, we don't want to sell excessive spares to our customers also because ultimately, we want them to be able to buy more products from us in return. We have a very high repeat customer base. Balancing that strategy is also very important.
Got it.
Lastly, on this aftermarket for U.S. geography, can your capacity expansion or the strategy for growing in U.S. be oriented more towards aftermarket, or will it be more oriented towards product sales given the current tariff-like situation?
Look, the capacity is fungible as such in itself. The fact is we are approaching both market segments equally rigorously and with as much focus.
Sure, sir. Thank you. I'll come back in a few.
Thank you very much.
Thank you. Next question comes on the line of Mahesh Bendre with LIC Mutual Funds. Please go ahead.
Hi sir. Thank you so much for the opportunity. Most of my questions have been answered. Prasad, our inflow last year grew by 26%. Given the current inquiry flow, will we be able to maintain this kind of growth rate for this financial year?
You're putting our ambition is, of course, to exceed it, but we'd have to wait and see how finalization happens. I think that a growth of 26%, given the fact that we have book and bill within the year, our spares and services have a lead time to execution of anywhere between two to four months. Order booking for that segment can go all the way up to end of Q3 for it to be billed within the same financial year. For smaller-rated turbines, even Q1, a part of Q2 order booking falls into the execution. Despite the book and bill overall order booking, given the inquiry levels, we're quite confident that we'll be able to pick up orders, which will give us good growth in the coming year, but also visibility for growth in FY 2027.
Sure.
What will be our capacity utilization as of now?
We do not really work on that number because we do not have much capital employed. Having said that, we are currently operating on a two-shift basis, and we do not see capacity as a real constraint. We are adding a bay, which is more from an assembly perspective and some manufacturing capacity, which is part of our CapEx plan for the current year, which may spill over into FY 2027 a little bit also, which will augment all of this. We do not see that as the biggest issue.
Thank you. Mr. Bendre, please rejoin the queue for more questions. Next question comes on the line of Chirag Muchhhala with Centrum Broking. Please go ahead.
Yeah. Hi sir. The question is on the Europe market and more specifically U.K., since that has been historically one of our good markets.
Recently, India and the U.K. have signed that FTA. Just wanted to know, will this be—I mean, very hopeful for us in any way? Is currently whatever our market share or competitive position is, are we relatively negatively impacted by some of the taxes which will go away? Just your thoughts on this, please.
No, we're not either negatively or positively impacted by it. To the extent that it builds more confidence in the British economy and allows them to have more capacity expansion and CapEx, that will benefit us. I don't know if it will. I think it's just neutral. Most of these FTAs are neutral to us because our product is not heavily taxed as a duty-buyable item both ways. Imports into the country are pretty much at zero duty anyway. It doesn't help either way.
We just need more demand to come into that market segment. The U.K. presents some distinct opportunities in the municipal solid waste incineration and energy efficiency, green power market. That's about it for right now.
Okay. Okay. Secondly, just a follow-up question on the capacity. Whatever CapEx that has been lined up over the next two years, in terms of turbines manufacturing, both in India and possibly in the U.S., I mean, what would be the quantum of increase in our capacity that we are planning over the next two to three years, maybe over a medium term?
Actually, given our high asset turnover and return on capital, like I said with the last question as well, we do not have much capacity employed.
When you look at it in terms of how scalable the business can be given our current balance sheet of investment and what we're planning in terms of expansion in Bangalore as well as in the United States, what you have to view is the fact that how many shifts you're working and how scalable is that. At this current point in time, when we're working a little bit less than two shifts on operations, that has possibility of expansion by itself, more than the fact that we have further utilization of assembly capacity. What we're really trying to augment here is more testing ability, assembly capacity. Now, assembly capacity can be constrained at times, but at the current point, we are able to balance and manage in excess of 300 plus 350-odd turbines.
Our endeavor to sort of give a little bit more capacity is so that we do not end up bottlenecking operations which happen at times, like for example, this March. It is worth not having those bottlenecks. Capacity really is not a constraint on an annualized basis, but maybe on a monthly basis, there are some issues that we may need to streamline.
Thank you. Mr. Muchhhala, please rejoin the queue for more questions. Next question comes on the line of Amit Mahawar with UBS. Please go ahead.
Nikhil, hi. Congratulations on great results.
Nikhil, my first question is, if you see fiscal 2025 for the year of great performance on product exports, whether it's orders or P&L, but services, I'm not judging services, which is flat in orders this year, but we want to throw some light here on how will this grow in 2026 and 2027 because you are building a team even for the North American market. That's my first question. Some color on after-sales.
Yeah. No, after-sales is an extremely important part of our business for two reasons. One is that, firstly, it's a high-margin segment. More than that is the fact that it enables customer satisfaction and allows us to provide the services that our customers need, which confidence is what leads to repeat orders. It's very, very important from a customer satisfaction perspective. Also, there are two segments to growth in the aftermarket.
One is our spares and services, which will grow based on install-based growing. As our install-based—and you sell spares really after some degree of operation of the turbines. Given the growth that we have had over the last several years, those products, maybe two, three years, which we commissioned two, three years ago, will now start coming back and come into the ordering for spares. We believe that that will continue, but that growth rate will be—I say it has to be done in a manner that we have to take the customer along with us. We cannot just be selling excess. The real growth rate for us, which is somewhat disappointed where we have much more potential to grow quicker, is the refurbishment segment. A segment like that, which we think can drive a lot of the quick revenue, quick wins for especially the U.S. market.
We're still very hopeful. This means expansion, not only of our sales and marketing network, to be able to cater to the varied requirements that may happen in the refurbishment segment, but also technologically, we need to be relevant and be able to provide the solution that customers want. There is an investment in people that's required to allow that market to grow. We're quite hopeful that from a long-term and medium-term perspective, this is a market segment that we can quite confidently say will continue to grow for Triveni.
Sure. You've been very measured on your investments in very select markets. For example, SADC, where you had less than four years' payback that gave you confidence to enter one of the world's largest markets, North America.
Again, and maybe Prasad and team can chip in here if you—what is the size of API services and large machines that we are targeting in 2026, 2027? What I mean is in your addressable market, which changes now, and I'm talking about particularly one to two years. In long term, I understand it's a very, very compelling market, and there's a scope for consolidation, especially in services, right, in North America, as you mentioned in the last calls. Particularly next one to two years, what kind of large machine orders can we expect in this new market? And some color here on the services. And I was asking more also about the number of the team sizes built in North America. Thank you.
Yeah. So I let them come in on the team size and where they see the distinct.
Services for API, because the customers are extremely risk-averse, especially on the large integrated oil and gas majors, they tend to favor going to OEMs. There are certain strategies that we're trying to employ to be more relevant with them. At this point in time, I can't disclose those, but we see a market, an opportunity for us to work directly with some of these majors to provide their services, specifically in certain regions. Those will be region-specific strategies. Having said that, we do anticipate larger megawatt turbine orders from the API market. We've had good success in FY 2025, which will get executed in FY 2026. We are hopeful in the coming quarters of redoubling those efforts and getting similar successes on that front. It's a very competitive market. There's no doubt about that.
We're quite confident that given our newer entry into the space, we'll be able to show some success. Prasad, could you just talk a little bit about the API market and then touch in a little bit on the U.S. side, specifically for API?
API market-wise, as we got ourselves approved in all the refineries, majority of the refineries, the reputed refineries, the pipeline is building up. At the same time, these are very, very competitive markets, and we are fighting with all the competitors across the globe in different territories. We are very optimistic on API growth because the pipeline is there, acceptability there, technical acceptability also there is that. The second thing here, the differentiation what we bring there is a quick back-end support from India's team across the globe for API. API businesses, majority of the business is through EPCs and OEs.
When this kind of a business is there, what they will be looking for is a quick turnaround time on the inquiry to the proposal sort of a thing. These are the areas where we are working on that. That will give us really good results in the next two years, what we are anticipating on that.
Yeah. Coming to the U.S. market, your query, we have not a very big team in the U.S., but it is very important to understand that in all markets that we operate in, we typically operate also through a network of agents for assisting us in sales and marketing. While the strength of our team directly on our roles may not be very significant, we have people working indirectly for us or for the sales and marketing efforts across the country through our extended agent network.
Also necessary to understand that some of the workshop-related activities that happen in the U.S. are also subcontracted to the partners that we have developed. Team size is as per our plan, but we are looking at expanding it to almost twice the size that we had in the first year, in the second and third year.
One more thing here I want to add, especially we are very, very conscious on the cost. As we know, U.S. is one of the expensive cost-oriented markets. A lot of support, back-end support, as Sachin mentioned, from our partners there, as well as back-end teams from India also supports U.S. team so that there is proper cost orientation is there on that.
Other thing is some emerging markets like SMRs, what we are seeing is that a small modular reactor market is one of the markets, which we are hopeful that traction, whatever we are having, that should give some positive results to us in North American markets. Those are the new markets also. We got access after having the facilities there in the U.S..
Thank you. Mr. Mahawar, please rejoin the queue for more questions. Next question comes on the line of Sarang Joglekar with Vimana Capital. Please go ahead.
Hello. Can you hear me?
Yes. Good afternoon, please.
Yeah. Thank you for the opportunity. On the 30 MW-plus segment, I wanted to understand, you said you were gaining market share and you are already maintaining 50% plus in the sub-30 MW.
On a broader level, what are the key factors the customers look for when choosing the turbines? What are the options, basically? Who are the competitors and why exactly do they go for Triveni?
Sure. That is a very complex question. Every customer has a different purchase position. Ultimately, confidence, if you have an installed base in that market segment, in that industry, in that geography, that tends to build customer confidence. Our growth in market share and in the higher MW segment will happen based on more successful installation. That will feed on itself. The growth there will happen in a more linear manner. You should not expect it to be sort of exponential. We are happy with that because ultimately we want to grow slowly and ensure that we have successful installation.
Got it.
On the API side, same question for the API side. In the competition, as well, we have a player in about.
Sorry, I can't hear you. You're muffled.
Can you hear me? Yeah. Same on the API side, how is the competition? And who are the players, if you could name a few?
I think it's not worth naming competition, but you can Google who are the players in the market segment. Competition exists in all market segments. It's not as if it doesn't exist. We have extremely well-reputed global technology companies in the space, so it exists. At the end of the day, it's a technological product, so the number of competition is limited, and we don't anticipate new competition coming into this market segment.
Thank you. Mr. Joglekar, please rejoin the queue for more questions.
Next question comes on the line of Nidhi shah with ICSA Security. Please go ahead.
Yes. Thank you so much for taking my question. So my first question was on the margin. We've seen for the last nine quarters or so that margin inflation has happened continuously. I was basically wanting to understand what is it that is bringing us this margin despite the fluctuations in commodity prices and our input prices. That would be the first thing. Second is that we have spoken continuously about the inquiry pipeline. Would you like to quantify that inquiry pipeline? In your opinion, would that be more back-ended when these orders would finalize towards the, say, towards the second half? What is your opinion on that?
It seems like now that it would be back-ended, but we are not, unfortunately, we don't give the absolute inquiry levels.
You could have a discussion with Surabhi, our investigations manager, on this question. The first question is done?
Margin increase.
Margin increase has happened because of both aftermarket as a percentage of revenue going up, as well as the fact that we have higher export as a percentage of sales. Both of these factors have contributed positively to the margin. In terms of volatility in raw material pricing and increased overhead costs, those were larger factors in FY 2022 FY 2023 post the real volatility that we saw post-COVID. I think right now our normal supply chain pricing, which we have long-term rates with our vendors and with subcontractors, etc., continues. It gives us good visibility. Therefore, the pricing level that is taken by marketing and sales is knowing fully well what the cost would be going into any pricing discussion and negotiation.
They have a fair idea of the margin level at the time of bidding for orders. As we look forward, I do not think margins are the problem for Triveni. I have always said that that is an area which, because it is a customized product, margins will differ order to order and quarter to quarter. It so happens that we are getting some operating leverage as well. The fact that we have good orders coming from the export market, as well as a higher percentage of spares and service on revenue, is all giving confidence that we have space.
Thank you. Misha, please rejoin the queue for more questions. Next question comes on the line of Trul and Nandu with Edelweiss Public Ordinators. Please go ahead.
Yeah. Hi, Nikhil. Thank you for taking my questions. Two questions from my side.
The first one is, while you alluded to some qualitative color on your foray into 3200 MW segment, but can you just draw a slightly longer-term picture in terms of it's been now four years since we are going solo in this segment, not without our JV partners? Let's say in next five to seven years, what is our aspiration in terms of market share? Can we replicate our market share that we have in 0 to 30 in about 30 MW category as well? Again, give some color and some texture. What are your targets and what are your aspirations for this particular segment?
It's a very complex question you've asked.
In the higher megawatt category, which is one of the largest market segments, is a combined cycle market segment, which is where the steam turbine is used as a bottoming cycle for a combined cycle operation. The typical lead for a combined cycle sale is done by the gas turbine manufacturer. That is a little bit more difficult for us, a market segment, to enter just from a sales perspective because the lead is always taken by the gas turbine manufacturer along with the client. Now, if you exclude that, which is by far the largest segment, yes, our ambition is to achieve the same success that we have in the smaller range. We are quite confident that we will be able to get there. We find that even in the other market segment, we will make foray, but it is very difficult to see how that will actually happen.
We make efforts, but market share gain in, like I said, in the above 30 mMW category, we should assume to be a little linear in terms of growth of market share. In the API market segment, it will be a little bit more lumpy because we're able to get bigger orders and take market share because we have the references in place. Now, if you combine both of those because a lot of the API orders are also in the higher megawatt categories, we think that we could show good growth in this market segment of above 30 MW.
Thank you. Next question comes on the line of Naman with Prescon. Please go ahead. Mr. Naman, please go ahead with your question. Next question comes on the line of Bimal Sampath and Indvijil Mesha. Please go ahead.
Yeah. Good afternoon, Nikhil. Yeah.
Nikhil and team, just wanted to understand, I mean, what is our plan B? I know we are growing very well, but to maintain this 30% around growth rate, I mean, earlier we were talking of getting into this rotating equipment and all that. What is our plan B to maintain our 30%, around 30% growth rate over the next three, four years? Or is there no necessary, I mean, no necessity for that?
No, no. There is a very strong need for us to continue with our research and development, which is to ensure that our current product range not only is relevant and expanding in its niche applications, but equally to introduce new technology and new products, such as what we try to do with our carbon dioxide-based systems. Those research continue. Those continue into other rotating equipments.
At this current point in time, given the growth in our inquiry book, we find it's not relevant for us to focus our discussions right now because it won't be material in some of these developments in the short term. Needless to say that it is a concern for the board as well as the management to ensure that we have a steady stream of products which will allow us to expand our entire market size that we cater to on a continuous basis.
Thank you. Next question comes on the line of Harsh Tewaney with Ashmore Group. Please go ahead. Yeah.
Hi, sir. Am I audible?
Y es, yes. Good afternoon.
Good afternoon, sir. Basically, I had a couple of bookkeeping questions from my side. I noticed that the debtors for us have gone up. They've almost doubled year over year, even though revenue has only increased 21%.
Is there some payment delay that we are facing, or how should we deal with this?
Yeah. Ask me the second question as well, and then I'll answer both together.
The second question was pertaining to the other financial assets line, which again has grown up exponentially. Anything that we should bring into this?
Okay. On the debtors, you'll see two things. One is the receivables have gone up, as well as the fact of other current assets. Both sides I tried to address in my opening remarks to say that because of some dispatches that were bunched up in March, these are orders which have not really come due for payment by customers because we tend to pay on LC at dispatch, and obviously, it's within a period of time that the LC has to be in cash.
We have said that in the months of April, May, that has largely been reversed back to our normal stance of low receivables. Other financial assets are higher because the reflection of FDs, which are over 12 months, are reflected as other financial assets. This is all part of cash.
Thank you. Next question comes on the line of Trul and Nandu with Edelweiss Public Alternatives. Please go ahead.
Yeah. Thank you, Nikhil, for giving me the opportunity again. In one of the comments on API market, Prescal also said that maybe in the future, we will also have a play on SMR, the small modular reactors. Can you touch base as to what are the, I mean, product synergies between API and SMR? Can you give us some context? Because my understanding was that probably in nuclear reactors, the play for turbine is not that large.
Can you just help us understand, is it different in SMR?
No, no. You see, we provide a product that utilizes the heat generated from whichever source. We're agnostic to how the heat is generated. Is it generated through bottoming cycle of a gas turbine? Is it generated through energy efficiency of a cement kiln and some of the waste heat recovery, or through the heat generated from a small modular reactor? The concept's the same. The fact is we utilize that to provide either heat requirement for processes or to drive a generator to produce power. The segment is similar in the sense that that is for power generation. The specifications of the Prescal mentions that the specifications of quality are equally, if not most stringent.
That is a bigger constraint in terms of manufacturing technologies which has to be deployed to ensure that the customer is satisfied. For example, the vibration levels in the API market for a turbine are one-tenth of what it would be in the industrial market. This has a different connotation and implication on how the product is configured. It is with that regard. In terms of the SMR market in specific, we'd provide a little bit more clarity in the coming quarter in terms of how we're approaching that directly as well as the orders.
Thank you, Nikhil. Thank you so much.
Thank you.
Thank you. Ladies and gentlemen, we have reached the end of question and answer session. I would now like to hand the conference over to the management for closing comments.
Thank you very much, ladies and gentlemen, for joining our Q4 FY 2025 results for Triveni Turbine. As I said, this is a record quarter, the 17th quarter of growth for the company. We look forward to you joining us in the FY 2026 Q1 earnings call. Some of the results may be a little lumpy in the quarters in the coming year. Needless to say that we are anticipating another record year for Triveni Turbine in FY26. Thank you again. Goodbye.
Thank you. On behalf of Triveni Turbine Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.