Ladies and gentlemen, good day and welcome to the CG Power and Industrial Solutions Q4 and FY 2025 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touchstone telephone. If you wish to remove yourself from the, please note that this conference is being recorded. I now hand the conference over to Ms. Renu Baid Pugalia from IIFL Capital. Thank you, and over to you, ma'am.
Thank you. A very good afternoon to everyone. On behalf of IIFL Securities, we'd like to welcome the management team and everybody for the Q4 FY2025 earnings call of CG Power and Industrial Solutions. From the management team, we have with us Mr. Amar Kaul, Managing Director and CEO; Mr. Susheel Todi, Chief Financial Officer; Mr. Marais, EVP, Drives and Automation and International Motors Business; Mr. Mukul Srivastava, President, Switchgear Business; Mr. Ajay Jain, Vice President, Transformer Business; Mr. Chidambaram Balakrishnan, Vice President, Railway Business; Mr. Indraneel Dhaneshwar, Vice President, Motors Business; Mr. Sriram Rangarajan, EVP, Head Consumer Products Business; and Mr. Gaurav Makhija, VP Designate Switchgear EPD. Without taking much time, I now hand over the call to Mr. Amar Kaul for his opening comments. Thereafter, we can start with the Q&A. Thank you, and over to you, sir.
Thank you. Thanks, Renu and the team. Good afternoon, everyone, and welcome to CG earnings call today. Starting with a summary of results, we had a solid finish of the year with all-time high quarterly, as well as annual standalone revenue and PBT. Over quarter four, sales grew by 23% compared to previous year's same quarter, and the orders intake grew by 20%, and PBT before OI grew at 20%, making it the strongest quarterly performance in recent times. For the full year 2025, sales grew by 23% year- over- year, and the order intake grew by 35%, and PBT before OI grew at 19%. Our order backlog grew to INR 9,909 crore, a little short of INR 10,000 crore, that's what we are targeting, and continues to be on an upward trajectory, offering strong revenue visibility for the upcoming fiscal year.
Now, as I go deeper into Q4 2025, we achieved sales of INR 2,563 crore with an EBITDA of INR 407 crore and PBT of INR 381 crore. These are the highest quarterly numbers in recent times. Now, as I go deeper into the details of what is behind it, the aggregate sales for the quarter was INR 2,563 crore, recording a growth of 23% year- over- year, and 7% up versus the previous quarter as well. The profit before taxes, before other income, was higher with a growth of 20% at INR 313 crore, at 12.2% of sales, as against INR 260 crore, which was in the previous year's same quarter. Free cash flow generated for the quarter was INR 202 crore. Return on capital employed annualized was 37.4%. Order intake for the quarter was INR 3,650 crore, which is 20% growth year- over- year.
Our unexecuted order backlog as of 31st of March was at INR 9,909 crore. When I go to the full year performance, our aggregate sales for the year was at INR 9,329 crore, which is a growth of 23% year- over- year as well. Profit before taxes was at 19% year- over- year, at INR 1,181 crore, which is 12.7% of sales, as against INR 996 crore in the previous year. Free cash flow generated for the year was INR 727 crore. Return on capital employed was 32.7%, and order intake was at INR 13,526 crore, which is 35% growth year- over- year. The unexecuted order backlog as of 31st of March was at INR 9,909 crore. If I double-click on the overall performance by segment, the first segment, which is industrial, our quarter performance sales was at INR 1,572 crore, recording a growth of 24%.
PBIT was at INR 176 crore, versus INR 175 crore in the previous year's same quarter. The gap that you see is primarily due to the commodity prices increase in the share of railway business that is increasing at a much faster pace, and also the strategic investment in the consumer durable business. The order intake for the quarter was at INR 1,893 crore, which is 2% growth, with a strong order inflow in the motors business primarily in the last quarter, and the unexecuted backlog as of 31st March was INR 3,290 crore. Full year performance for the industrial segment, our aggregate sales for the year was INR 5,823 crore, growing at 16% year- over- year, and PBIT was at INR 707 crore, which is 12.1% of sales.
Again, the same reason, the gap that you see in the profitability for industrial is primarily due to the commodity price increase, some of it which could not be passed on to the market, as well as increase in the share of railway business and the investment of consumer business. Order intake for the full year was INR 6,891 crore, which is 20% growth, and unexecuted order backlog as of end of March was INR 3,290 crore, which is 29% growth. If I go to the other segment, which is our power segment, the quarterly performance sales was at INR 993 crore, a growth of 21%. PBIT was INR 208 crore, which is 21% of sales, as against INR 152 crore, which was 18.5% in the segment. These margins were high primarily because of better price realization on the execution and also the operating leverage.
The order backlog for Q4 was at INR 1,757 crore which is 48% growth, and the unexecuted backlog was INR 6,619 crore. For the full year performance, the sales was INR 3,510 crore, a growth of 35% year- over- year, and PBIT was at the growth of 61% year- over- year at INR 668 crore, which is 19% of the sales, as against 16% in the previous year for the same portion. Margins were higher year over year on account of better price realization, as I said, and also the operating leverage. Order backlog for the full year was INR 6,635 crore, which is 54% growth year- over- year, and the unexecuted order backlog as of March ending was INR 6,619 crore.
Now, I go into the consolidated financial results, which includes the performance of the operating subsidiaries at Sweden, Germany, and Netherlands, which is Drive & Automation, CG LSS Products Private Limited, and CG Semi Private Limited, G.G.Tronics, Axiro Semiconductor Private Limited, and other non-operating subsidiaries. For the Q4 performance for all the subsidiaries put together, the sales was INR 2,753 crore, which is a 26% growth. PBT was at INR 384 crore, which is 13.9% of the sales, versus 14% in the previous year. A little bit of margin impact you see is due to investment into CG Semi and Axiro Semiconductor Business, which has an impact of INR 115 crore. Free cash flow generated for the quarter was INR 80 crore. It was also driven by INR 125 crore of CapEx done in the subsidiary, which is CG Semi.
Return on capital employed for quarter four was at 37%, and order intake for the quarter was INR 3,824 crore, which is 22% growth, and unexecuted backlog at the end of March was INR 10,631 crore. Full year performance for consolidated is the sales was at INR 9,909 crore, a growth of 23% year- over- year, PBT of 13.6% of sales, versus 14.1%. As I said, the margin impact is due to investment into CG Semi and Axiro Semiconductor, impact of about INR 22 crore, and the free cash flow generated for the year was INR 548 crore, and it was also driven by INR 173 crore CapEx done in the subsidiary, which is CG Semi. Return on capital employed for the year was 32.5%.
Order intake for the full year was INR 14,684 crore, which is 40% growth year- over- year, and the unexecuted order backlog as of 31st of March was INR 10,631 crore, which is 66% higher year- over- year. Some of the key events during the year we had is pursuant to the shareholders' agreement, share purchase agreement, and share subscription agreement. We entered into agreement with G.G.Tronics, which is called GGT, and the existing shareholder of GGT. CG acquired a controlling stake in GGT with effect from August 2024. That's the acquisition date. Through the combined purchase of equity shares and the compulsory convertible preferential shares for a total sum of INR 319.38 crore, resulting in GGT becoming a subsidiary of CG. Second, G.G.Tronics also as a company received a prestigious order towards the locomotive train collision avoidance system, which is called TCAS.
Also in India, we call it KAVACH, in the range of INR 500 crore-INR 600 crore, and the scope includes the supply, installation, testing, and commissioning of onboard KAVACH equipment, including annual maintenance contract for 11 years. CG Power also in the solution, also the semiconductor initial India Semiconductor Mission under the Ministry of Electronics and Information Technology, Government of India, and CG Semi Private Limited Company incorporated for setting up the OSAT facility, entered into the fiscal support agreement to avail the grant of subsidy towards the CapEx of up to INR 3,501 crore. The Board of Directors also approved a greenfield expansion of 45,000 MVA for power transformer capacity with an investment of about INR 712 crore, which we already declared.
This will increase overall capacity to 85,000 MVA by financial year 2027-2028, and this expansion is considered to be expected demand in the transformer industry, both in Gujarat State, also cater to the export market. CG also secured an order for supply and service of railway products towards the manufacture of Vande Bharat train sets by entering into a long-term supply agreement with Kinet Railway Solutions Limited and the service of the railway products, introducing propulsion kits and motors, transformers, and other items. As part of this agreement, this purchase value is between INR 400 crore-INR 450 crore for the supply, and this will be applicable for the first order of 10 Vande Bharat train sets. Apart from this purchase order, a separate 35-year service contract will also become a part of this agreement.
The company has declared an interim dividend of INR 199 crore, which is INR 1.3 per share on 18th of March 2025. The last one I have on this is that CG entered into a definitive agreement with Renesas Electronics America and other affiliate entities of Renesas Electronics Corporation for acquisition of radio frequency components business through one or more of the subsidiaries of CG, and CG has obtained approval from the Committee on Foreign Investment in the United States and other necessary regulations and the statutory approvals for acquisition. Subsequently, after year-end upon payment of contribution, CG has obtained control over the radio frequency components business from Renesas Electronics America Incorporated and the affiliate entities of Renesas Electronics Corporation. The audited financial statements with detailed notes are available as part of the stock exchange filing and the company website www.cgglobal.com.
Thank you for listening, and over to you, Renu, for Q&A.
Sure, we can open the session for Q&A.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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'll wait for a moment while the question queue assembles. The first question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Thank you very much for the opportunity, sir. My first question is on CapEx. I just wanted to check the status of our CapEx projects for power as well as distribution transformers. Have we finalized the line for the new 45,000 MVA capacity? Also, we were expanding this power transformer capacity at Bhopal location as well, from 17,000 MVA to 50,000 MVA. Is this expansion complete? Similarly, the status of the distribution transformer capacity expansion at Gwalior?
Super. Thanks for the question. Yes, I will answer the first one, and second, I can angle to Ajay to talk more details. The land for the new plot for 45,000 MVA, that land is almost allocated to us. It will be in Bhopal only. Some formalities have been done, so hopefully in the next couple of weeks, we should be done with that and start the construction. Regarding our capacity expansion in existing and distribution transformer, Ajay, just give a high-level indication on that.
Yes. Regarding the capacity expansion, it is in an advanced stage now. If we talk about the distribution transformers in Gwalior, some parts will become operational within the next two weeks, and the whole expansion for distribution transformers will be over by the end of June. For the power transformer expansion in Bhopal, from 17,000 MVA to 40,000 MVA, the winding shop is already operational, and the ovens will be getting operational within the next two weeks, and the whole plant will be operational by the middle of June.
Understood. Just a follow-up to that, we were also planning to commission additional HT motors capacity at Bhopal only by the end of FY 2025. Any status update on that?
Yeah, so I can pass it on to Indraneel to talk about HT capacity in Bhopal.
Yes, we are on track as per the plan, and that's exactly also resulting into, as Amar said, some of the results what we talked about. We are exactly at the plan.
Sure. My second question is on our railways business. We have garnered a very prestigious order from Kinet as well for the propulsion systems. At the beginning of FY 2025, we had guided for close to 40% revenue growth for our railways business in FY 2025. Have we achieved this kind of growth? Given a very strong order book, what would be our plans for the next couple of years? Would we be able to maintain this kind of very high growth momentum, or because of the high pace, the momentum could taper off a little bit? If you could give us some broad idea about the prospects of the railways business for the next two to three years, that will be very helpful.
Yeah, I think good question. You are seeing the momentum of that. Although we do not give specific guidance on specific businesses what will grow, but yes, the railway has grown in high double digits already, and with these prestigious orders, which the team is right now busy for the R&D and also the execution excellence team, they are working on that. If you tell me what is the plan for next two to three years, it is that we are playing between the domestic market, which is very, very important because we stay committed to Indian railways, and also we are exploring the export piece of it, which the team Chidambaram and team who is leading this business, they are actually busy building on the R&D capability for that. We still stay bullish on the railways business.
Understood. Thank you very much for answering my question, and all the very best.
Thank you. The next question is from the line of Ankur from HDFC Life . Please go ahead.
Yeah, hi sir. Good afternoon. Thanks for your time. I have three questions. First, on the industrial segment margins, and one of the things you mentioned is because of higher R&D prices, there's been some decline there. Could this help us? Have you taken price hikes? Are we planning some price hikes within the motor business to kind of offset that increase in R&D?
Yeah. So here's why, as you know, that for motor business, one of the raw materials is copper, and that has been not behaving very nicely. If you look at the indices, it's gone up substantially. Subject of it, yes, there's a disciplined way of balancing what can we pass on to the customer. Unfortunately, commodities is on the rising.
Ladies and gentlemen, we seem to have disconnected with the management. Please wait while we rejoin the management. Ladies and gentlemen, we have the management back online with us. We will continue the question and answer session. Please go ahead, sir.
Should we start continuing with the question that was asked?
Yes, sir. We have Mr. Ankur online.
Oh, okay.
Yeah, you can continue.
Okay, super. I was talking about motor business, as you know, the commodity copper is one of the key inputs for the motor manufacturing. Unfortunately, that has not been behaving well. There's inflation on that. On the other side, if you see IIP index for the last four quarters has been going down. If my numbers are right, from 6.3, it has gone down to 3.8. Also, the EMA data shows that the last two quarters have been declining. In fact, the last three quarters have been declining in terms of uptake of the motors. In spite of that, we have been able to balance that too. When I say balance that too, it means what? One is that we have been able to gain the market share by getting the right orders.
We have been able to pass on some bit of it, whatever inflation has happened due to the commodity, but not everything out of that. It is a balance game between the volumes and the margins.
Right. Okay. Since you also touched on demand, could you just help us? How are you seeing demand trends on the motor side as well?
Demand trend domestically is, if you go by the book, apple to apple comparison, it's not so great. The reason, if you see, even last quarter, our order bookings for motor has gone up. In fact, consecutively last two quarters, motor orders have been going up. It's a combination of a couple of initiatives that we have, and I talked about that in the last quarter as well. One is our go-to-market strategy on key account management domestically in India, as well as for our exports. Both of our leaders, Indraneel and Marais, they are working together to make sure we have the right products, which practically every quarter we are launching two to three new products, as well as the channel setup across a couple of countries where we see the potential.
Everything is happening in tandem, and that's what is showing us increase in the volumes in terms of orders, not really fully on the revenue right now.
Just a last question on the consumer business. You did mention that you are making investments to kind of scale that business up. If you could just talk about how big is it right now, what are the kind of targets you have in mind, how is that kind of shaping up as well? Thank you.
Today, as I said, we do not give that specific number of each of these businesses, but yes, even for the last year, it has grown pretty high double digits. The way we have put the expiration, and I will hand over to Sriram, who runs this business, to talk about top three things at high level, what we are doing to really scale up this business to different levels.
Yeah. Thank you. I think it's a great opportunity to share what is actually happening in the consumer front. The first is this year actually is starting a laying of foundation for this business, from building an organization structure, building the capabilities within, starting from a sales team to the backend operations to handling the right set of vendors. I think this year is actually going to be more of laying a foundation for a strong, sustainable growth for the future because we see this business having had a break of close to five years. We have to restart the entire engine by building a brand, building a strong go-to-market, and then building a strong backend structure. In the last six months, we have been partly successful in getting the organization in place and getting the backend in place.
We also managed to get a lot of good vendors on board. This year, we are also planning to enter into the second category. The two focus categories as of now for us is pump and fans, but you must have seen a couple of months ago, we have launched air coolers. We are also planning to get into water heaters in a much more aggressive fashion. You get to see building the innovation through innovation. These are the stuff which is actually planning to come up in the future. We see this business not from a current perspective, but looking at a long-term, next to five years perspective, we wanted to become at least the top five players in the electrical consumer durable sector. That's what we are aiming for.
Great. Got that. Thank you.
Thank you. Ladies and gentlemen, in order to ensure that the management is able to address all questions from all participants in the conference, please limit your questions to two per participant. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.
Yes, sir. Good afternoon, and thanks for the opportunity. My question is on the one significant order from Kinet. The price list mentions propulsion kit. What do you mean by the kit? Does it include only motors and transformers, or does it also include converters? Is it fair to assume that this INR 4.5 billion order will get consumed in FY 2026, and the new orders from the same customer can follow through?
Yes. I think, as I said, this is for 10 sets offset of Vande Bharat, and this is the beginning of it. Depending on successful execution of this, the way we'll begin, the more will follow. To double-click on what does propulsion system mean, I'll hand over to Chidambaram, who runs this business. Chidambaram, over to you.
Yeah. We signed a long-term agreement, which has eight years of supply, which is as per the MTSA given to TMH from Indian Railways. MTSA is Maintenance, Term, and Service Agreement, and there is 35 years of service that they have signed with Indian Railways. We got that back to back. All these orders we will be getting on an annual basis. First eight train sets should be supplied in the first year, for which we got the order for INR 400 crore. Subsequently, the next order will come with its own PVC, so it will keep coming for eight years. It will be a supply contract. As Amarji said, we will be doing the systems engineering. Everything from pantographs to the motors will remain part of our kit.
Understood. My second question is, how does the central government subsidize for the semiconductor project? Is it based on the milestones on which the government releases the money? Will the money come in tranches or will it come at the end of the project? What is the CapEx plan for semi in FY 2026?
Yeah. I'll pass it to Susheel who does the CFO to answer that.
In respect of your first question about how the money is coming from the government, it's based on the pari-passu. Hope you understand the meaning of pari-passu, right? It's not about that we invest the money coming in from the government. It's all about pari-passu. In case of the CapEx investment for CG Semi, we are thinking probably that the commissioning of this project will happen in the next couple of years, the entire commissioning of this project.
Understood. Thank you and all the best. Thank you.
Thank you.
Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead.
Yeah. Good evening, sir. My first question is on the power system segment. We've seen a very strong performance in FY 2025, both in terms of revenues and margins being at a record high at 21% in the fourth quarter. As we are booking new orders, what is the kind of margin profile that we see sustainable over a period of time? Within this also, if you can talk about the BTW acquisition, what is the status of that acquisition?
Yeah. On the power sector, I think we see the growth momentum continued. I keep talking about I do not see this demand going down, at least for the next four to five years, not only in India but globally as well. That is a very, very conservative estimate that I am talking about. When the demand is more than the supply, obviously you will have better margins reflecting on that. That is the answer to your first question, Bhoomika. The second one on the B TW, I think that is still under discussion with B TW because there are some end dates end of May or something before they can close the deal. Those transactional things are going on.
Okay. On the IS segment, you spoke about the market being weak and we are gaining market share. Would it be possible to call out market share numbers for LT and HT motors separately? We were working on several initiatives, particularly for HT, to kind of scale up the market share out there. What is the progress? How are we looking at further market share gains? If you can talk about that. Perhaps if I can just squeeze in one question on the semiconductor, we've seen a loss in the fourth quarter. What is that related to, given I think Renesas should start reflecting from the first quarter onwards? What should be the last number that we should look at? Is this something which is sustainable? If you can just give some color on that, please.
For the first question on a little bit on the market share, Indraneel, if you can answer that, and then I'll pick the semiconductor one.
If you look at the market or the EMA numbers, the market has grown by around 4%, and then we have significantly grown to the tune of 12%, which is taking us to overall domestic market share higher double-digit number. That is on the [ELAN] side. Obviously, as you will see, this quarter we have launched new series also to take advantage of increased capacity, and we will expand our footprint not only in domestic but also target the export market.
Any numbers for LT, HT, market share number?
I'm not sure whether we can have these specifics. Amar, any guidance?
Yeah. I think we don't need specifics on that, but generally on the and a low-tension motor is typically, you know, that we are the market leaders there. So there we are.
Right.
Okay.
If you look at in that sense, we have grown over last year's market share by around 200 basis points. Particularly, the good part is higher energy efficiency motors we have improved by around annualized basis of 450 basis points. That is the overall for the LT side. Even if we talk about quarter- on- quarter, that is around 200 basis point improvement.
Okay. Great.
Thanks, Indraneel. On the semiconductor piece, I do not know, Bhoomika, which way your question was, towards Axiro or was it towards CG Semi?
Sir, I mean, in the consolidated numbers, we see a loss of INR 14 crore for the quarter and INR 22 crore for the year. Just wanted to get a sense on what is that. From Renesas numbers, as we understand, will start coming in from Q1. Would that understanding be correct?
Yeah. That is basically, you see, both our businesses are new. These are more strategic investments. On that piece, which is CG Semi, that will be, obviously, it is running right now. I think the earliest, because there are two plants which are under manufacturing. One is a mini plant and the main plant. If my memory goes well with me, the mini plant should be operational by next financial year. Thereafter, subsequently, the main plant will come up. It will be at least a year or so till we see the production out of that because it is being set up right now. Axiro, yes, we just completed the acquisition. The team is in place. We inaugurated the office and the lab in Bangalore. That team is getting up to speed.
Hopefully, from next quarter or something, we'll see a bit of numbers on that. Again, that's more into design kind of activity. So that we'll see.
Understood. Great. I have more questions. I'll come back in the queue. Wishing you all the best. Thank you.
Thank you, Bhoomika.
Thank you. The next question is from the line of Rajesh Kothari from Alfa Accurate Advisors. Please go ahead.
Good afternoon, sir. My question is on this new OSAT project. Recently, what we've been reading in the press is that two projects, which are on the semiconductor side, are being kind of under review or there might be cancellation or they are reviewing whether to go ahead or not. The change in technology is probably impacting the decision-making on the semiconductor side. How do you see these two have any impact on your business? What are your views on the changing technology and how do you plan to cover on that?
See, from our point of view, I mean, news will keep floating, but we do not see anything of that sort. We are aggressively going about this. I mean, even in my pitch, I talked about the agreement we signed with ISM, which is India Semiconductor Mission, the Ministry. They agreed. In fact, out of all the companies, probably we are one of the first ones to reach that stage. The construction is in full swing. Our people are getting trained. In fact, the first batch just passed out after three months training in Malaysia. Everything is going at full swing. We are not distracted at all with any news.
Okay. Within the next three to five years perspective, the total kind of requirement and as per the mission, what are the requirements and the kind of capacities which are coming up? Can you give a little bit broad color on that? How do we see the overall competitive positioning on this, the number of projects which are coming up? From your perspective, how the industry should want to look at it and what kind of ROCE ultimately the company can make on this?
I think it is, I mean, your question is a little more broad. I can talk for three hours on the subject. At a high level, what I would say is right now is the investment phase. Also, Renesas being our partner, there's an offtake, I think something close to 40% or 50%. Whatever we manufacture here will be taken back by them. That takes care of it in the beginning itself. The second is also our sales team, business development is already getting in place. We are hiring for that, even though manufacturing is more than a year ahead. They already started reaching out to different OEMs to make sure that we are getting those inroads right in the beginning rather than waiting once we start manufacturing. Right now, I would say it's a completely in progress or in process phase.
Great. Thanks. We'll talk offline. Thank you, sir.
Yeah.
Thank you. The next question is from the line of Amit Mahawar from UBS. Please go ahead.
Thank you. Amar, is it possible for us to give details on fiscal 2025 orders on export versus domestic and if we can break it into industrial and power for greater clarity as well?
Hi, Amit. Unfortunately, we don't give so much of split to everybody. We generally talk about high-level segments. Overall, how much is split between domestic and export? Yes, that is possible. By segment, industrial and power, that's also possible.
Yeah. Overall export, Amar, fiscal 2025 would be great.
Do we have overall split on this?
Your question is from what point of view?
Order intake breakup between domestic and export?
It's very negligible numbers in the overall numbers. It's nothing.
For the export.
For the export side.
Yeah.
Okay. Okay. Sure. Our second question is more on the profitability of industrial. Now, we have a last piece which is non-rail. I understand fiscal 2025, we would have had a 30%-40% growth in railway revenues, which was due to execution of whole orders, which also impacted the margins. Even if I remove that, you are gaining share in higher nodes, which is like I3 also. If you can throw some light on the profitability of motors because if your growth is also happening in I3, I4, moving towards that, why is profitability not coming back in the motors next to railway on the industrial part?
If you see the profitability of motor, again, the point is if you look at last two quarters, it has actually started. There was a big impact about a year back. Q1, Q2, actually, it was going down and down. Then from Q3 onwards, we picked up. In fact, towards end of Q2, July, early September, we started making improvements not only in the go-to-market but also in the operations piece. That is what is probably showing up the results. Yes, as I said, last quarter also, we will go back to the margins where we were at. Yes, it's a step-by-step journey. Can you hear me?
Sure. Yeah, I can hear you.
Can you hear the call on?
Yeah, the call. I think we are recollecting the management.
Ladies and gentlemen, we have the management back online with us. Please go ahead, sir.
Okay. The same thing I was talking about is it's a combination, the split. Yeah. Motors will have some impact and become motors as well. Yeah. Any other question on that or?
Got it, Amar. Can I quickly have a quick one if you allow?
Okay.
Yeah. See, in light of recent trade direct negotiations, we want to review and revisit your export guidance of 20% that was set out. That's one of the questions.
No, it doesn't change anything because primarily those tariff issues that you have is on America and our exports to the U.S. is very negligible right now. Having said that, yes, the appetite is there. We are refining our three to four years plan, but it doesn't stop anything. Nothing changes on the export strategy.
Sure. Thank you, Amar, and good luck.
Thank you.
Thank you. The next question is from the line of Anupam Goswami from SUD Life . Please go ahead.
Hello, sir. Sir, my question is on the semiconductor segment that we have taken out separately. How do you see going forward what sort of expenses will be booked on this segment? When should we expect revenue coming?
That's what Amar said in the beginning that these are two pieces of this. One is that Axiro, which we recently did a complete acquisition side. We start looking at revenue from this quarter one onwards. We do not see any expenses coming on account of that piece. The OSAT piece, most of the expenses we usually kept tight because of the project. Only more about functional and admin costs would be coming on every quarter basis.
Okay. All right. Next question on the motor side. Now, you mentioned about muted IIP data and EMA data as well. How do we see it going forward? Do we see a little sluggish growth on this side or have we increased our capacity as well as capability to gain a higher market share and grow more than the market in there?
See, the market, I mean, obviously, we will not comment on that. Market is what market is. Important is how are we contributing to that. That's exactly we stay consistent in what we have performed in the last two quarters. We will continue our journey, which is getting market share gain. That's what our focus is.
Should we expect the same kind of growth that we've seen this year or the last two quarters?
We are not specific to a particular business, that I will not say. I mean, we have a projection for the year, and that's what we are working on to grow. Yeah, having said that, whether market grows or not, we still have the strategy we are working on will definitely give us incremental growth, a combination of domestic as well as exports.
Got it. Thank you, sir. Thank you very much.
Thank you.
Thank you. The next question is from the line of Ashwani Sharma from Emkay Global Financial Services Limited. Please go ahead.
Hi, sir. Thank you for the opportunity. Sir, just a bookkeeping question. In your initial remarks, you mentioned about some impact due to new investments, somewhere in the range of INR 15 crore-INR 20 crore. Can you confirm that number again, sir?
It is to go to the segmental reader which is reflecting separately. That is semiconductor loss which is coming around INR 15 crore.
That's all? Nothing else, right?
Nothing else, yeah. That is for the quarter four. For a full year basis, the number is INR 22 crore.
Okay. Yeah. Thank you very much, sir.
Thank you. The next question is from the line of Vasant Bansal from NVC Investment. Please go ahead.
Yeah. Good afternoon. Amar, as you said, that you cannot give guidance about the individual segments. Can you throw some light? How do you see your business growing in the next three years? Top line as well as the bottom line.
Yeah. As I said, individual is not there. But yes, each of the business verticals that we have within these two segments, we are already done with the annual operating plan, which means we are clear for this year which area, which segments, which will drive the growth, not only on the top line but also on the profitability. That is a combination of a couple of levers that you have. One is on what will you pass on to the market, and that we call top line margin expansion. We are very disciplined, getting very disciplined on that, number one. Number two is also operational excellence piece of it. How do we ensure that operationally we are able to eliminate as much waste in the system as possible because customers do not pay for that. That is how you become more and more efficient.
These strategies will continue to grow as we are progressing.
Can you give any number for top line?
Number for you mean the growth or what are you talking about?
Yeah. Yeah. Growth or top line growth.
It's a better number I won't be able to give, but yes, it's a high double digit.
Okay. Now, the second question is when I compare your segment results for this quarter results with the previous quarter. I see that in the previous quarter, for industrial segment, margin was 13.5%, and for this quarter, it is 11.2%. There is a drop of 1.3%. How do you see this margin trajectory going forward?
This can only go up from there. If you see, yes, versus previous year, same quarter, it has gone down. We have put the reasons also there. One is a commodity inflation, 100% of which was not able to pass on to the customer. There is a material, labor overhead productivity. That is what we are working on. Also opening up the door for new areas or the segments where we have not been present. That is where the team is busy right now to work on.
Yeah. It includes railway business, which you see growing at around 30%, 35%, 40%, and which is not very high margin business. Because I heard in your previous con call that you are sort of doing help to the nation by not charging them on higher credit. So the margin on your railway business will be of moderate nature. In view of that, would you be able to maintain 11%, 12%, 13% kind of margin on your industrial business segment?
Absolutely, Vasant. That's why I said in the beginning. It's a combination play of different businesses within the industrial vertical. When I'm talking about the strategic things that I talked about, which is getting executed, it's not only in one business, motors. It is for motors. It is for consumer products division. It is for railways. All the leaders are in sync with whatever strategy is. Because our size of business has become reasonably big, when the company is INR 10,000+ crore , obviously the processes and systems take over. That's what we are driving. We are pretty confident of hitting those numbers.
Thank you very much.
Thank you.
Thank you. The next question is from the line of Abhinav from ICICI Securities. Please go ahead.
Hi, sir. Thanks for the opportunity. My first question is on the order inflows. For the railways, can you comment, quantify what was the order inflow for FY 2025 and also any comment on the outlook? Secondly, for the motors, you mentioned that you saw strong order inflow for the quarter. Can you quantify the number for the quarter and the fiscal and also bifurcate in terms of high tension and low tension separately?
Yeah. Thanks, Abhinav. Unfortunately, we cannot share so many details by specific each of the businesses. Yeah. We generally stay with the segment.
Any comment on the outlook for railways?
The future is bright.
All right.
On the previous note, yes, as I said, and there was a previous question on the margin as well, railways. The strategy as I said is we are serious and committed for Indian railways, but yes, low focus. The team is busy on R&D for the exports market. We are getting there very, very aggressively. Since you talked about railways, we are probably one of the first companies who got certified by American Association of Railroads. To talk about some of the items, they are right now in American locomotives under testing. Three months have passed. I am sharing a little more detail than I should be just to make you comfortable. That is till now, absolutely no issues on that. That will flow through some of the orders that will come after this testing is completed.
Thanks for that, sir. The second question is, what will be the rationale behind acquiring Baoding? And what does that acquire?
Acquiring what?
Baoding, the Chinese company. Transformer.
Oh, BTW, you mean?
Sorry?
BTW.
Yeah. Yeah. What will that bring to the table?
Yeah. I think that is still not materialized because as I said to the earlier question, by end of May, we'll get to know whether that is happening or not happening because there are some regulatory issues, etc., getting decided. By chance, if it is coming, we will have very quickly almost 12,000 MVA-15,000 MVA capacity added, and we can restart the manufacturing. That adds over capacity immediately. That would be the advantage. It can always be scaled up.
Thank you, sir.
Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please go ahead.
Yeah. Thanks. Just wanted one clarification on this mini and the max CG semicon plant. Can you split it in terms of what is the kind of capacity or CapEx or some color on what do you mean by mini and when it's getting commissioned the next year? What percentage of CapEx will be done or capacity, etc., to just get some understanding?
Yeah. Bhoomika, I think that's a little longer answer. You will have to meet us separately to go through it. Yeah, because it's not a straightforward simple question to both questions.
Sure. Sure. And the last.
The good news is because this is the time of board meetings. We have the board meeting for Axiro. We have board meeting for CG Semi. The CEO of the business made the presentation. Both the projects are on track, which is a good news.
Understood. Just lastly, in terms of given that most of our capacities are now coming on stream or largely commissioned, what is the kind of CapEx that we'll see on our core business of power systems and IS?
Can you rephrase your question? In power systems related to what?
No. I was just asking what will be our annual CapEx for FY 2026 on our core CG business?
That will remain in the same range, Bhoomika, around INR 300+ crore .
Sorry to interrupt you, Bhoomika Ma'am, but I would request you to rejoin the question queue.
Thank you.
Thank you. The next question is from the line of Alok Ranjan from Millennium Partners. Please go ahead.
Yeah. Thank you. Just one clarification on this Renesas radio frequency component business which we have acquired. The annual revenue you mentioned in one of the recent investor presentations is that $56 million in CY 2023. What is the revenue number for this business in CY 2024? What kind of run rate can we expect from this business in FY 2026 for our company? What could be the margin for this business? Thanks.
Hi, Cecilia. I think for this year, we expect a similar kind of a revenue. And margins, we are really not talking too much at this point of time because this is just a planning phase. So the complete AOP and everything to be presented by the CEO will be in this business by next board meeting.
Will this be clubbed with the semiconductor segment, sir, in terms of the revenue and the EBIT margins?
Yes.
The design part?
Yes.
Okay. Got it. Thank you. That's all for me.
Thank you.
Thank you. As there are no further questions from the participants, I now hand the conference over to Ms. Renu Baid Pugalia from IIFL Capital for closing comments.
On behalf of IIFL, I would like to thank the management for giving us the opportunity to host this call. Sir, any closing comments from your side?
No. Thank you. Thank you so much for coming over and listening to us patiently. Always a pleasure to answer the questions. Talk to you very soon. Thank you.
Thank you.
On behalf of CG Power and Industrial Solutions, that concludes this conference. Thank you for joining us, and you may now disconnect your line.