Q1 2027 TD Power Systems Ltd Earnings Call

August 12, 2026

Speaker #1: Ladies and gentlemen, good day and welcome to the TD Power Systems Limited Q1 FY27 earnings conference call. Before we begin, I would like to point out that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as of the date of this call.

Operator: Ladies and gentlemen, good day and welcome to TD Power Systems Limited Q1 FY27 earnings conference call. Before we begin, I would like to point out that this conference call may contain forward-looking statements about the company, which are based on the beliefs, opinions, and expectations of the company as on date of this call. These statements are not the guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Nikhil Kumar, Managing Director of TD Power Systems Limited.

Speaker #1: These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes.

Speaker #1: Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touchtone phone. Please note that this conference is being recorded.

Speaker #1: I now hand the conference over to Mr. Nikhil Kumar, Managing Director of TD Power Systems Limited. Thank you, and over to you, Mr. Kumar.

Operator: Thank you, and over to you, Mr. Kumar.

Speaker #2: Good morning, and thank you for joining us on this call today to discuss the financial results of TD Power Systems Limited for the quarter ended 30th June 2026.

Nikhil Kumar: Good morning, and thank you for joining us on this call today to discuss the financial results of TD Power Systems Limited for the quarter ended 30 June 2026. I trust all of you would have received our results in investor presentation. Now I will start with, discuss with you the financial performance of TDPS for this quarter ended 30 June. Standalone. Our total income for Q1 on a standalone basis was INR 6.3 billion versus INR 3.63 billion over the same period in the previous year, an increase of 74%. EBITDA for the quarter is 19.34%, including other income, excluding exceptional and treasury income, versus 18.7% over the same period in the previous year. Profit after tax and comprehensive income for the quarter is INR 853 million, versus the profit of INR 471 million for the same period in the previous year, an increase of 81%.

Speaker #2: I trust all of you would have received our results and investor presentation. Now I'll start by discussing with you the financial performance of TDPS for this quarter ended 30th June.

Speaker #2: Standalone total income for Q1 was $6.3 billion, versus $3.63 billion over the same period in the previous year, an increase of 74%.

Speaker #2: EBITDA for the quarter is 19.34%, including other income (excluding exceptional and treasury income), versus 18.7% over the same period in the previous year. Profit after tax and comprehensive income for the quarter is ₹853 million, versus the profit of ₹471 million for the same period in the previous year, an increase of 81%.

Speaker #2: Order book for the manufacturing segment is ₹22.08 billion, out of which ₹19.29 billion is the generator and motor manufacturing business, ₹2.11 billion is railway business, spares and aftermarket is ₹0.22 billion, and ₹0.46 billion is the turnkey business.

Nikhil Kumar: Order book for the manufacturing segment is INR 22.08 billion, out of which INR 19.29 billion is the generator and motor manufacturing business, INR 2.11 billion is railway business, spares and aftermarket is INR 0.22 billion, and INR 0.46 billion is the turnkey business. Export and deemed export, excluding railway order for both domestic and exports is 57%. Order inflow statistics. Order inflow during the quarter is INR 7.34 billion, an increase of 87% on a Q1Q basis. Order inflow from direct and deemed exports is INR 6.84 billion compared to INR 2.57 billion. 93% of our quarterly order inflow is exports, while 7% is domestic. The consolidated or total consol performance for Q1 is sales of INR 6.43 billion versus INR 3.76 billion, an increase of 71%, and profit after tax and other comprehensive income for the quarter is INR 816 million versus the profit of INR 500 million, an increase of 72%.

Speaker #2: Export and deemed export excluding railway orders for both domestic and exports is 57%. Ordering source statistics: order inflow during the quarter is ₹7.34 billion, an increase of 87% on a Q1Q basis.

Speaker #2: Order inflow from direct and deemed exports is $6.84 billion, up to $2.57 billion. 93% of our quarterly order inflow is exports, while 7% is domestic.

Speaker #2: For consolidated, our total consolidated performance for Q1 is sales of $6.43 billion versus $3.76 billion, an increase of 71%, and profit after tax and other comprehensive income for the quarter is $816 million versus a profit of $500 million, an increase of 72%.

Speaker #2: We continue to maintain a strong cash position of $2.4 billion. Coming to the order book, market situation, and guidance—market conditions and guidance—in general, we see a very buoyant market for TDPS in all segments of business.

Nikhil Kumar: We continue to maintain a strong cash position of INR 2.4 billion. Coming to the order book, market situation, and guidance. Market conditions and guidance. In general, we see a very buoyant market for TDPS in all segments of business. The basic factors that are driving growth continue to play out. AI data centers, grid stabilization, basic power generation, push towards renewables, and the stressed demand for geothermal, hydro, waste to energy, et cetera. With all sectors in full force, we see strong order inflow, the strong order inflow situation continuing, and the focus is still heavily on execution. Despite differing views on the sustainability of this buoyancy in the media, the ground reality is that there is a tremendous shortage of power generation equipment, specifically in gas turbine, gas engines, transformers, and generators.

Speaker #2: The basic factors that are driving growth continue to play out: AI data centers, grid stabilization, basic power generation pushed toward renewables, and the stress demand for geothermal, hydro, waste-to-energy, etc.

Speaker #2: With all sectors in full force, we see strong order inflow. This strong order inflow situation is continuing, and the focus is still heavily on execution.

Speaker #2: Despite differing views on the sustainability of this buoyancy in the media, the ground reality is that there is a tremendous shortage of power generation equipment, specifically in gas turbines, gas engines, transformers, and generators.

Speaker #2: The forecast of demand at the moment is very strong, and TDPS is taking the position to maximize the order inflow. On the capacity side, we are focusing on efficiency as well as debottlenecking to increase the output for FY28.

Nikhil Kumar: The forecasts of demand at the moment are very strong, and TDPS is taking the position to maximize the order inflow. On the capacity side, we are focusing on efficiency as well as debottlenecking to increase output for FY28. We will most likely go in for another round of capacity addition for generators below 100 megawatt design. We will inform the market about these investments and plans in the next earnings call since we are still in the process of assessing which products and which capacities need to be enhanced. As mentioned above, at the moment we have sufficient capacity for FY28, around INR 22 billion. Although we will need some debottlenecking with investments around INR 500 million. Next, we are looking at what we should be doing for FY29 and FY30 to move the capacity to INR 40 billion and above.

Speaker #2: We will most likely go in for another round of capacity addition for generators below 100 megawatts, based on the TDPS design. We’ll inform the market about these investments and plans in the next earnings call, since we are still in the process of assessing which products and which capacities need to be enhanced.

Speaker #2: As mentioned above, at the moment we have sufficient capacity for FY28, around ₹32 billion. And we will, although, need some debottlenecking with investments of around ₹500 million.

Speaker #2: Next, we're looking at what we should be doing for FY29 and FY30 to move the capacity to ₹40 billion and above. Regarding the opportunity in the large generator segment, we are close to signing agreements with the relevant parties.

Nikhil Kumar: Regarding the opportunity in the large generator segment, we are close to signing agreements with the relevant parties, and we will inform the market most probably in the month of August about these unique opportunities. These opportunities are over and above the current business of the company, which is generators below 100 megawatt. Now that we come to the segments one by one. The steam turbine market continues to grow at the rate we predicted, with no surprises on the upside or downside. The market is steady with around 10% to 12% growth taking place in the captive power plant business, biomass, and waste heat recovery. Gas engines and gas turbines. This growth still continues to be massive and rolls on without pause. As mentioned in the investor presentation, we are getting large volume orders and forecasts for next year continue to show strong upward growth.

Speaker #2: And we will inform the market probably in the month of August about these unique opportunities. These opportunities are over and above the current business of the company, which is generators below 100 megawatts.

Speaker #2: Now, let me come to the segments one by one. The steam turbine market continues to grow at the rate we predicted, with no surprises on the upside or downside.

Speaker #2: The market is steady with around 10% to 12% growth taking place in the capital power plant business—biomass, electricity recovery, gas engines, and gas turbines. This growth still continues to be massive and rolls on without pause.

Speaker #2: As mentioned in the investor presentation, we're getting large volume orders, and forecasts for the next year continue to show strong upward growth. Hydro, we have a busy year ahead of us.

Nikhil Kumar: Hydro, we have a busy year ahead of us. This year will be one of the highest for TDPS in Hydro. TDPS is very active in the refurbishment business in India and abroad. This segment will result in some high-value orders for TDPS in this quarter. Motors remains a key area of our business and teams are working on increasing the footprint. In railways, we are not taking any fresh orders in this segment, and we will review the sustainability of this segment at the end of this year. Once the Indian railway contract is completed, the production space and capacity that we have will be used for generator and motor products. Guidance. We revise our guidance for FY27 at INR 2,600 crore with a small chance that we may even cross this number. This brings me to the end of my initial remarks.

Speaker #2: This year will be one of the highest for TDPS in hydro. TDPS is very active in the refurbishment business in India and abroad. This segment will result in some high-value orders for TDPS in this quarter.

Speaker #2: Motors, it remains to be an area of our business, and teams are working on increasing the footprint. In railways, we're not taking any fresh orders in this segment, and we will review the sustainability of this segment at the end of this year.

Speaker #2: Once the Indian Railway contract is completed, the production space and capacities that we have will be used for generator and motor products. Regarding guidance, we revise our guidance for FY27 to ₹2,600 crore.

Speaker #2: With a small chance that we may even cross this number. This brings me to the end of my initial remarks. I will now be happy to address any queries that you may have.

Nikhil Kumar: I will now be happy to address any queries that you may have. Thank you.

Speaker #2: Thank you.

Speaker #1: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone.

Operator: Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Mohit Surana with Monarch Networth Capital. Please go ahead.

Speaker #1: 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.

Speaker #1: Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes to the line of Mohit Surana with Munat Network Capital.

Speaker #1: Please go ahead.

Speaker #3: First of all, congratulations on the great set of numbers. You continue to outperform the street's expectations. My first question is with respect to the peak revenue potential.

Mohit Surana: Sir, first of all, congratulations on the great set of numbers. You continue to outwit the street expectations. My first question is with respect to the peak revenue potential without incurring any new growth CapEx. Last time you mentioned we can reach somewhere around INR 3,000 crores of top line. At this point, do you think we can exceed that using our current base? That is my first question.

Speaker #3: Without incurring any new growth capex, last time you mentioned we can reach somewhere around ₹3,000 crores of top line. At this point, do you think we can exceed that using our current base?

Speaker #3: That's my first question.

Speaker #2: Yes. I mean, I would rather look at it as how we are gearing up to meet the demands of the market, and matching our capacities on a year-on-year basis with the expected demands from the market.

Nikhil Kumar: I would rather look at it how we are gearing up to meet the demands of the market and matching our capacities on a year-on-year basis with the expected demand from the market. As I mentioned in my earnings call speech a few minutes ago, we are building our capacity with some debottlenecking for 32 billion next year. That is the capacity we would like to have, plus, minus. Then we certainly need to make another round of capacity additions for FY29 and 30. Then we will be looking at how do we create the capacities for beyond 40 billion. For that, we said that we would provide more details in the next earnings call. This is the direction in which we are going in right now.

Speaker #2: So, as I mentioned in my earlier first speech a few minutes ago, we expect we are building our capacity with some debottlenecking for $32 billion next year.

Speaker #2: That's the capacity we would like to have, plus or minus. And then we certainly need to make another round of capacity additions for FY29 and FY30.

Speaker #2: And that would then we'll be looking at how do we create the capacities for beyond 40 billion. But for that, we would we said that we would provide more details in the next earnings call.

Speaker #2: But this is the direction in which we are going right now, and we need to be careful about which products, which capacity, and what kind of capacities.

Nikhil Kumar: We need to be careful about which products, which capacity, what kind of capacity, how to make them fungible across different businesses that we have. There is a lot of analysis going on right now. We need another 3 months time to finalize our plans. As I said, this is the direction in which we are going. We are aligning our capacities with the market demand.

Speaker #2: How to make them fungible across different businesses that we have, and so there is a lot of detailed analysis going on right now. We need another three months' time to finalize our plans.

Speaker #2: But as I said, this is the direction in which we are going, and we are aligning our capacities with the market demand.

Speaker #3: Understood, sir. So just one more follow-up question. Regarding the larger capacity generator manufacturing, could you give us some understanding of the size of this market—say, for generators above 100 megawatts—compared to the market we are currently serving, which is for generators below 100 megawatts?

Mohit Surana: Understood, sir. Sir, just one more question as a follow-up. The larger capacity generator manufacturing, can you give us some understanding of the TAM of this market, say, beyond 100 megawatt compared to what we are currently below 100 megawatt? How big is that compared to the current segment that we are in currently?

Speaker #3: So, I mean, just in case—I mean, how big is that compared to the current segment that we are in currently?

Speaker #2: No, it's a very large segment. I mean, I don't have the exact market size information with me, but it's a very large segment. It's dominated by large players.

Nikhil Kumar: Well, it is a very large segment. I do not have the exact market size information with me, but it is a very large segment. It is dominated by very large players, and I cannot give you any further information right now. As I said during the earnings call speech, we will be announcing something in the month of August. Once we make the announcement, obviously, at that time, I will have to answer all these questions, and then once the details of the things are out in the market, we will definitely provide more information.

Speaker #2: And I can't give you any further information right now. As I said in the earnings call speech, we will be announcing something in the month of August.

Speaker #2: And once we make the announcements, obviously at that time I will have to answer all these questions, and then, once the details of these things are out in the market, we'll definitely provide more information.

Speaker #3: Understood, sir. Thank you so much. That's all from my end.

Mohit Surana: Understood, sir. Thank you so much. That is all from my end.

Speaker #1: Thank you. A reminder to all participants: you may press star and one to ask a question. The next question comes from the line of Nishita with Sapphire Capital.

Operator: Thank you. A reminder to all the participants, dial number star and 1 to ask a question. Next question comes from the line of Nishita with Sapphire Capital. Please go ahead.

Speaker #1: Please go ahead.

Speaker #4: Yes. Hello. Am I audible?

[Analyst] (Sapphire Capital): Yes. Hello, am I audible?

Speaker #2: Yes, Nishita.

Nikhil Kumar: Yes, Nishita.

Speaker #4: Yeah, so my question is on the order book. So we've booked growth in Q1. I just wanted to understand, what will our closing order book look like?

[Analyst] (Sapphire Capital): Yeah. My question is on the order book. We have had a very good order book growth year-over-year in Q1. Just wanted to understand, what will our closing order book look like. What sort of growth can we expect in the order book for the full year?

Speaker #4: What sort of growth can we expect in the order book for the full year?

Speaker #2: Yes, we are expecting around ₹700 crore per quarter.

Nikhil Kumar: Yeah. We are expecting around INR 700 crores per quarter.

Speaker #4: Okay.

Speaker #2: So, yeah, something like ₹2,800 crore plus we'll have for the whole year’s ordering flow.

[Analyst] (Sapphire Capital): Okay.

Nikhil Kumar: So this will be somewhere between

[Analyst] (Sapphire Capital): 700 crores of order inflow.

Nikhil Kumar: Yeah, something like INR 2,800 crores plus we will have for the whole year, order inflow.

Speaker #4: Okay, understood. My next question is: earlier you mentioned that by doing the debottlenecking, which will require capex of around ₹100 crore, we can reach a revenue potential of ₹3,200 crore in FY28.

[Analyst] (Sapphire Capital): Okay, understood. My next question is on that earlier you had mentioned that by doing the debottlenecking, which will require CapEx of around INR 100 crores

[Analyst] (Sapphire Capital): you can reach the revenue potential of INR 32 billion in FY28.

Speaker #2: Yeah.

Nikhil Kumar: Yeah.

Speaker #4: So, when do we expect to incur this capex? Have you already started the capex?

[Analyst] (Sapphire Capital): When do we expect to incur this CapEx? Have you already started the CapEx or?

Speaker #2: Yeah, that is all. That's an ongoing process.

Nikhil Kumar: Yeah, that's an ongoing process.

Speaker #4: Okay, so what sort of total capex do we anticipate in FY27?

[Analyst] (Sapphire Capital): Okay, what sort of total CapEx do we anticipate in FY27?

Nikhil Kumar: INR 50 crores.

Speaker #2: 50 crores.

Speaker #4: 50 crores. Okay. And with this debottlenecking, do we expect that in FY28 we’ll have around 32 billion of revenue, or can we see some upside potential to that as well?

[Analyst] (Sapphire Capital): INR 50 crores. Okay. With this debottleneck, do we expect in FY28 we will have around INR 32 billion of revenue, or can we see some upside or potential to that also?

Speaker #2: Yeah, I mean, it's not a hard-and-fast number. There is an upside potential; we will have to find ways to make it happen.

Nikhil Kumar: Yeah. It is not a hard and fast number. If there is an upside potential, we will have to find ways to make it happen, and we will make it happen. So, it is not written in stone that it is INR 3,200, and it ends over there. If it goes to INR 3,300, then we do INR 3,300. If it goes to INR 3,400, we do INR 3,400. But it is around that number.

Speaker #2: And we'll make it happen. So it's not written in stone that it is 3,200 and it ends over there. If it goes to 3,300, then we do 3,300.

Speaker #2: If it goes to 3,400, we do 3,400. But it's around that number.

Speaker #4: Okay, okay. Understood. And my last question would be: you mentioned that in FY29 we'll do fresh capacity expansion, which will take our capacities to around 40 billion.

[Analyst] (Sapphire Capital): Okay. Understood. My last question will be on, you mentioned that in FY29 we will do fresh capacity expansion, which will take our capacities to around INR 40 billion. So, do we expect when can we reach that INR 40 billion number?

Speaker #4: So, do we expect—when can we reach that $40 billion number? Are we going to start the...

Nikhil Kumar: Look-

[Analyst] (Sapphire Capital): Are we going to start the

Nikhil Kumar: Nishita, I've tried to make this as simple and clear as possible. I've said that we are going to invest INR 50 crores to have a capacity around 32 billion for FY28. And I've said that in 3 months' time, when we have the next earnings call, we will give an indication of what kind of investments we need to gear up for to meet the demand for FY29 and FY30.

Speaker #2: I've tried to make this as simple and clear as possible. So, I said that we are going to invest ₹50 crore to have a capacity of around 32 billion for FY28.

Speaker #2: And I've said that in three months' time, when we have the next earnings call, we will give an indication of what kind of investments we need to gear up for, to meet the demand for FY29 and FY30.

Speaker #2: Which could be, so we would be looking at taking the number to around 40-plus. Now, which specific year this is going to happen, I can't say that right now.

[Analyst] (Sapphire Capital): Okay.

Nikhil Kumar: Which could be, we would be looking at taking the number to around 40 plus. Which specific year it's going to happen, I can't say that right now.

Speaker #2: But that's the direction in which we are going. We can't write everything—it's a dynamic situation. We're looking at things which are going to happen two, three years from now, right?

[Analyst] (Sapphire Capital): Okay.

Nikhil Kumar: But that's the direction in which we are going in.

[Analyst] (Sapphire Capital): Understood. Yeah.

Nikhil Kumar: We can't write everything. It's a dynamic situation. We're looking at things which are going to happen 2, 3 years from now. So we have to have flexibility in the plan, and so we have to be open to see how the market develops, which kind of products are going to be dominating the demand situation, align ourselves to that, and be flexible. Nothing can be written in stone about what's going to happen in 2029 and 2030 in FY26. That's not how it works.

Speaker #2: So, we have to have flexibility in the plans. We have to be open to see how the market develops, which kind of products are going to be dominating the demand situation, align ourselves to that, and be flexible.

Speaker #2: Nothing can be written in stone about what's going to happen in '29 and '30 from where we stand in '26. That's not how it works.

Speaker #4: Okay, understood. Yeah, thank you, sir.

[Analyst] (Sapphire Capital): Okay, understood. Yes. Thank you, sir.

Nikhil Kumar: Yeah. Thank you.

Speaker #2: Yeah, thank you.

Speaker #1: Thank you. A reminder to all the participants that you may press star and one to ask a question. The next question comes from the line of Somil Chain with Lucky.

Operator: Thank you. A reminder to all the participants, dial number star and 1 to ask a question. Next question comes from the line of Somil Jain with Lakki. Please go ahead.

Speaker #1: Please go ahead.

Speaker #5: Hi, thanks for the opportunity, and congratulations on a very strong performance. Sir, I wanted to understand—you spoke about a price increase last quarter. Have those been put in place this quarter already?

Somil Jain: Hi. Thanks for the opportunity, and congrats on a very strong performance. Sir, I wanted to understand, you spoke about pricing increase last quarter. Have those been put in place this quarter already?

Soumil Jain: Hi. Thanks for the opportunity, and congrats on a very strong performance. Sir, I wanted to understand, you spoke about pricing increase last quarter. Have those been put in place this quarter already?

Speaker #2: We have contracts with our customers where we have price variation clauses, and wherever we have price variation clauses, those have been implemented, yes.

Nikhil Kumar: We have contracts with our customers where we have price variation clauses, and wherever we have price variation clauses, those are implemented, yes.

Speaker #5: Okay. Okay. So last quarter's gross margin I mean, if we improvement from last quarter's gross margin, that is reflective of the pricing uptake that the or the price clauses that you're talking about, right?

Somil Jain: Okay. Last quarter's gross margin, we see improvement from last quarter's gross margin. That is reflective of the pricing uptick that, or the price clauses that you're talking about, right?

Soumil Jain: Okay. Last quarter's gross margin, we see improvement from last quarter's gross margin. That is reflective of the pricing uptick that, or the price clauses that you're talking about, right?

Speaker #2: Look, I can't tell you. We have basic guidance. In the last call, we said that we will maintain our guidance, approximately plus or minus 1% here and there.

Nikhil Kumar: Look, I can't tell you. We have guided in the last call that we will maintain our approximately plus minus 1% here and there. We'll maintain the gross contribution margin for the company. Part of it will come from price increases, part of it will come from cost reductions, part of it will come from product mix, part of it will come from exchange rate gains. I can't give you the exact breakup of how much is the contributing factor from each of these things. But overall, the company will be able to maintain plus minus within a certain tolerable range, the gross contribution margin which we have guided the market.

Speaker #2: We'll maintain the gross contribution margin for the company. Part of it will come from price increases, and part of it will come from cost reductions.

Speaker #2: Part of it will come from product mix. Part of it will come from exchange rate gains. So, I can't give you the exact breakdown of how much each of these factors is contributing.

Speaker #2: But overall, the company will be able to maintain, plus or minus within a certain tolerable range, the gross contribution margin which we have guided the market.

Speaker #5: Understood. Okay. On the revenue guidance for the full year, does that include any revenue from large turbine generators?

Somil Jain: Understood. Okay. On the revenue guidance for the full year, does that include any revenue from large turbine generators?

Soumil Jain: Understood. Okay. On the revenue guidance for the full year, does that include any revenue from large turbine generators?

Speaker #2: No.

Nikhil Kumar: No.

Speaker #5: Okay. Okay.

Somil Jain: Okay.

Soumil Jain: Okay.

Nikhil Kumar: Just for your information, it takes between 18 to 20 months to make a large generator like that, okay? There's no way it's going to happen in 6 months from now.

Speaker #2: Just for your information, it takes about 18 to 20 months to make a large generator like that, okay? So there's no way it's going to happen.

Speaker #2: Yeah, in six months from now.

Somil Jain: Got it. All right. That's all the questions that I have for now. Thank you so much.

Soumil Jain: Got it. All right. That's all the questions that I have for now. Thank you so much.

Speaker #5: Got it. All right. That's all the questions that I have for now. Thank you so much.

Operator: Thank you. Next question comes from the line of Kajal Gupta with ASK Wealth Advisors. Please go ahead.

Speaker #1: Thank you. Next question comes from the line of Ghazal Gupta, to ask wealth advisors. Please go ahead.

Kajal Gupta: Hi, Nikhil and team. Thanks a lot for taking my question. Firstly, congratulations on good set of numbers. I just have one question on the margins front. We have always guided for 18% to 19% EBITDA margin, and in such a global situation as well. Firstly, I wanted to understand how we are able to manage and maintain our margins. As I understand that there would be some impact which would be coming from the increase in logistic costs, et cetera, which is probably getting offset by higher margin export orders. What would be the quantum of these two? Just wanted to understand that if the situation improves, can we expect any inch up on the margin front? That is my question.

Speaker #6: Hi. Hi, Nikhil and team. Thanks a lot for taking my question. Firstly, congratulations on a good set of numbers. I just have one question on the margin front.

Speaker #6: So, we have always guided for an 18 to 19% EBITDA margin. In such a global situation as well, firstly, I wanted to understand how we are able to manage and maintain our margins.

Speaker #6: As I understand that there would be some impact which would be coming from the increase in logistic cost, etc., which is probably getting offset by higher margin export orders.

Speaker #6: So, what would be the quantum of these two? I just wanted to understand, if the situation improves, can we expect any increase on the margin front?

Speaker #6: So that is my question.

Speaker #2: I cannot commit to any range, and we stick to the range. How we get there, I've already kind of answered in the last question.

Nikhil Kumar: I cannot commit to that. I can commit to the range and we stick to it. How we do it, I have already kind of answered in the last question. There are a number of factors that drive margins. One is pricing, one is cost reductions, one is exchange rates, raw material prices. Then there is also EBITDA margins, also dependent on the factory loading capacity utilization. There are a number of factors that drive this, and as a management, we need to have certain levers that we can work on to achieve the numbers that we commit to the market. How much of it is going to contribute to each of these things? I am sorry, I am not in a good position to answer that.

Speaker #2: There are a number of factors that drive margins. One is pricing, another is cost reductions, and another is exchange rates. Raw material prices are also a factor. Additionally, EBITDA margin is dependent on factory loading and capacity utilization.

Speaker #2: So there are a number of factors that drive this. And as a management, we need to we need to have certain levers that we can work on to achieve the numbers that we commit to the market.

Speaker #2: Now, how much of it is going to contribute to each of these things? I'm sorry, I'm not in a good position to answer that.

Speaker #6: Sure. Sure, Nikhil. That was all from my side.

Kajal Gupta: Sure, Nikhil. That was all from my side.

Speaker #2: Thank you. Thank you.

Nikhil Kumar: Thank you.

Speaker #5: Thank you.

Speaker #1: Thank you. Next question comes from the line of Alisha Mahavla with Trust Mutual Fund. Please go ahead.

Kajal Gupta: Thank you.

Operator: Thank you. Next question comes from the line of Alisha Mahawla with TRUST Mutual Fund. Please go ahead.

Speaker #6: Hi Nikhil, good morning. Congratulations on a great set of numbers. I just wanted to refer to something you mentioned in the opening commentary—that while demand is exceedingly buoyant, on the ground, there is a shortage of power equipment and there are some delays.

Alisha Mahawla: Hi, Nikhil. Good morning. Congratulations on great set of numbers. Just wanted to refer to something you mentioned in the opening commentary, that while demand is exceedingly buoyant, on ground, there is shortage of power equipment and there are some delays. Also, considering the current geopolitical issues, there is a little bit of supply chain disruption. Are we seeing the impact of that in any segment, any market, and any steps you are taking to ensure that it does not derail us? While you are sounding very confident to achieve the guidance, it would be helpful to get some qualitative color also.

Speaker #6: Also, considering the current geopolitical issues, there is a little bit of supply chain disruption. So, are we seeing the impact of that in any segment, any market, and are there any steps we're taking to ensure that it doesn't derail us?

Speaker #6: While you're sounding very confident about achieving the guidance, it's really helpful to get some qualitative color as well.

Speaker #2: Yeah, we don't see any disruption in our order inflow from the market side. Also, we see no letup in the demand situation.

Nikhil Kumar: We don't see any disruption in our order inflow from the market side. Also, we see no letup in the demand situation. The forecast that we have from our customers is still extraordinarily strong, continues to be so. We are always in very close contact with all our customers, since there's huge amounts of co-dependency that we have with each other. So it's very important that we stay very deeply connected with them. Deliveries and capacities is always the number one and number two topics on the agenda when we meet these customers. At the moment, whatever guidances that I have provided to the market are guidances that we will be able to achieve. Upside potentials or whatever will be announced as and when we see that actually materializing. I have not yet given the guidance for next year, for FY28.

Speaker #2: The forecast that we have from our customers is still extraordinarily strong and continues to be so. We are always in very, very close contact with all our customers, since there's a huge amount of co-dependency that we have with each other.

Speaker #2: So it's very important that we stay very deeply connected with them. And deliveries and capacities are always the number one and number two topics on the agenda when we meet these customers.

Speaker #2: At the moment, whatever guidance I have provided to the market are guidances that we will be able to achieve. Any upside potentials or adjustments will be announced as and when we see them actually materializing.

Speaker #2: So I have not yet given the guidance for next year, for FY28. I've only said we're building up a capacity for that. And I've not yet given the guidance for FY29 and FY30.

Nikhil Kumar: I've only said we're building up a capacity for that. I've not yet given the guidance for FY29 and 30. I've only said we're building up the capacity in that direction. I think when we take certain decisions to add capacity and when we gear ourselves up towards certain capacity numbers, it provides an indication of which direction we're going in. I think more than that, I can't really say.

Speaker #2: I've only said we're building up a capacity in that direction. But I think when we take certain decisions to add capacity and when we gear ourselves up towards a certain capacity number, it provides an indication of which direction we're going in.

Speaker #2: I think, beyond that, I can't really say.

Alisha Mahawla: No segment or order is probably facing any kind of slowdown because of this shortage or because of shipping related delays?

Speaker #6: Is any segment or order probably facing any kind of slowdown because of this shortage, or because of shipping-related delays?

Alisha Mahawla: No segment or order is probably facing any kind of slowdown because of this shortage or because of shipping related delays?

Speaker #2: No, I don't think.

Nikhil Kumar: No, I don't think.

Speaker #6: Because there are shortages.

Alisha Mahawla: Because there are projects

Speaker #2: I don't think shipping delays will cause disruptions in the demand situation, so no.

Nikhil Kumar: I don't think the shipping delays will cause disruptions in the demand situation.

Alisha Mahawla: No. The question is that while the demand is there, and I think you have spoken extensively about it, there is delay in execution. On-ground projects are getting delayed. What I am trying to understand is, are we seeing a slowdown from an execution perspective in any of our segments, in any of our markets?

Speaker #6: No. The question is that while the demand is there, and I think we've spoken extensively about it, there is a delay in execution on the ground. Projects are getting delayed.

Speaker #6: What I'm trying to understand is, are they seeing a slowdown from an execution perspective in any of our segments, in any of our markets?

Speaker #2: All our customers and all our products are just going straight from our factory gate, straight onto ships and getting moving to the US. Now, they may not be—they may not be commissioned immediately.

Nikhil Kumar: All our products are just going straight from our factory gate, straight onto ships, and going to the US. They may not be commissioned immediately. There could be execution delays. But all customers are taking the products as ordered.

Speaker #2: There could be execution delays, but all customers are taking the products as ordered.

Speaker #6: Okay. Understood. Great. Thanks.

Alisha Mahawla: Okay. Understood. Great. Thanks.

Speaker #2: It's not that all the generators or all the turbines or all the engines are going to only one single customer, one single project, who is not able to digest, and then he then starts holding, asking us to start holding back shipments because he's not—these are going to multiple sites, multiple data centers, multiple customers.

Nikhil Kumar: It is not that all the generators or all the turbines or all the engines are going into only one single customer, one single project who is not able to digest. Then he starts asking us to start holding back shipments because he is not. These are going to multiple sites, multiple data centers, multiple customers, and everyone is taking delivery. I do not see a problem with this at the moment. We move on to the next question.

Speaker #2: And everyone is taking delivery. I don't see a problem with this at the moment. Let's move on to the next question.

Speaker #1: Ms. Mahavla, are you done with the question? Thank you. The next question comes from Kunal with 361 Capital. Please go ahead.

Operator: Ms. Mahabala, are you done with your question?

Alisha Mahawla: Yes. Thank you.

Operator: Thank you. Next question comes on the line of Kunal with 360One Capital. Please go ahead.

Speaker #3: Yeah. Hi, sir. Thank you for the opportunity. So, my first question is: Would you be able to share, out of the current order book, how much actually is contributed by data centers for both gas engines and gas turbines?

[Analyst] (360One Capital): Yeah. Hi, sir. Thanks for the opportunity. My first question is, would you be able to share, out of the current order book, how much actually is contributed by data centers for both gas engines and gas turbines?

[Analyst] (360 ONE Capital): Yeah. Hi, sir. Thanks for the opportunity. My first question is, would you be able to share, out of the current order book, how much actually is contributed by data centers for both gas engines and gas turbines?

Speaker #2: No, we don't use that, nor do we give that split-up of applications with our ordering flows.

Nikhil Kumar: No, we don't give the split up of applications with our order inflows.

Speaker #3: Okay, sure. My second question is: as data center campuses move to higher 50 or 100 megawatt kind of configurations, are you seeing customers increasingly talking about combined cycles?

[Analyst] (360One Capital): Okay. Leave it at that. Sure. My second question is around, as data center emphasis move to higher 50, 100 megawatt kind of a configuration, are you seeing customers increasingly talking about combined cycles? If yes, does that meaningfully increase the TAM for TD Power?

[Analyst] (360 ONE Capital): Okay. Leave it at that. Sure. My second question is around, as data center emphasis move to higher 50, 100 megawatt kind of a configuration, are you seeing customers increasingly talking about combined cycles? If yes, does that meaningfully increase the TAM for TD Power?

Speaker #3: And if yes, does that meaningfully increase their time for TD Power?

Speaker #2: There are noises about combined cycles, for sure. And I think there will come a point in time when all these open-cycle gas turbines will start moving towards combined cycle.

Nikhil Kumar: There are noises about combined cycle, for sure. I think there will come a point of time when all these open cycle gas turbines will start moving towards combined cycle. But, as Alisha pointed out a little bit earlier, there are execution delays on the data center side. So, by the time that these projects actually go on stream and projects running with open cycle, then they start planning combined cycle, then it gets installed. It could be years from now. It will happen, but my opinion, it is not going to happen immediately. It is going to take some time. But it is going to happen.

Speaker #2: But as Alisha pointed out a little bit earlier, there are execution delays on the data center side. So by the time these projects actually go on stream, and projects are running with open cycle, then they start planning combined cycle, and then it gets installed, it could be years from now.

Speaker #2: It will happen. But my opinion is, it's not going to happen immediately. It's going to take some time, but it's going to happen.

Speaker #3: Sure. And even when that happens, is it correct to understand that this will improve the opportunity size for TD Power?

[Analyst] (360One Capital): Sure. Even when that happens, is the understanding correct that that will improve the opportunity size for TD Power?

[Analyst] (360 ONE Capital): Sure. Even when that happens, is the understanding correct that that will improve the opportunity size for TD Power?

Nikhil Kumar: Yeah, naturally. We work with all the major steam turbine companies in the world, so we are well connected with them. We will get a certain proportion of that business, for sure.

Speaker #2: Yeah, naturally. I mean, we work with all the major steam turbine companies in the world, so we are well connected with them, and we will get a certain proportion of that business for sure.

Speaker #3: Sure. Thank you so much.

[Analyst] (360One Capital): Sure. Thank you so much.

[Analyst] (360 ONE Capital): Sure. Thank you so much.

Speaker #1: Thank you. Next question comes from the line of Maithili Balakrishnan with Alchemy Capital Management Private Limited. Please go ahead.

Operator: Thank you. Next question comes from the line of Mythili Balakrishnan with Alchemy Capital Management Private Limited. Please go ahead.

Speaker #6: Thank you for the opportunity. I just wanted to get a sense of the market share which we now command in the export market. How much have we increased our wallet share with our OEM customer?

Mythili Balakrishnan: Thank you for the opportunity. I just wanted to get a sense of the market share which we now command in the export market. How much have we increased our wallet share with our OEM customers? Also, any client additions or anything else that you want to point out in that direction?

Speaker #6: And also, any client additions or anything else that you want to point out in that direction?

Nikhil Kumar: Yeah, Maithili, we don't have that number where we can pinpoint that this is our market share. We don't have that number.

Speaker #2: Yeah, Maithili, we don't have that number where we can pinpoint that this is our market share. We don't have that number.

Speaker #6: And in terms of client addition?

Mythili Balakrishnan: In terms of client addition?

Speaker #2: We don't have any major client additions at the moment. We have a couple of smaller client additions in the pipeline, which we are hopeful to close in this quarter.

Nikhil Kumar: We don't have any major client addition at the moment. We have a couple of smaller client additions within the pipeline, which we are hopeful to close in this quarter. All the major clients, major engine makers, major turbine makers, we're already working with them very closely. We don't see a big opportunity to increase client addition, which can dramatically change the business outlook. It's more about cutting deeper with them and more about the market itself having been growing. That's where our biggest opportunity is going to be.

Speaker #2: And now, of course, all the major clients, major engine makers, major turbine makers—we’re already working with them very closely. So we don’t see a big opportunity to increase client addition which can dramatically change the business outlook.

Speaker #2: It's more about cutting deeper with them, and more about the market itself growing. So that's where our biggest opportunity is going to be.

Speaker #6: Got it. And in terms of the Turkey subsidiary, could you just indicate what the thought process on it is currently? And what are we going to do about it?

Mythili Balakrishnan: Got it. In terms of the Turkey subsidiary, could you just indicate what is our thought process on it currently, and what are we going to do about it in the-

Speaker #2: Yeah, we have about three, three and a half million euros worth of orders for execution this year. And we will execute that three and a half million euros this year.

Nikhil Kumar: Yeah. We have about 3 and a half million euros worth of orders for execution this year. We will execute that 3 and a half million euros this year. We don't see a big pipeline for business for next year right now, but the Turkey facility still continues to be an insurance facility in case we have to do major work for service. For insurance, you have to pay a certain amount to keep it alive, and it will probably be used. Still playing that role even next year.

Speaker #2: We don't see a big pipeline for business for next year right now. But the Turkey facility still continues to be like an insurance facility in case we have to do major field service.

Speaker #2: And for insurance, you have to pay a certain amount to keep it alive. And it will probably continue to play that role even next year.

Speaker #6: Got it. Thanks. That's all from my side.

Mythili Balakrishnan: Got it. Thanks. That's all from my side.

Operator: Thank you. Next question comes from the line of Salil Desai with Marcellus Investment Managers. Please go ahead.

Speaker #1: Thank you. Next question comes from the line of Salil Desai with Marcellus Investment Managers. Please go ahead.

Speaker #3: Hi, Nikhil. Nikhil, I think six months back on one of the calls, you mentioned that you guys are looking at the refurbishment opportunity in India.

Salil Desai: Hi, Nikhil. Nikhil, six months back on one of the calls, you mentioned that you guys are looking at the refurbishment opportunity in India. If there has been any progress on that, you could update on that, please.

Speaker #3: So, if there's been any progress on that, could you please provide an update?

Speaker #2: Yeah, we have one or a few hydro refurbishment orders. They're already in the order book from the last quarter, Q1. And there are a few more jobs in the pipeline for Q2 and Q3.

Nikhil Kumar: Yeah. We have one of few hydro refurbishment orders. It is already in the order book for in the last quarter, Q1, and there are a few more jobs in the pipeline for Q2 and Q3, and we are very active in the hydro refurbishment market in India.

Speaker #2: And we are very active in the hydro refurbishment market in India.

Speaker #3: Okay. And any plans of when you would—when will you be in a position to take it global?

Salil Desai: Great. Any plans of when you will be in a position to take it global?

Speaker #2: At the moment, we're not considering taking it global.

Nikhil Kumar: At the moment, we are not looking at taking it.

Speaker #3: Understood. Second question is going back on some questions on demand. Now, in your experience, if you could just kind of give some picture on how elastic is demand to prices or costs, given that commodity prices are increasing—metal prices are up, freight costs are up—plus there's a shortage of all equipment in the power value chain, and prices are going up there too, of the base product.

Salil Desai: Understood. Second question is, going back on some questions on demand. In your experience, if you could just give some picture on how elastic is demand to prices or costs, given that commodity prices are increasing, metal prices are up, freight costs are up, plus there is a shortage of all equipment in the power value chain, and prices are going up there too on the base product. When you talk to your customers, do you sense that there could be a point where they might start rethinking the scale of projects or the timing of projects or something like that?

Speaker #3: So, when you talk to your customers, do you sense that there could be a point where they might start rethinking the scale of projects or the timing of projects, or something like that?

Speaker #2: The power plant, they formed a very, very small percentage of the overall project cost. You look at data centers and things like that—it's less than 5%.

Nikhil Kumar: The power plant forms a very, very small percentage of the overall project cost. If you look at data centers and things like that, it is less than 5%. So the demand elasticity is very high. They need electricity, and there is no choice. They need to have behind-the-meter power generation equipment, and they have to pay for it if commodity prices go up. This market is, there is no choice. They need electricity to run the data centers. It is not just data centers, it is also grid stabilization. You need to have equipment for grid stabilization. There is a push towards renewables. There is a certain mix that all utilities have to have in terms of renewables. So these are all factors that are driving compulsive buying power. You have to do it.

Speaker #2: So, the demand is—elasticity is very high. They need electricity and there's no choice; they have to buy, they have to have these, they need to have behind-the-meter power generation equipment.

Speaker #2: And they have to pay for it. The price is commodity prices go up. That's this market—there's no choice. They need electricity to run the data centers.

Speaker #2: It's not just the data centers; it's also grid stabilization. You need to have equipment for grid stabilization. There is a push towards renewables, and there is a certain mix that all utilities have to maintain in terms of renewables.

Speaker #2: So these are all factors that are driving compulsive buying power. You have to do it.

Speaker #3: Understood. Great. Very helpful. Thank you so much.

Salil Desai: Understood. Great. Very helpful. Thank you so much.

Speaker #1: Thank you. Next question comes from the line of Amit Anvani with PL Capital. Please go ahead.

Nikhil Kumar: Thank you.

Operator: Next question comes from the line of Amit Mandwani with PL Capital Private.

Speaker #5: Hi, Nikhil. Thank you, and congratulations on the very strong set of numbers. My first question is again on the service business. Since the installations are growing so rapidly for you, what's the service revenue contribution, and can it scale up in the next two to three years?

Amit Mandwani: Hi, Nikhil. Thank you and congrats for the very strong set of numbers. My first question again on this service business. Since the installations are growing so rapidly for you, what is service revenue contribution, and can it scale up in next 2, 3 years? If so, probably that can aid your EBITDA margin higher. Why are we still guiding that 18%, 19% if the installations have gone up and probably we have a better service revenue also apart from the product demand?

Speaker #5: And if so, probably that can aid in the term margin being higher. So, while we are still guiding that 18-19 percent, the installations have gone up and probably we have better service revenue also, apart from the product demand.

Speaker #2: Generators electric generators don't require service. For the first 10 years should not require service at least put it this way. For the first 10 years of their operation, if they are well, good manufactured, high-quality machines, and they're reasonably well maintained, there is almost zero service potential from when the first 10 years to that reason why we have it.

Nikhil Kumar: Electric generators don't require service for the first 10 years. Should not require service, let me put it this way, for the first 10 years of their operation if they are good manufactured, high quality machines and they are reasonably well-maintained. There is almost zero service potential from the first 10 years. That's the reason why we have it.

Speaker #5: Understood. But what's the proportion now?

Amit Mandwani: Understood. What is the proportion now?

Speaker #2: So earlier, the proportion used to be 5–6%, and now it seems, in terms of sales, it still remains around 5–6% of our overall sales.

Nikhil Kumar: Earlier the proportion used to be 5%, 6%, and now since the sales, it still remains around 5%, 6% of our overall sales. The sales are also growing at 30%, 40% per year. Our service business is also still growing at that rate, keeping the place, the percentage remains the same of our overall business.

Speaker #2: So the sales are also growing at 30, 40 percent per year. So our service business is also still growing at that rate, keeping the if the percentage remains the same of our overall business.

Amit Mandwani: Right. Second question on Turkey. Last financial year, because of the tariff uncertainties, we decided to, because of the advantage we were getting, utilize Turkish factory for the export. Now again, we are hearing that probably there could be more tariff, 100% tariff on oil imported nations. What are your thoughts? How are we now thinking and utilizing the Turkish factory amid?

Speaker #5: Right. Second question on Turkey. So, last financial year, because of the tariff uncertainties, we decided to—because of the advantage we were getting—utilize the Turkish factory for the export.

Speaker #5: So now again, we are hearing that there could probably be more tariffs—100 percent tariff—on oil-importing nations. So, what are your thoughts?

Speaker #5: How are we now thinking about and utilizing the Turkish factory? Amit?

Speaker #2: I don't know. I have not heard about this 100% tariff on it.

Nikhil Kumar: I have not heard about this 100% tariff on it.

Speaker #5: It's in the media. So, in general, what is your sense now on the factory?

Amit Mandwani: It's in the media. What is your sense now on the factory?

Nikhil Kumar: I don't have an answer for that right now since I'm not aware of this 100% duty. None of our customers have talked to me about it so far, as recently as two days ago. I don't think anyone's taking that threat very seriously at the moment.

Speaker #2: I don't have an answer for that right now since I'm not—well, I'm not aware of this 100 percent duty. None of our customers have talked to me about it so far.

Speaker #2: As recently as, like, two days ago. So I don't think anyone's taking that thread very seriously at the moment.

Speaker #5: Understood. But from Turkey, since you have started selling again, we were cutting down the operations there. So, how are we utilizing that factory now?

Amit Mandwani: Understood. But from Turkey, you have started selling again? We were cutting down the operations there. How are we utilizing that factory now?

Speaker #2: I just said five minutes ago. It's about 3.5 mill three to 3.5 million euros of sales for this year. We don't have a big we don't have an outlook for next year.

Nikhil Kumar: I just said five minutes ago, it's about EUR 3.5 million of sales for this year. We don't have an outlook for next year. That facility will still be used as a service backup, and it will have a certain cost to keep it alive. It's not a big cost, but it will be there as an insurance for our service for the European market where we have a big population of machines. That's the strategy at the moment.

Speaker #2: That facility will still be used as a service backup, and it will have a certain cost to keep it alive. It's not a big cost, but it will be there as insurance for our service for the European market, where we have a large population of machines.

Speaker #2: And that's the strategy at the moment.

Speaker #5: Right. Lastly, on your capex, you did highlight a ₹50 crore investment, which will probably get you close to ₹3,200 crore by FY28. I just wanted to understand if you are adding capacity beyond that.

Amit Mandwani: Right. Lastly, on your CapEx, you did highlight at INR 50 crore investment probably will get you to close to INR 3,200 crore by FY28. Just wanted to understand, and probably you are adding capacity beyond that. Will it be also driven by the demand for you will be driven by more customer additions or any other verticals? Or this is the pure play demand which is coming and that is where you will be expanding because of the demand or there is other thought process also for the capacity expansion over three, four years?

Speaker #5: Will it also be driven by demand? Will it be driven by more customer additions or any other verticals, or is this the pure plate demand which is coming, and that's where you'll be expanding because of the demand? Or are there other thought processes also for the capacity expansion for the next three to four years?

Nikhil Kumar: Partly new customers, partly new products, and partly existing products and existing customers. I cannot give you the mix, but it is going to be driven by both.

Speaker #2: Partly new customers, partly new products, and partly existing products and existing customers. So, I can't give you the mix, but it is going to be driven by both.

[Company Representative] (TD Power Systems): Understood. Thank you so much.

Speaker #5: Understood. Thank you, sir. Thank you so much.

Speaker #2: Thank you.

Operator: Thank you. Next question comes from the line of Aman Agarwal with Nuvama AMC. Please go ahead.

Speaker #1: Thank you. Next question comes from the line of Aman Agarwal with Nuama AMC. Please go ahead.

Speaker #4: Hi, thank you. Many congratulations to Nikhil for Q1 FY27, for the strong set. So, this is just a small clarification on larger generators. You're saying it takes 18 to 20 months to make a large generator?

Aman Agarwal: Hi. Thank you. Many congratulations to Nikhil and team for the strong thread.

Nikhil Kumar: Yeah.

Aman Agarwal: Just a small understanding on larger generators. You are saying it takes 18 to 20 months to make a large generator. Just want to understand, add to this the time to get the plant up and ready. When should the revenue be impacted because of the larger generators? When should we start thinking about additions from that?

Speaker #4: So, I just want to understand: adding to this, the time to get the plant up and ready — when should we start, and when should the revenue be impacted because of the larger generators?

Speaker #4: When should we start thinking about additions for that?

Nikhil Kumar: I have no comment. I cannot answer any of these questions. Unless I announce the exact deal to the market, like what exactly we are going to be doing, then unless I come to that stage, I cannot answer this question. I am really sorry. You will have to wait until we announce it sometime in August. At that point of time, we will happily answer all these questions. These are pertinent questions, but it cannot be answered today.

Speaker #2: I have no comments. I can't answer any of these questions. I don't have any—unless I announce the exact deal to the market, what exactly we're going to be doing—then, unless I come to that stage, I can't answer this question.

Speaker #2: I'm really sorry. You'll have to wait until we announce it sometime in August. And yes, at that point in time, we will answer all these questions.

Speaker #2: It's an important question, but this cannot be answered today.

Speaker #4: No problem, sir. And sir, just a second thing: on the capex side, for the already existing capacity, if I remember right, you are planning to do a ₹50 crore capex both in FY27 as well as FY28.

Aman Agarwal: No problem, sir. Sir, just second thing, on the CapEx side for the already existing capacity, if I remember right, you are planning to do INR 50 crore CapEx both in FY27 as well as FY28. Just to understand, is there a debottlenecking scope beyond INR 3,200 crore as well that you can do in FY28 sometime?

Speaker #4: So just to understand, is there a de-bottlenecking scope beyond ₹3,200 crore as well that you can do in FY28 sometime?

Speaker #2: This is a dynamic situation that keeps changing. Nothing is written in stone over here that we can't change. We have to adapt to the different kinds of demand for different kinds of products.

Nikhil Kumar: This is a dynamic situation that keeps changing. Nothing is written in stone over here that we cannot change. We have to adapt to the different kinds of demand for different kinds of products, and we have to adapt our capacities to be ready to manufacture what the market wants. If I had said earlier that we need 50 plus 50, now I am saying we need 50 for FY28 and for FY29 and FY30, we are looking at a larger situation. What do we need for meeting the demand to push the capacity to beyond 40? I am saying the same thing again and again and again. We will get back to you about it in three months time.

Speaker #2: And we have to adapt our capacities to be ready to manufacture what the market wants. So if I had said earlier that we need 50 plus 50, now I'm saying we need 50 for FY28, and for '29 and '30, we're looking at a larger—we're looking at a larger situation.

Speaker #2: What do we need to meet the demand to push the capacity to be at 40? And I'm saying the same thing again and again and again.

Speaker #2: And we will get back to you about it in three months’ time.

Speaker #4: Got it, sir. Bye. Thank you.

Aman Agarwal: Got it, sir. Thank you.

Speaker #1: Thank you. Next question comes from Ganesh Ram with Unifi Capital. Please go ahead.

Operator: Thank you. Next question comes from the line of Ganesh Rajagopalan with Unifi Capital. Please go ahead.

Speaker #5: Thank you for taking my question, and congratulations, Nikhil and team.

Ganesh Rajagopalan: Thank you for taking my question, and congratulations, Nikhil and team.

Ganeshram Rajagopalan: Thank you for taking my question, and congratulations, Nikhil and team.

Speaker #2: Hello, Ganesh.

Nikhil Kumar: Hello, Ganesh.

Speaker #5: Hi Nikhil, mine is more strategic and high level. I've been looking at the comments of some of these global OEMs, and recently, I think there's a lot of discussion around what ROI these data centers are actually making on the capex.

Ganesh Rajagopalan: Hi. Nikhil, mine is more strategic and high level. I have been looking at the commentary of some of these global OEMs. Recently, I think there is a lot of discussions around what is the ROI that these data centers are actually making on the CapEx. In the four to five years sort of backlog that they have, visibility they have, a large proportion of it seems to be slot reservation agreements, which do not seem as secure as orders, although there definitely is a tie-in. When we start thinking about FY29 and FY30 from here, what is the confidence that you are getting that this CapEx is going to continue to stay and there will be sufficient demand to absorb the capacity?

Ganeshram Rajagopalan: Hi. Nikhil, mine is more strategic and high level. I have been looking at the commentary of some of these global OEMs. Recently, I think there is a lot of discussions around what is the ROI that these data centers are actually making on the CapEx. In the four to five years sort of backlog that they have, visibility they have, a large proportion of it seems to be slot reservation agreements, which do not seem as secure as orders, although there definitely is a tie-in. When we start thinking about FY29 and FY30 from here, what is the confidence that you are getting that this CapEx is going to continue to stay and there will be sufficient demand to absorb the capacity?

Speaker #5: And in the four- to five-year sort of backlog that they have visibility on, a large proportion of it seems to be slot reservation agreements, which don't seem as secure as orders.

Speaker #5: Although there definitely is a tie-in. So, when we start thinking about FY29 and FY30 from here, what's the confidence that you're getting that this capex is going to continue to stay and that there will be sufficient demand to absorb the capacity?

Speaker #2: Our OEM customers have taken significant amounts of non-refundable advances from people who want to buy their equipment. That is the reason why we have confidence, and they have confidence, that the demand will be there in the years ahead.

Nikhil Kumar: Our OEM customers have taken significant amounts of non-refundable advances.

Nikhil Kumar: From people who want to buy their equipment as well.

Nikhil Kumar: That is the reason why we have confidence, and they have confidence that the demand will be there in the years ahead.

Speaker #5: Yeah, yeah. Makes sense. All right, thanks, Nikhil.

Ganesh Rajagopalan: Yeah, makes sense. All right, thanks, Nikhil.

Ganeshram Rajagopalan: Yeah, makes sense. All right, thanks, Nikhil.

Speaker #2: Thank you.

Operator: Thank you. Thank you. Next question comes from the line of Suraj Malu with Catamaran. Please go ahead.

Speaker #1: Thank you. Next question comes on the line of Suraj Malu with Katmaran. Please go ahead.

Speaker #4: Hello, sir. Thank you for this opportunity. Sir, in the last quarter, you had mentioned that we had largely employed the people we wanted to. And now we see a 20% quarter-over-quarter employee expense increase.

Suraj Malu: Hello, sir. Thank you for this opportunity. Sir, in the last quarter, you had mentioned that we have largely employed people we wanted to, and now we see 20% quarter-over-quarter employee expense increase. Can you help understand this?

Speaker #4: Can you help understand this?

Speaker #3: So the number of employees has increased. You see that the business is also increasing—we have almost 75% growth over last quarter. So I think there could be some more additions to the employee list because we are scaling up from 1,750 to 2,600.

[Company Representative] (TD Power Systems): If the number of employees have increased, you see that the business is also increasing. We have almost 75% growth over last quarter. I think there could be some more additions to the employees list because we are scaling up from 1,750 to 2,600. It is but natural that the expenses will go up.

Speaker #3: So, it is but natural that the expenses will go up.

Suraj Malu: Got it. Can we understand how many employees have we added in this quarter?

Speaker #4: Got it. And can we understand how many employees we have added in this quarter?

Speaker #3: No, we don't share that kind of information, sir.

[Company Representative] (TD Power Systems): No, we don't share that kind of information, sir.

Speaker #4: All right, thank you very much.

Suraj Malu: All good. Yeah. Thank you very much.

Speaker #3: Thank ank you.

[Company Representative] (TD Power Systems): Thank you.

Speaker #4: And this includes the wage hike as well for this year, or is that the actual term?

Suraj Malu: This includes the wage hike as well for this year, or that is yet to come?

Speaker #3: No, that is already built in.

[Company Representative] (TD Power Systems): No, that is already built in.

Speaker #4: Okay. Thank you very much.

Suraj Malu: Okay. Thank you very much.

Speaker #1: Thank you. The next question comes from the line of Vinci with Philip Capital. Please go ahead.

Operator: Thank you. Next question comes from the line of Vinci with PhillipCapital. Please go ahead.

Speaker #5: Yeah. Hi, thank you for the opportunity. I had a question regarding the scan, Nikhil. In your annual report, you have mentioned that $52 billion is the global generator market.

[Analyst] (PhillipCapital): Yeah, hi. Thank you for the opportunity. I had a question regarding the TAM, Nikhil. In your annual report, you have mentioned that $52 billion is the global generator market. What would be the relevant TAM for us, specifically in the sub 200 megawatt and the 0 to 50 megawatt range? How big is that TAM for that particular range?

Speaker #5: So, what would be the relevant timeline for us specifically in the sub-200 megawatt and the 0 to 50 megawatt range? How big is that timeline for that particular range?

Speaker #2: I don't have the latest number with me, but some time back it was something like $5 to $10 billion. So, yeah.

Nikhil Kumar: I do not have the latest number with me, but sometime back it was something like 5 to 10 billion.

[Analyst] (PhillipCapital): Okay. Under 50 megawatts.

Nikhil Kumar: Yeah.

Speaker #5: Okay. And the 5,200 megawatt—how big is that market?

[Analyst] (PhillipCapital): Okay. In the 50 to 100 megawatt range, how big is that market?

Speaker #2: I don't have the latest number with me, and there's no place where you can get this kind of data or where someone is tracking this.

Nikhil Kumar: I don't have the latest number with me. There's no place where you can get this kind of data that someone is tracking this.

Speaker #2: So that's the difficulty

[Analyst] (PhillipCapital): Yeah, exactly. That's the difficulty even we are having in terms of-

Speaker #5: When we are having—in terms of—we don't have that number. Okay. Okay. Thanks, Nikhil. Thanks for the reply.

Nikhil Kumar: Yeah. Actually, the way it shows that, we don't have that number.

[Analyst] (PhillipCapital): Okay. Thanks, Nikhil. Thanks for the reply.

Speaker #1: Thank you. Next question comes from the line of Sambit Patel with TTI Partners. Please go ahead.

Operator: Thank you. Next question comes from the line of Samit Patel with DTI Partners. Please go ahead.

Speaker #5: Yeah. Hi. Thanks for taking my question, Nikhil. You mentioned our customer OEMs get advances from their customers. Just wondering, for us, do we also get advances from our customers when we book orders, or how does our working capital work for us?

Samit Patel: Yeah. Hi. Thanks for taking my question, Nikhil. You mentioned our customer OEMs get advances from their customers. Just wondering for us, do we also get advances from our customers when we book orders, or how does our working capital work for us?

Samvit Patel: Yeah. Hi. Thanks for taking my question, Nikhil. You mentioned our customer OEMs get advances from their customers. Just wondering for us, do we also get advances from our customers when we book orders, or how does our working capital work for us?

Speaker #2: We get a certain with certain customers, we get certain we get advances.

Nikhil Kumar: With certain customers, we get advances.

Speaker #5: And if possible, can you quantify how much that would be in the overall value of the generator?

Samit Patel: And, if possible, can you quantify how much would that-

Samvit Patel: And, if possible, can you quantify how much would that-

Nikhil Kumar: No

Samit Patel: be in the overall value of the generator?

Samvit Patel: be in the overall value of the generator?

Nikhil Kumar: No, we can't do that. Sorry. We can't do that.

Speaker #2: No, it can't do that. Sorry, we can't do that.

Speaker #5: Okay. No worries. Thanks.

Samit Patel: Okay. No worry. Thanks.

Samvit Patel: Okay. No worry. Thanks.

Speaker #1: Thank you. Next question comes from Dipensha with Six Senses. Please go ahead.

Operator: Thank you. Next question comes from the line of Dipen Shah with Sameeksha Capital. Please go ahead.

Dipen Shah: Yeah. Thank you for the opportunity. First of all, many, many congratulations for great execution. I just had one question on the domestic business. Nikhil, it is mentioned that the domestic quarter book was only 5% to 6% of what we got during the quarter. Can you just give us some more insights, which are the sectors which are holding it back, and whether data center business in India does provide some scope for further ordering in the next few quarters? Something on that will be helpful for us.

Speaker #4: Yeah. Thank you for the opportunity. And first of all, many, many congratulations on the great execution. I just had one question on the domestic business.

Speaker #4: Nikhil, it's mentioned that the domestic order book was only 5% to 6% of what we got during the quarter. Can you just give us some more insights— which are the sectors that are holding it back, and whether the data center business in India provides some scope for further ordering in the next few quarters?

Speaker #4: Something on that will be helpful for us.

Speaker #3: So in India, the demand

Nikhil Kumar: In India, the demand is fairly subdued. It is in the region of 10%, 12% like what we have added now. I have been saying this, not just now, but I have been saying this for the past five, six quarters, and that is what it is, and please don't expect anything more. It is correct what I am saying. It will continue to be this way. The demand is being supported by metals and across the board, but there is no explosive growth taking place in the economy, so there is no explosive demand for power generation. India is putting up a lot of capacity right now in large coal-fired power plants, it is 600, 800 megawatt sets. So there is a huge demand in those larger sizes. So all the players in that segment are completely booked out for the next three, four years, including people like BHEL, L&T, Mitsubishi.

Speaker #2: is fairly subdued in a I mean, it's in the region of 10, 12 percent like what we have added now. I've been saying this not just now, but I've been saying this for the past five, six quarters and that is what it is and that's please don't expect anything more and it is correct what I'm saying.

Speaker #2: And it still will continue to be this way. The demand is being supported by metals and across the board, but there's no explosive growth taking place in the economy.

Speaker #2: So, there's no explosive demand for power generation. India is putting up a lot of capacity right now in large coal-fired power plants—it's 600, 800 megawatts, less.

Speaker #2: So there's a huge demand in those large sizes, so all the players in that segment are completely booked out for the next three to four years, including people like BHEL, L&T, Mitsubishi. So there is massive power generation capacity in the larger sizes.

Nikhil Kumar: So there is massive power generation capacity which can be added in the larger sizes. But that is still not going to be enough for India. So this power shortage is going to continue for at least some more time. Second part of the question, AI. We don't see any meaningful AI when it comes to things like hyperscalers and everything being put up in India. We still have a firm belief that unless there is an availability of gas and lots of water, it is difficult to have a hyperscaler kind of facility in India. They are talking about renewables and everything, but you need to have baseload power for data centers, and that has to come from gas. Diesel engines is not a solution for large scale 500 megawatt to 1 gigawatt hyperscalers.

Speaker #2: But that's still not going to be enough for India. So this power shortage is going to continue for at least some more time. Second part of the question, AI—we don't see any meaningful AI, when it comes to things like hyperscalers and everything, being put up in India.

Speaker #2: And we are still of the firm belief that unless there is an availability of gas and lots of water, it is difficult to have a hyperscaler kind of facility in India.

Speaker #2: They're talking about renewables and everything, but you need to have baseload, you need to have baseload power for data centers, and that will have to come from gas.

Speaker #2: Diesel engines are not a solution for large-scale, 500-megawatt to 1-gigawatt hyperscalers. So, I don't think we're going to see widespread demand for this in India at the moment.

Nikhil Kumar: I don't think they are going to see a widespread demand for this in India at the moment.

Speaker #4: Okay, understood. Thank you very much, and all the very best to you and your team. Thank you.

Dipen Shah: Understood, Nikhil. Thank you very much, and all the very best to you and your team. Thank you.

Speaker #2: Thank you.

Nikhil Kumar: Thank you.

Speaker #1: Thank you. The next question comes from the line of Pratamesh Rane with Philip Capital. Please go ahead.

Operator: Thank you. Next question comes from the line of Prathamesh Ranade with PhillipCapital. Please go ahead.

Prathamesh Ranade: Yeah, hi, sir. Congratulations on a stellar quarter. Just one question from my side. Your gross margins were stable year-over-year. Was that because of the mix or you are able to pass on commodity price hikes?

[Analyst] (PhillipCapital): Yeah, hi, sir. Congratulations on a stellar quarter. Just one question from my side. Your gross margins were stable year-over-year. Was that because of the mix or you are able to pass on commodity price hikes?

Speaker #5: Hi, sir. Congratulations on a stellar quarter. Just one question from my side. I need to ask about gross margins—they were stable year-over-year. So was it because of the mix, or were you able to pass on commodity price hikes?

Speaker #2: So, I answer this question a number of times. I'll answer it once again. When we give guidance on gross contribution and gross margins, we have certain levers. The levers are cost reduction, price increases, and capacity utilization.

Nikhil Kumar: I answered this question a number of times and I will answer it once again. When we give a guidance on gross contribution, gross margins, we have certain levers that we have. Levers are cost reduction, price increases, capacity utilization. Capacity utilization, of course, will not come in the case of gross contribution and exchange rate. These are the levers that we have. As a company, we have these levers, and sometimes something goes up, sometimes something goes down. But overall, we try to keep the balance and try to maintain the numbers that we commit to the market. I have answered this question a number of times, and I am saying the same thing again and again and again.

Speaker #2: Capacity utilization, of course, will not come in the case of gross contribution. And exchange rate—so these are the levers that we have, right?

Speaker #2: As a company, we have these levers, and sometimes something goes up and sometimes something goes down. But overall, we try to keep the balance, maintain the numbers, and commit to the market.

Speaker #2: I have answered this question a number of times, and I'm saying the same thing again and again.

Speaker #5: Got it. Got it. Got it.

Prathamesh Ranade: Got it.

[Analyst] (PhillipCapital): Got it.

Speaker #1: Thank you. The next question comes from the line of Vivek Gautam with GS Investment. Please go ahead.

Operator: Thank you. Next question comes from the line of Vivek Gautam with GS Investment. Please go ahead.

Vivek Gautam: Congratulations once again on the great set of numbers being consistently given by the company under your leadership. So there was recently a sort of a meltdown in Korean market of the AI, and India sort of getting benefit, NTI trade and IT services also getting benefit of it. Is it sort of a temporary blip adding to some issues at Oracle and OpenAI data center plants in US also, or any impact on our services there? Second question was about when you expect to do the QIP complete and deploy the funds, sir? Thank you.

Speaker #5: Congratulations once again on the great set of numbers being consistently, probably, given by the company, and your leadership. So, there was recently a sort of meltdown in the Korean market of AI, and India is sort of getting the benefit in the IT trade and IT services also getting benefit from it.

Speaker #5: Is it sort of a temporary blip adding to some issues that Oracle and OpenAI data center plans in the US also, or any impact on our services? And the second question was about when you expect the QIP to complete and deploy the funds?

Speaker #5: Thank you.

Nikhil Kumar: The first question I have absolutely no idea how to answer it. I am not in that market to give you an educated answer on that question. The second part of the question also, I am not in a position to be able to answer any questions about it right now.

Speaker #2: First question, I have absolutely no idea. I'll answer it—I don't know enough about that market to give you an educated answer on that question.

Speaker #2: And the second part of the question, also, I'm in a normal position to be able to answer any questions about it right now.

Speaker #5: But then, opportunity size remains quite large and time remains quite okay for the next few years at least. That is for sure.

Vivek Gautam: But then opportunity size remains quite large and TAM remains quite okay for the next few years at least, that is for sure.

Speaker #2: Yes. Yes. That's for sure.

Nikhil Kumar: Yes, that is for sure.

Vivek Gautam: Yes. Thanks a lot. Thank you very much.

Speaker #5: Thanks a lot. Thank you very much.

Speaker #1: Thank you. Next question comes from the line of Julie Bhaviskar with Ashika Institutional Equities. Please go ahead.

Operator: Thank you. Next question comes from the line of Julie Paviska with Aashika Institutional Equities. Please go ahead.

Speaker #4: Hello. Can you hear me?

Julie Paviska: Hello, can you hear me?

Juili Baviskar: Hello, can you hear me?

Speaker #2: Yes. I can hear you.

Nikhil Kumar: Yes, I can hear you.

Julie Paviska: Yeah. So, hi, and congratulations on the great numbers. My question was around the number of generators. On the 320 additional generator this quarter, should we see the growth going forward as continued unit count expansion or is it even bigger, however, that value per megawatt will increase? So the question is, it will be a volume story or realization per unit story from here?

Juili Baviskar: Yeah. So, hi, and congratulations on the great numbers. My question was around the number of generators. On the 320 additional generator this quarter, should we see the growth going forward as continued unit count expansion or is it even bigger, however, that value per megawatt will increase? So the question is, it will be a volume story or realization per unit story from here?

Speaker #4: Yeah. Yeah. So hi and congratulations on the great numbers. So my question was around the number of generators. So on the 320 additional generator this quarter, so should we see the growth going forward as continued unit count expansion or it is even bigger that bigger driver that value per megawatt will increase?

Speaker #4: So the question is, will it be a volume story or a realization per unit story from here?

Speaker #2: It will be both: unit as well as realization.

Nikhil Kumar: It will be both unit as well as realization.

Speaker #4: Okay. So can we see around 13,000 to 15,000 units as the total number of generators in FY30 or FY31?

Julie Paviska: Okay. So can we see around 13,000 to 15,000 units as a total generators in FY30, 31?

Juili Baviskar: Okay. So can we see around 13,000 to 15,000 units as a total generators in FY30, 31?

Nikhil Kumar: Ma'am, that FY30, it is quite a distance that we can give answer to this. We will take it year on year.

Speaker #2: And that FY30 is quite a, you know, it's quite a distance. We can't give an answer to this now. We'll take it year on year.

Speaker #4: Okay. But the run rate can be similar to this quarter?

Julie Paviska: Okay. But the run rate can be similar to this quarter.

Juili Baviskar: Okay. But the run rate can be similar to this quarter.

Nikhil Kumar: Yes. With the growth in the revenue, definitely this also will grow. It will be a play of both.

Speaker #2: Yes, yes. If the growth in the revenue happens, then definitely this will also grow. It will be a play of both.

Speaker #4: And with larger generator size, the per megawatt also increases; megawatt per generator also increases.

Julie Paviska: With larger generator size, the megawatt per generator also increase.

Juili Baviskar: With larger generator size, the megawatt per generator also increase.

Speaker #2: Yes. Obviously.

Nikhil Kumar: Yes. Obviously.

Speaker #4: Okay, thank you. Thank you for this.

Julie Paviska: Okay. Thank you for this.

Juili Baviskar: Okay. Thank you for this.

Speaker #1: Thank you. The next question comes from the line of Arpit Tapadia with IGE India. Please go ahead.

Operator: Thank you. Next question comes from the line of Arpit Tapadia with IGE (India). Please go ahead.

Speaker #5: Yeah. Hi. Thank you for the opportunity, and congratulations on a great set of numbers. My question is, since we have announced our capacity increase up to, let's say, 32 billion in 2028, should that be treated as a ceiling for that year, or is there any kind of bottleneck or opportunity within that to, let's say, increase it further?

Arpit Tapadia ): Yeah, hi. Thank you for the opportunity and congratulations on great set of numbers.

Arpit Tapadia: Yeah, hi. Thank you for the opportunity and congratulations on great set of numbers.

Nikhil Kumar: Thank you.

Arpit Tapadia ): My question is, since we have announced about our capacity increase up to, let's say, 32 billion in 2028, should that be treated as ceiling for that year or has there any kind of bottleneck opportunity within that to, let's say, increase it further?

Arpit Tapadia: My question is, since we have announced about our capacity increase up to, let's say, 32 billion in 2028, should that be treated as ceiling for that year or has there any kind of bottleneck opportunity within that to, let's say, increase it further?

Speaker #2: I have already answered that question, I'm sorry. I don't want to answer it once again, but I've already answered that question. We definitely—3,200 is an approximate number, plus or minus we can do, and with the opportunities there from the market side, we're not going to turn away from it.

Nikhil Kumar: I have already answered that question. I am sorry, I do not want to answer it once again, but I have already answered that question. We have mentioned 3,200. It is an approximate number, plus, minus we can do. If the opportunity is there on the market side, we are not going to turn away from it. We will do it.

Speaker #2: We will do it.

Speaker #5: Okay. Thank you.

Arpit Tapadia ): Okay, thank you.

Arpit Tapadia: Okay, thank you.

Nikhil Kumar: Yes.

Speaker #1: Thank you. Next question comes from the line of Abhishek Gandha with Value Plus Advisors LLP. Please go ahead.

Operator: Thank you. Next question comes from the line of Abhishek Kamdar with Value Plus Advisors LLP. Please go ahead.

Speaker #5: Yeah. Hi. Thank you for the opportunity, and congratulations on a great set.

Abhishek Kamdar: Yeah. Hi, thank you for the opportunity and congratulations on a great set.

Speaker #2: Thank you.

Nikhil Kumar: Thank you.

Speaker #5: My question is around working capital. Do we expect this to remain in line with what we have currently? And second, the other current liabilities have increased significantly this quarter.

Abhishek Kamdar: My question is around working capital. Do we expect this to remain in line with what we have currently? Second is the other current liabilities have increased significantly this quarter. Is this predominantly customer advances?

Speaker #5: Is this predominantly customer advances?

Speaker #2: Yeah. Actually, working capital will continue to remain on the same line because we see significant growth from last year to this year. And on the current liabilities, yes, there are customer advances and also provisions for taxation because of the increased volume of business.

Nikhil Kumar: Yeah, actually, working capital will continue to remain on the same line because we see a significant growth from last year to this year. On the current liabilities, yes, there are customer advances and also the provision for taxation because of the increased volume of business.

Speaker #5: Okay. Thank you, and all the best.

Abhishek Kamdar: Okay. Thank you and all the best.

Speaker #1: Thank you. Next question comes from the line of Kushal Goenka with Mangalkesha Financial Services. Please go ahead.

Operator: Thank you. Next question comes from the line of Kushal Goenka with Mangal Keshav Financial Services. Please go ahead.

Speaker #5: Yeah. Hi, Nikhil. Hope you're doing well. So, my question was again on the trade receivables part. So, it's around close to ₹785 crore. Now, I understand that we have been growing at a very high speed.

Kushal Goenka: Yeah, hi Nikhil. Hope you are doing well. My question was again on the trade receivables part. It is around close to INR 785 crore. Now, I understand that we have been growing at a very high speed. However, we do have around INR 240 crore of money in the balance sheet, and in spite of that, we are doing a fundraise. What efforts are we putting to better our working capital and particularly the receivables day, so we can generate more internal accruals and would not need a lot of external funds to grow at a higher speed?

Speaker #5: However, we do have around ₹240 crores of money in the balance sheet and in spite of that, we are doing a fundraise. So what efforts are we putting to better our working capital, and particularly the receivables days, so we can generate more internal accruals and would not need a lot of external funds to grow at a higher speed?

Speaker #2: We have payment terms fixed with our customers, and we're not going to be able to alter them dramatically to be able to do what you're saying we should do.

Nikhil Kumar: We have payment terms fixed with our customers, and we are not going to be able to alter them dramatically to be able to do what you are saying we should do. We need to make sure that our business continuity with our customers is a number 1 priority. Commercial terms and conditions can be changed little bit here and there, but they cannot be altered significantly because otherwise we will lose business. So we have to keep in perspective that we have to keep the business, keep our customers, grow the business with them. Working capital needs may increase, funding requirements may increase, in which case, we will have to look at ways to fund the entire company. Everything is a balance of little bit of this, little bit of that.

Speaker #2: We need to make sure that our business continuity with our customers is a number one priority. Commercial terms and conditions can be changed a little bit here and there, but they cannot be altered significantly, because otherwise we will lose business.

Speaker #2: So we have to keep in perspective that we have to keep the business, keep our customers, and grow the business with them. Working capital needs may improve or increase.

Speaker #2: Funding requirements may increase, in which case we will have to look at ways to fund the entire company. Everything is a balance—a little bit of this, a little bit of that.

Speaker #2: But in the end, we have to make sure the number one priority always is that our customers have to be happy and have to continue to buy our generators from us.

Nikhil Kumar: But in the end, we have to make sure the number one priority always is our customers have to be happy and have to continue to buy generators from us. Theoretically, what you are saying is possible, but practically it is not possible.

Speaker #2: So, theoretically, what you're saying is possible, but practically, it is not.

Kushal Goenka: Okay. Thank you so much. My second question is just a clarification on the fundraise. I hope we would also consider debt as compared to equity because we are debt free and the cost of equity is always higher than the cost of debt. Just wanted your thoughts on that.

Speaker #5: Okay, thank you so much. My second question is just a clarification on the fundraise. I hope we would also consider debt as compared to equity, because we are debt-free and the cost of equity is always higher than the cost of debt.

Speaker #5: So, just wanted your thoughts on that.

Speaker #2: I'm not going to be able to talk about any fundraise issues. We have issued a notification to the exchange that we're having a board meeting on Friday.

Nikhil Kumar: I am not going to be able to talk about any fundraise issues. We have issued a notification to the exchange that we will be having a board meeting on Friday, and I cannot discuss anything before the board meeting takes place on Friday. After Friday, after we finish the board meeting, naturally, we will have to disclose to the market what we plan to do. Then after that, once that has been disclosed to the market, I will be happy to answer questions, whatever questions you may have about our plans.

Speaker #2: And I cannot discuss anything before the board meeting takes place on Friday. After Friday, once we finish the board meeting, we will naturally have to disclose to the market what we plan to do.

Speaker #2: And then after that, once that is done to disclose to the market, I'll be happy to answer questions. So, you know, whatever questions you may have about our plans.

Kushal Goenka: Okay. Thank you so much.

Speaker #5: Okay. Okay. Thank you so much.

Speaker #1: Thank you. Next question comes from the line of Mohit Surana with Monarch Network Capital. Please go ahead.

Operator: Thank you. Next question comes from the line of Mohit Surana with Monarch Networth Capital. Please go ahead.

Speaker #3: Thank you for the opportunity again. So, just one question on the tariff refunds: some of the Indian companies have started receiving the refund of tariffs that they have paid to the US.

Mohit Surana: Thank you for the opportunity again. Just one question on the tariff refunds. Some of the Indian companies have started receiving the refund of tariffs that they have paid to the US. Are we seeing similar inflows?

Speaker #3: So, are we seeing similar inflows? So, just...

Nikhil Kumar: These all our products are exports India, so we are not the importer on record, and so we will not get any refunds.

Speaker #2: So, we have all our numbers as exports from India. So, we are not the importer on record. And so, we will not get any refunds.

Speaker #3: Understood. Thank you, sir. That's all from my end.

Mohit Surana: Understood. Thank you, sir. That is all from my end.

Speaker #2: Thank you, Mohit.

Nikhil Kumar: Thank you, Mohit.

Speaker #1: Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of the question and answer session. I now hand the conference over to the management for closing comments.

Operator: Thank you. Ladies and gentlemen, that was our last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments.

Nikhil Kumar: Thank you, everybody, for joining us on this call today. I will be in an investor conference next week where I hope to see many of you, and I look forward to the future interaction together. Thank you. Bye-bye.

Speaker #2: Thank you, everybody, for joining us on this call today. I will be at an investor conference next week, where I hope to see many of you.

Speaker #2: And I look forward to future interactions together. Thank you. Bye-bye.

Speaker #4: Thank you.

[Company Representative] (TD Power Systems): Thank you.

Speaker #1: Thank you. On behalf of TD Power Systems Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

Operator: Thank you. On behalf of TD Power Systems Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.

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