Krishna Patel: Thank you, Ikra, and good evening, everyone. A warm welcome to all participants joining the Q2 FY 2027 and H1 FY 2027 earnings conference call of Transformers and Rectifiers India Limited. Joining us today from the management team are Mr. Satyen Mamtora, the Managing Director and CEO, and Mr. Mehul Shah, the Chief Financial Officer, who will discuss the company's operational financial performance for the quarter and half year and address your questions thereafter. Before we begin, I would like to remind you that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to risks and uncertainties that could cause actual results to differ from those expressed or implied. With that, I would like to hand over the call to Mr. Satyen Mamtora, the Managing Director, CEO, for his opening remarks. Over to you, sir.
Satyen Mamtora: Thank you, Krishna. Good evening, everyone, and thank you for joining us today to discuss the performance of Transformers and Rectifiers India Limited for the second quarter, first half FY 2027. Q2 FY 2027 performance reflects better execution, improved capacity utilization, and operating leverage across manufacturing facilities. As of 30 September 2026, our unexecuted order book stood at INR 7,237 crores, up by 32% year on year, providing strong revenue visibility over the medium term. The order book is executable over the next 18 to 24 months. During Q2 FY 2027, we received order inflow of INR 1,169 crores, 97% year on year growth over low base of last year this time.
Satyen Mamtora: Major orders received during this quarter were first ever order of nuclear power sector supplying generator transformers for NPCIL Kaiga Units 5 and 6, marking the strategic entry into high level infrastructure and high-value infrastructure segment. Received large transformer order from Megha Engineering and Infrastructures Limited in August 2026 with execution scheduled over next 35 months. Received LOI from AP Transco in August 2026 for power transformers manufacturing, with deliveries planned within next 17 months. Won a large order from Damodar Valley Corporation in October 2026 for manufacturing and supplying 500 MVA and 200 MVA transformers to be executed in next 15 to 28 months. Secured a large order from GETCO in October 2026 for 80 MVA reactors and 125 MVA reactors and 500 MVA auto transformers, with the delivery schedule of next 24 to 30 months.
Satyen Mamtora: These demonstrate the breadth of our capabilities across large power transformers, auto transformers, and shunt reactors. We currently have INR 21,000 crore of inquiries under negotiation, of which bidding for 80% is domestic orders and 20% export orders, with an equal mix between the government and private customers with utilities and industrial customers. Other quarter updates. During the quarter, we successfully completed dynamic short circuit on three transformers, a significant technical milestone that values our products, our ability to withstand extreme electrical and mechanical stresses under fault conditions in accordance with the stringent international standards. Our ongoing transformer manufacturing expansion at Changodar is near completion with the commercial production expected to commence around Diwali. The additional capacity will further strengthen our capability to execute our growing order book and support the next phase of the revenue growth. Backward integration projects are progressing as per timeline.
Satyen Mamtora: In September 2026, we established a subsidiary in UK to strengthen our customer support and expand our presence in the UK and European markets. Over time, we plan to develop a local assembly and sales capability with the potential to evolve this operation into a manufacturing base serving the region. Following our Q2 performance, we remain confident of achieving FY 2027 guidance and continue to remain on track with our growth plans for the full year. Our focus for the remainder of the year of FY 2027 will be on clear priorities, accelerating execution of our existing order book, and ramping up expanded manufacturing capacities, progressing our backward integration initiatives, and maintaining discipline and sustainable profitable growth. From an industry perspective, the underlying demand environment continues to remain supportive. India is witnessing significant investments across power generation, transmission infrastructure.
Satyen Mamtora: Renewable energy integration and grid modernization, emerging areas such as data centers, railway electrification, EV infrastructure, and energy transition projects are creating additional sources of electricity demand and consequently, opportunities for the transformer industry. With our broad product portfolio, manufacturing capabilities, established customer relationships, and presence across more than 40 countries, TARIL is well-positioned to participate in the multi-year opportunity across domestic as well as international markets. With this, I hand over to Mr. Neeraj Shah, our CFO, who will run our past financial performance. Thanks in regards and happy Diwali greetings.
Mehul Shah: Thank you, sir. Good evening, everyone. I will take you through the financial performance of Transformers and Rectifiers (India) Limited for the Q2 and H1 of financial year 2027. Let me begin with our standalone performance for the quarter. During Q2 FY 2027, revenue from operations stood at INR 709 crore, 66% year-on-year growth, and 27% quarter-on-quarter growth. Revenue growth during the quarter, supported by improved capacity utilization and execution. EBITDA for the quarter stood at INR 114 crore, 203% YOY, and 53% quarter-on-quarter growth. EBITDA margin improved to 16.1% compared to 8.8% in Q2 FY 2026 and 13.3% in Q1 FY 2027. This reflects the benefit of higher operating leverage and improved utilization level during the quarter. Moving on, our performance for the H1 of the year. For H1 FY 2027, revenue from operations stood at INR 1,268 crore, a growth of 35% year-on-year.
Mehul Shah: EBITDA stood at INR 185 crore, 47% year-on-year growth, with the EBITDA margin improving to 14.6% from 13.4% in H1 FY 2026. Coming to the balance sheet, our leverage profile remained comfortable as of 30 September 2026. On a standalone basis, total debt stood at approximately INR 575 crore, comprising long-term borrowings of around INR 125 crore and short-term borrowings around INR 449 crore. The debt-to-equity ratio stood at approximately 0.35x, reflecting a manageable leverage position as we scale operation and invest in future growth. Standalone cash and cash equivalents stood at approximately INR 77 crore as of 30 September 2026. In addition, the company continues to have access to other bank balances and unutilized QIP proceeds earmarks for its backward integration initiatives, providing funding flexibility for the plant capital expenditure program. Working capital remains a key area of focus.
Mehul Shah: As of 30 September 2026, standalone inventories stood at approximately INR 654 crore, while trade receivables stood at around INR 1,053 crore, out of which INR 825 is current and the rest is the non-current debtors. Net working capital days stood at around 154 days, comprising inventory days of approximately 93 days, receivable days of around 117 days, and payable days of approximately 56 days. The working capital cycle reflects the nature of the transformer business, which involves long manufacturing cycle, milestone-based billing, testing requirements, and project link customer approvals. We continue to focus on collection, inventory planning, and milestone execution to improve capital efficiency as the scale of operation increases. To sum up, TARIL continues to operate from the position of financial strength. The growth in revenue and profitability during Q2 FY 2027 and H1 FY 2027, together with a manageable leverage profile, provides a sound foundation.
Mehul Shah: Our financial priorities remain disciplined capital allocation, tighter working capital management, and the timely funding of capacity expansion and backward integration initiatives. Thank you. I now hand it over back to the moderator for the Q&A session.
Operator: Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Harshit Sachdeva from Columbus Capital. Please go ahead.
Harshit Sachdeva: Hi, am I audible?
Operator: Yes, you are audible.
Harshit Sachdeva: Hi, sir. Good evening. Congratulations on a great set of numbers, sir. Really impressive. Sir, could you just elaborate a bit more on the Kaiga orders and the Megha Engineering order that you received? That is part one. Size, and what are we supplying, and who did we compete against, or did they directly come to you? Second, sir, a new company, Konoval, just got listed. Do we compete with them in any segment? That is two questions, sir. Thank you.
Satyen Mamtora: Yeah. Sorry, I could not get your name. Could you please Hello?
Harshit Sachdeva: Hello. Yes, sir. Am I audible?
Satyen Mamtora: Yeah. Your name, please? Again, sorry.
Harshit Sachdeva: Sir, my name Harshit Sachdeva. I work at
Satyen Mamtora: Hi, Harshit. The NPCIL order for Kaiga project, we were competing with Toshiba and other large transformer manufacturers. These are basically generator transformers for the nuclear power project. As far as Konoval is concerned, yes, we do compete with them in the segments of 132 and 220 kV.
Harshit Sachdeva: Okay. Sir, on the Kaiga order, any MVA or any order numbers that you could give? Is it repetitive in the nature now that you are qualified?
Satyen Mamtora: Yes. This is repetitive in nature. These are generator transformers. The NPCIL is putting a few more projects of nuclear power in India. So yes, this will be repetitive in nature. The rating of the transformer is 400 kV plus.
Harshit Sachdeva: Okay. Sir, just last clarification. If, let us say, 100 nuclear plant, I am just throwing a random number there. What would be the value of the transformer components or the goods that we supply on any new greenfield nuclear project?
Satyen Mamtora: Greenfield nuclear new projects would be close to about 15% to 18%.
Satyen Mamtora: Greenfield nuclear new projects would be close to about 15% to 18%.
Harshit Sachdeva: Okay.
Satyen Mamtora: The cost of the transformer.
Harshit Sachdeva: Okay. Thank you, sir. Thank you for the clarification and best wishes for Diwali. Thank you, sir.
Satyen Mamtora: Thank you, Harshit.
Operator: Thank you. Next question is from the line of Vignesh Iyer from Sequent Investment. Please go ahead.
Vignesh Iyer: Sir, congratulations on a great set of numbers. Just one question from my side. If you could share the mix of orders in terms of how much percentage of the total outstanding order book would be 400 kV plus, and how much would be less than 400, if you could share the same.
Satyen Mamtora: Yes.
Mehul Shah: Yes, I have the number.
Satyen Mamtora: Mehulbhai, please go on with the numbers.
Mehul Shah: Sir, roughly we have around 55% of order, which is having a high voltage class. 55% to 60% is a high voltage class, 400 kV and above.
Vignesh Iyer: Okay. What would that number be for Q2 FY 2027 out of the total executed number?
Mehul Shah: Roughly we have executed around 56% of the power transformer in this quarter.
Vignesh Iyer: Right. That is all from my side. Thank you.
Mehul Shah: Okay, thank you.
Satyen Mamtora: Thank you.
Operator: Thank you. Next question is from the line of Mihir Vyas from 9 Rays EquiResearch. Please go ahead.
Mihir Vyas: Hello, ma'am. Am I audible?
Operator: Yes.
Mehul Shah: Yeah.
Mihir Vyas: Hi. Thank you for the opportunity. I just wanted a clarification on our cash flow. Can you give some guidance from when can we expect positive free cash flow?
Satyen Mamtora: Mehulbhai, please.
Mehul Shah: Yes, currently, since we are into the stage of the capacity expansion as well as the backward integration, we are targeting end of this financial year to start reducing our working capital cycle days, that will give us positive cash flows.
Mihir Vyas: What is the internal target of working capital cycle days, if you could share?
Mehul Shah: It will be roughly 130 days.
Satyen Mamtora: It should be below 120 days. We are trying to reach at 120, and once we reach there, we would like to see close to about between 110 and 120 days this year.
Mihir Vyas: Okay. Thank you.
Satyen Mamtora: Thank you.
Operator: Thank you. Next question is from the line of Yash Gupta from Asit C. Koticha Family Office. Please go ahead.
Yash Gupta: Yeah. Good evening, everyone. Sir, I just want to understand on the inventory, how the inventory is moving now. Earlier in last two quarters, we have purchased lot of inventories due to the pricing disruption due to war going on. How are the things looking right now?
Satyen Mamtora: Things are looking sort of similar right now. But as you are aware that we are putting our backward integration plans. Also we have enough inventory until Q3 this year. So we are pretty much safely placed in terms of manufacturing and expansion of capacity utilization.
Yash Gupta: And is that the copper wires and all those things which we have purchased at a higher rate has been utilized and the billings and everything has been done? Or do you think maybe some impact will be there on margin in next FY 2028, FY29?
Satyen Mamtora: No, I don't think there should be any impact on the margins because FY 2028, 29, we should have our own backward integration plant fully functional. So we will see a slight advantage there.
Yash Gupta: Okay, sir. How is the competition right? Sorry.
Satyen Mamtora: Yeah, go on.
Yash Gupta: Yeah. My next question is on the competition. How is the competition intensity right now? Earlier we have seen a lot of competition intensity was there. How are the things going on right now?
Satyen Mamtora: See, like we said that we have close to about INR 21,000 crores order in hand, or inquiries that are pending to be finalized. We are pretty much sure. The competition per se, I don't see there is a huge price war or lowering of margins by competitors. Everybody has enough orders in hand.
Yash Gupta: Okay. This INR 21,000 crores which you are talking about, on which bid has been placed?
Satyen Mamtora: Yeah. On which the bids have been placed, inquiries are on, and they should be finalized in some time.
Yash Gupta: Okay. This INR 1,100 crores of order inflow in this quarter, it's anything, any exceptional thing, or do you think this will continue to flow in next two quarters also for this year?
Satyen Mamtora: Yes, it will continue to flow. Like we have been saying before, we are trying to limit ourselves to unexecuted order book first, not beyond 24 months or 28 months. So we are trying to keep that in check.
Yash Gupta: Okay. So this INR 7,000 crore will be booked in next 18 to 24 months. Is this correct?
Satyen Mamtora: Will be billed, yeah. Will be billed in next 18 to 24 months.
Yash Gupta: Okay, sure. Thank you, sir.
Satyen Mamtora: Thank you.
Operator: Thank you. Next question is from the line of Anubhav Mukherjee from Prescient Capital. Please go ahead.
Anubhav Mukherjee: Sir, just one question. There was a flare-up in prices of some of the key raw materials like transformer oil in the past quarter. How is the situation now?
Satyen Mamtora: There is a lot of echo in your voice. Can you please It's not very clear.
Anubhav Mukherjee: Hello? Sir, is this better?
Satyen Mamtora: Yeah, this is better.
Anubhav Mukherjee: Sir, just one question. Sir, in the past quarter, there was a flare-up in prices of some of the key raw material like transformer oil, CRGO and all. So how is the situation now sequentially?
Satyen Mamtora: Milind, please answer.
Mehul Shah: Yeah. So sir, the prices are still on the higher side. But we have a majority of order which is having a price variation clause. So mainly it does not affect our margin in a big way.
Anubhav Mukherjee: Okay. And sir, do we have some retention money for any orders we have?
Mehul Shah: Yeah.
Anubhav Mukherjee: Is that part of our balance sheet? Okay. Can you quantify that, sir?
Mehul Shah: It is the retention money.
Anubhav Mukherjee: Hello.
Mehul Shah: Roughly, yeah, retention money is always there in the order, so roughly it is 5% to 10%. It ranges from different customer, but it can be from 5% to 10%.
Anubhav Mukherjee: Currently, what is the total amount?
Mehul Shah: I need to check, but roughly it would be around INR 200 crore.
Anubhav Mukherjee: Get that. Thanks. I will get back into you.
Mehul Shah: Yeah.
Operator: Thank you. Next question is from the line of Deepak Poddar from Sapphire Capital. Please go ahead.
Deepak Poddar: Yeah, am I audible, sir?
Satyen Mamtora: Yeah, Deepak, you are audible.
Deepak Poddar: Yeah. Thank you very much, sir, for this opportunity. First, I wanted to understand, this Changodar expansion is expected to come next month. Just wanted to know what is the capacity there and what is the CapEx involved in this expansion?
Satyen Mamtora: The capacity is close to about 35,000 MVA. CapEx, Milind, how much was the CapEx?
Mehul Shah: Yeah. CapEx is around INR 150 odd crores.
Deepak Poddar: INR 150 odd crores. This will take our total capacity to 75,000?
Mehul Shah: Yeah.
Satyen Mamtora: More than that.
Mehul Shah: Yeah.
Deepak Poddar: Okay. What is the per MVA realization generally on an average? I understand it will be different for different type of transformers, but some average MVA per realization.
Satyen Mamtora: Milind.
Mehul Shah: Yeah. It is different for, say, power transformer, distribution transformer. On an average, we will be realizing around INR 7 lakh per MVA.
Deepak Poddar: INR 7 lakhs per MVA. Okay, understood. That is very clear.
Mehul Shah: Yeah.
Deepak Poddar: Sir, just wanted to understand now your all backward integration plan is expected to get completed by Q1, right?
Deepak Poddar: And that would effectively mean on this expanded capacity, 80% to 85% backward integration. Would that be a right understanding?
Mehul Shah: Yes.
Deepak Poddar: Okay. Understood. What sort of value addition we can have in terms of cost benefit or percentage to revenue? What sort of benefit we expect once all this backward integration plan comes in?
Mehul Shah: Sir, we are looking at around 200 basis point to 300 basis point margin expansion through this backward integration.
Deepak Poddar: This will likely come by, what, H2 FY 2028 or FY29, this improvement?
Mehul Shah: So you will see, firstly, it will cater the entire need of TARIL and then to the third party. So FY 2028 and then the FY29. So it will gradually increase.
Deepak Poddar: Okay. But the full effect will be seen by FY29?
Mehul Shah: Yes.
Satyen Mamtora: Yeah. Okay.
Deepak Poddar: Okay. Understood. And on this year, we are talking about 25% kind of a growth with a PAT margin of 9% to 10%, right? I mean, given the growth that we have done, are we being conservative here? Because we are already at PAT margin, I think, last two quarters, 11% plus, right? And we are still talking about 9% to 10% PAT margin for the entire year. So how should one look at?
Satyen Mamtora: Our target is to reach a growth of 25% and beyond. We are keeping our It is the same.
Deepak Poddar: Come again, sir. I didn't get you.
Satyen Mamtora: Our forecast is the same.
Deepak Poddar: You kind of maintain the forecast that you have been saying, 9% to 10% PAT margin-
Satyen Mamtora: Yeah.
Deepak Poddar: at 25% growth.
Satyen Mamtora: Yes.
Deepak Poddar: Okay, I got it. Okay, I think that would be it from my side. I would like to wish you all the best. Thank you.
Satyen Mamtora: Thank you. Happy Diwali.
Operator: Thank you. Next question is from the line of Vinil Shah from Dalal & Broacha. Please go ahead. Mr. Vinil, your line is unmuted.
Vinil Shah: Hello. Am I audible?
Operator: Yes, you are audible.
Vinil Shah: Yeah. Thank you for the opportunity, and congratulations on a great set of numbers, sir. I have two questions. First of which, if I could just get the proportion of exports in our order inflow and the revenues for Q2 FY 2027. Second was, if you could just give us some color about how much price rise have you taken in Q2 FY 2027.
Satyen Mamtora: You, please.
Mehul Shah: Yeah. So in Q2 FY 2027, our export is around 8% of the total revenue. In the order book also, we have roughly around 15 odd percentages with export. Mainly this quarter, this margin expansion as well as revenue, which has come from the higher capacity utilization of the Moraiya plant. So margins, et cetera, is on the similar lines, what we have guided, around 16 odd percent of EBITDA.
Vinil Shah: And sir, any price rise we have taken in this Q2 FY 2027?
Mehul Shah: No.
Satyen Mamtora: What do you mean by price rise?
Vinil Shah: Since the raw material costs have risen, since the rate has increased, like if we have passed on any cost to our customers.
Mehul Shah: Yeah. Price variation is always every quarter it is a phenomenon.
Satyen Mamtora: No
Mehul Shah: Every quarter, whatever we do the billing to the customer, we pass on the price variation also. This is not a one-time thing or anything, it is every quarter. Whichever billing we do, we also do the price variation billing also.
Vinil Shah: Yes, sir. I just wanted to understand that how much of the revenue growth can be attributable to the price rise.
Satyen Mamtora: You.
Mehul Shah: Roughly 7% to 8%. Yeah.
Vinil Shah: Okay. Thank you very much, sir. All the best, and Happy Diwali.
Mehul Shah: Yeah. Thank you. Same to you. Happy Diwali.
Operator: Thank you. Next question is from the line of Dilip Pandey from ICICI Securities Limited. Please go ahead.
Dilip Pandey: Hello, sir. Thank you for the opportunity. Just one question. Just want the production number for this quarter, MVA. Total production MVA.
Satyen Mamtora: You are not very clear. Sorry, you are not very audible.
Operator: Mr. Pandey, may I request you to please repeat your question?
Dilip Pandey: Yeah. Sir, I want the production number for this quarter. What is the production on MVA for the Transformers and Rectifiers (India)?
Mehul Shah: It is roughly 9,500 MVA.
Dilip Pandey: Okay. For this quarter, Q2?
Mehul Shah: Yes.
Satyen Mamtora: Yeah.
Dilip Pandey: Thank you so much, sir. Thank you.
Operator: Thank you. Next question is from the line of Jainam from Selftrade Investments. Please go ahead.
Jainam Vora: Congratulations on the great set of numbers. My question was on the CapEx that we are doing. Could you just help me understand, Changodar plant's existing capacity was 12,000 MVA and we added another 15,000 MVA, taking it to 27,000 MVA? Or was it in Moraiya? Because I am getting a little confused. Was it for medium voltage and renewable energy transformers, this capacity expansion?
Satyen Mamtora: Yeah. So Changodar, the manufacturing capacity was up to 12,000 MVA. Total manufacturing capacity at Changodar will be 35,000 MVA. Changodar will be producing distribution transformers, IDT transformers for renewable energy. Changodar will be producing small power transformers up to 132 kV, and Changodar shall be manufacturing large power transformers up to 220 kV.
Jainam Vora: Incrementally-
Satyen Mamtora: Apart from that-
Jainam Vora: Sorry to interrupt.
Satyen Mamtora: No, no.
Jainam Vora: Incrementally, 25,000 MVA is being added to the 12,000 MVA that we had, taking it to 35,000.
Satyen Mamtora: Yeah.
Jainam Vora: Capacity. Is that correct?
Satyen Mamtora: Yes.
Jainam Vora: Okay. The extra high voltage transformer, 22,000 MVA that we were adding, that would be in the Moraiya facility, and that would be large power transformers, and when will that commence production?
Satyen Mamtora: That will be EHV transformers. Once we have finished this Changodar project, we will start working on the Moraiya plant.
Jainam Vora: When can we expect just to get an idea?
Satyen Mamtora: Plus, what will happen with our insulation and pressboard plant coming live, the manufacturing place for insulation which was at Moraiya will now be added to transformer manufacturing unit. We will be adding about 30% plus manufacturing capacity at Moraiya.
Jainam Vora: When does this-
Satyen Mamtora: This 30% should be immediately once our pressboard plant is functional. Apart from that, what is going to happen, it is going to happen once Changodar plant is completely finished.
Jainam Vora: Diwali, Changodar plant would be completely ready. Post that, we will look at Moraiya facility. FY 2028 onwards, is it safe to say that the EHV transformer plant would be ready for production?
Satyen Mamtora: Yes.
Jainam Vora: Am I audible?
Satyen Mamtora: Yeah.
Jainam Vora: Yes. Okay, understood. That is my first question. My second question is on the INR 1,000 crore big order that we received from PGCIL, congratulations on that big order. What is the execution timeline, and what are the milestones given that is one of the largest single sort orders?
Satyen Mamtora: The execution timeline is about 24 to 28 months, and we should start commencing manufacturing off, I think, December next year.
Jainam Vora: December next year. Okay, understood. I just wanted to get an idea of what sort of capacity utilization that we are looking at this year and the next year, FY 2027 and FY 2028, particularly FY 2028 once both the plants are live.
Satyen Mamtora: Well, I would want a capacity utilization of about 90%, and we are constantly working, and we are constantly progressing towards that. But ideally, 90% capacity utilization is very good for a plant.
Jainam Vora: Will we achieve that in FY29, or are we confident of achieving that in FY 2028 itself?
Satyen Mamtora: We are working towards it. Maybe this year, maybe next year. We are constantly working towards it. Once our backends will be ready, we should be better placed to understand how it is going.
Jainam Vora: Got it. One last question on data centers, how is the opportunity? What are the orders that you are seeing? Particularly in the US export markets, are we in discussions with companies or utilities out there to provide our transformers? That would be very helpful if you could provide some color, both India and abroad.
Satyen Mamtora: Out of the 20% of the INR 21,000 crore inquiry, 20% is exports. Yes, we are looking at providing transformers within India and outside India. We are registered manufacturers for a lot of large data center facilities, so we have a preference there.
Jainam Vora: Got it. Congratulations and all the very best. Thank you.
Satyen Mamtora: Thank you. Happy Diwali to you.
Operator: Thank you. Ladies and gentlemen, in order to ensure that the management will be able to address questions from all the participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We will take our next question from the line of Abhijit Singh from Systematix Group. Please go ahead.
Abhijit Singh: Yeah, thank you for the opportunity. My first question is, what is the impact of the disruption in the Middle East on our business in terms of imports or exports or raw material or any other impact that we are facing?
Satyen Mamtora: Rohit, please.
Mehul Shah: Yeah. Due to this disturbance in Middle East, mainly our raw materials are not coming from that route. There is no as such major impact. But yes, the timely availability of certain critical raw materials is still an issue that we are trying to figure out by keeping a large inventory. As we spoke, we already have a high number of inventory till our backward integration plants are in place.
Abhijit Singh: Right. One thing I can observe is that we are guiding for 25% revenue growth for FY 2027, which means our H2 run rate of revenue growth is 20%. This seems to be conservative given the order book, the plant coming online by Diwali. I just wanted to understand is there any other factor which could be impacting our execution going forward? Because, after the plant is commissioned, I think we should be able to execute, because we have a large order book. A substantial part of the order book was there even by Q4 of last year.
Satyen Mamtora: See, all the orders that we are getting currently are for beyond 12 months. Not beyond 12 months also, they are beyond 18 months. All those will be executable in FY 2028, right?
Abhijit Singh: Right.
Satyen Mamtora: Right.
Abhijit Singh: So
Operator: I am sorry, Satyan sir, we are losing your voice.
Satyen Mamtora: Sorry. I will try. Mehmood please answer.
Mehul Shah: Yeah. So see, basically, can you just brief how you calculated that 20% because even if we go by our guidance, et cetera, we still need to execute around INR 900 odd crores every quarter going forward.
Abhijit Singh: That is right. Same calculation. So INR 1,800 odd crores you would require for H2 and then last year H2 was about INR 1,500 odd crores. So 20% on that is INR 1,800.
Mehul Shah: 1,300.
Abhijit Singh: Anyways, INR 1,500.
Mehul Shah: Yeah.
Satyen Mamtora: Yeah. I think we are maintaining our INR 3,200 crores. I think we are good at that.
Abhijit Singh: Understood. Understood, sir. Second question is on the HVDC repair order that we had. We were undergoing some repair from PGCIL, one transformer, and then we were about to enter into HVDC manufacturing. Could you update on the progress of that? How is it coming along?
Satyen Mamtora: We have already started the process of re-engineering that transformer.
Mehul Shah: Yeah. I just update. We are currently repairing the transformer. With that, it will be another four to five months' time. Then the successful running of that transformer will take another six to seven months. Then we will qualify for the manufacturing, and then we would start participating in the tender. At least one and a half year is away from when we are speaking.
Abhijit Singh: Understood. So five months of operation at our end, then we will give them, then they will test it for six, seven months, and then we are qualified for commercial orders.
Mehul Shah: Yes.
Abhijit Singh: Okay. Lastly, on data centers, are we supplying into data centers already or is there a plan or is there no plan?
Satyen Mamtora: If you ask Vijay, we are already a regular supplier to a lot of large data centers in India and abroad. We are constantly manufacturing transformers for data centers.
Abhijit Singh: Understood, sir. Thank you for answering the questions. I will come back.
Satyen Mamtora: Thank you.
Operator: Thank you.
Satyen Mamtora: Mehmood, can we take last few questions?
Operator: All right, sir. Next question is from the line of Divyam Sandeep Sureka from Nama. Please go ahead.
Divyam Sureka: Good evening, team, and thank you for the opportunity. Am I audible?
Satyen Mamtora: Yes, you are audible.
Divyam Sureka: Yes. My question is on the short-circuit test. We completed dynamic short-circuit testing for three transformers. Can you please help us with the type of these transformers and their kV ratings?
Satyen Mamtora: The audio is a little bit slow. I could not understand what your question was.
Divyam Sureka: Sure, sir. No problem. We completed dynamic short-circuit testing for three transformers. Can you please help me with the type of these transformers, whether they are power transformers, auto transformers, and their kV rating in terms of 220 kV, 400 kV?
Satyen Mamtora: These are 400 kV auto transformers. Sorry. Auto transformer, power transformers, yes. 400 kV and 220 kV.
Divyam Sureka: Got it, sir. And sir, who would be the customer? Any specific customer in mind that we need to target through this short-circuit test certification or there are general certifications that we need?
Satyen Mamtora: These are specifics for specific customers or electricity boards mostly.
Divyam Sureka: Okay, sir. Got it. Thank you.
Operator: Thank you. Next question is from the line of Vijay Basin from Enquad Equities. Please go ahead.
Vijay Bhasin: Hi. Thank you for the opportunity. I just have one quick question. If I look at your presentation, slide 9, what is mentioned is the revenue potential of about INR 5,000 to 6,000 crores post the expansion. To one of the previous participant, what you mentioned is about INR 7 lakh per MVA of realization. What we also understand from the industry dynamics is power transformer being at INR 5 lakh per MVA, distribution at about INR 10 lakh per MVA, and within high voltage, we are seeing pricing power being driven by the limited supply dynamics. Just wanted to double-check if you are still maintaining the $1 billion of revenue guidance that you have been targeting from the past three to four quarters over the next two to three years.
Vijay Bhasin: And second, a follow-up on this is whether you can see any spillover to FY29, but let's say 2030, 2031, and whether that would be requiring further CapEx, either via QIP or OPEX or debt raise that you would be funding. Because if I do the maths, at about 90% capacity utilization of 75,000 MVA, and let's say you are signing a INR 7 lakh per MVA, your top line sort of is getting peaked at INR 5,000 crores in one single year. I am not able to understand that. That is my only question.
Satyen Mamtora: You are only taking transformer sales. We are also looking at bushing sales, pressboard sales, CRGO sales. We are also looking at CTC sales, our tank manufacturing unit, which is going to be one of the largest in Asia. With all these sales adding up, we are pretty much sure we will reach $1 billion.
Vijay Bhasin: The timeline for this would be?
Satyen Mamtora: Mehul, please.
Mehul Shah: Yeah. It will be late part of FY29 or early FY30.
Vijay Bhasin: Fair. Would you also be requiring
Satyen Mamtora: A quarter here or there, but we are very much well-placed, and we are very much aggressive in reaching that target.
Vijay Bhasin: Sure. Would you also be requiring further funding for this?
Satyen Mamtora: No, Mehul?
Mehul Shah: No, because we are already doing this capacity expansion, backward integration projects, funding, et cetera, is already well planned. So, no additional CapEx.
Vijay Bhasin: Okay. The reason to ask that was, given your stretched working capital days, your PAT to OCF conversion is slightly subdued to whether if I compare with the high voltage peer group. So that's fair. Thank you so much.
Mehul Shah: Yeah, thank you.
Operator: Thank you. Next question is from the line of Sri Narayan Mishra from Baroda BNP Paribas AMC. Please go ahead.
Shrinarayan Mishra: Hi. Thanks for the opportunity. I just wanted to understand if we are executing any BESS transformer orders currently, and if so, how is the pipeline for BESS transformers looking like?
Satyen Mamtora: No, we are not currently executing any BESS pipeline. But yes, there are inquiries that are currently ongoing, and we are sure that in this quarter, we should get some orders for BESS transformers.
Shrinarayan Mishra: How big that market is? Any assessment if you have done?
Satyen Mamtora: It is a pretty much new market for us, but we are trying to assess the market.
Shrinarayan Mishra: Okay. The second question is on the CTC backward integration plant that was expected to be operational by Q2 end. Is that running now, and will we see some cost savings from Q2?
Satyen Mamtora: The plant will be-
Mehul Shah: It will be operational.
Satyen Mamtora: Mehul, please go on.
Mehul Shah: So plant will be operational from next quarter onwards, and it will take some time to stabilize, et cetera. From next financial year, we will start seeing some margin expansion coming from the backward integration projects.
Shrinarayan Mishra: I think CTC, last quarter, you guided for Q2 FY 2027 commencement. Now you are delaying it by 6 months.
Mehul Shah: No, we are not delaying. We are saying Q3.
Satyen Mamtora: So see, in Q3, before Diwali, the plant will be commissioned.
Shrinarayan Mishra: Okay.
Satyen Mamtora: Currently, the plant and machinery is being installed. By Diwali, the plant will be commissioned. In November and then in December, we will do the first trial runs. By Q4 this year, we should be commercially manufacturing CTC. But this CTC will be only for TARIL's transformers currently. From Q1 next year, we will see sales in the market also from the CTC plant of TARIL.
Shrinarayan Mishra: So 3,000 MTPA is the capacity. Of that, how much would be consumed captively?
Mehul Shah: Around 60% is captive.
Shrinarayan Mishra: Okay. Got it. Great. Thanks for answering.
Satyen Mamtora: Thank you.
Operator: Thank you. We will take the last question from the line of Sanjiv Jarbade from Antique Stock Broking Limited. Please go ahead.
Sanjeev Zarbade: Yes, sir. Thanks for taking the question and good set of numbers.
Operator: I am so sorry to interrupt. Can you speak a little louder, please?
Sanjeev Zarbade: Hello?
Operator: Yeah. Now you can go ahead, please.
Sanjeev Zarbade: Yeah. Sir, can you share the capacities of the various backward integration initiatives you have embarked on? You said about CTC, but about bushings, tanks, and regulators, what could be the capacity?
Mehul Shah: It is already available on the investor presentation that we have uploaded. On slide number, I will just give you the slide number also.
Sanjeev Zarbade: Right. And our other expenditures, despite-
Operator: I am so sorry to interrupt, Sanjeev. We are not able to hear you properly. If you are using any external device, may I request you to kindly use your handset mode, please.
Sanjeev Zarbade: Yeah, sure. Sir, the other expenditure has been largely static on a year-on-year basis, despite the significant increase in the revenue.
Mehul Shah: Right.
Sanjeev Zarbade: What is the nature regarding the other expenditure, and would it be in the same range as a percentage of sales?
Mehul Shah: Yeah, it would be in the same range because it is a multiple ledgers that is there into the other items, mainly like freight, then the traveling, rent, et cetera. Then the foreign exchange gain, loss, et cetera, that is there into other expense. It will mainly remain in that range.
Sanjeev Zarbade: And sir, regarding the HVDC transformers. Normally we have seen that the HVDC equipment packages have gone to Hitachi and GE Vernova. They are also doing, apart from the converter transformers, there is a lot of power electronics that is involved. What would be our strategy? Because if, let's say, GE gets the HVDC package, the converter transformer will also come from them only. Where do we stand so far as the HVDC converter transformer is concerned?
Mehul Shah: We are also in the process of getting the converter transformers approved also. I think within the next 18 months, we will be able to do the HVDC and converter transformers.
Sanjeev Zarbade: Okay. Okay, sir. That is it from my side.
Mehul Shah: Thank you.
Sanjeev Zarbade: And all the best. Thank you.
Mehul Shah: Thank you.
Operator: Thank you. Ladies and gentlemen, that concludes our question and answer session. I now hand it back to the management for closing comments.
Mehul Shah: Yeah. Thank you all for joining us today and for your active participation in the earnings conference call. We sincerely appreciate the continued trust, confidence, and support of our shareholders, investors, analysts, and other stakeholders. We hope we have been able to address your key questions and provide a clear perspective on TARIL's performance, growth plan, and outlook for FY 2027. Our focus remains on disciplined execution, timely delivery of commitments, and creating long-term value for all stakeholders. Should you have any further queries, please feel free to reach out to our investor relation advisor, Hansania, who will be happy to coordinate with us and assist you offline. Thank you all, and Happy Diwali to all.
Satyen Mamtora: Thank you, everybody. Happy Diwali to all, and see you at a better quarter next quarter.
Operator: Thank you very much. On behalf of Transformers and Rectifiers (India) Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your lines.
Mehul Shah: Thank you.
