Operator: Ladies and gentlemen, good day and welcome to CG Power and Industrial Solutions Limited Q2 FY2027 earnings conference call hosted by IIFL Capital Services Limited. 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.
Operator: Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Ms. Renu Pugalia from IIFL Capital Services Limited. Thank you, and over to you, ma'am.
Renu Pugalia: Thank you, Nazneen. Very good afternoon, everyone. On behalf of IIFL Capital, we like to welcome the management team of CG Power for the second quarter FY2027 earnings call. From the leadership team, today we have with us Mr. Amar Kaul, Managing Director and CEO, Mr. Susheel Todi, Chief Financial Officer, Mr. Murray Liddell, EVP Drives and Automation and International Motors Business, Mr. Gaurav Makhija, Vice President, CGEOS and EPD Business,
Renu Pugalia: Mr. Dhananjay Bapat, Vice President, Railway Business, Mr. Jatinder Kaul, EVP, Motors Business, India Subcontinent, and Mr. Samit Khanna, Vice President, Consumer Products Business. With these words, I now welcome the management for the opening comments. Once again, Amar and the team, many congratulations for a strong result. Over to you for your opening comments. Thank you.
Amar Kaul: Thank you. Thanks, Renu, and rest of the team. Good afternoon, everyone, and welcome to the CG earnings call. At the outset, I am pleased to share that CG has continued to build on the growth momentum, delivering record high quarterly revenue along with margin expansion. Our Q2 and H1 performance reflects the continued strength of our diversified portfolio, disciplined execution, and continued focus on operational excellence, leveraging CG Edge, which is our operating rhythm.
Amar Kaul: Our Q2 sales grew by 32% year-over-year, and order intake grew by about 90% year-over-year, and profit before tax grew by 47% year-over-year, ensuring the positive leverage and also outpacing the revenue growth with about 180 basis points on the margin expansion. This makes it another one of the strongest quarter performance in the recent times.
Amar Kaul: Furthermore, orders remain robust with 90% growth year-over-year, and order books strengthened further at INR 21,820 crores, offering multi-quarter visibility for the organization. As I go deeper into the standalone performance, aggregate sales for the quarter was at INR 3,505 crores, recording a growth of 32% year-over-year. PBT had a growth of 47% at INR 602 crores, which is 17.2% of sales, as against INR 409 crores, which was 15.4% in Q2 in the previous year.
Amar Kaul: So 180 basis points better margin improvement year-over-year, primarily driven by the power systems segment, and also a contribution from our motors business as well. Return on capital employed annualized was at 27%. Order intake for the quarter was INR 8,016 crores, which is 90% growth year-over-year, and unexecuted order backlog as of 30 September 2026 was INR 21,820 crores, which is 61% higher year-over-year.
Amar Kaul: If I double-click on each segment, going to the industrial segment first. Strong growth across revenue and PBIT despite a dynamic cost environment. Aggregate sales for the quarter was INR 1,738 crores, which is 25% year-over-year, driven by strong growth across all the businesses. PBIT was at INR 164 crores, which is 9.4% of the sales against INR 135 crores in Q2 last year. Which is 60 basis points improvement in a sequential manner versus the previous quarters, driven by the margin expansion in motors.
Amar Kaul: Order intake for the quarter was INR 1,758 crores, which is 12% year-over-year, and unexecuted order backlog as of 30 September remains healthy at INR 2,856 crores, providing visibility for the coming quarters. If I double-click on the power systems performance, there was a strong growth and further margin expansion reflecting continued operating momentum and the robust demand.
Amar Kaul: The aggregate sales for the quarter was INR 1,769 crores with a sharp rise of 41% year-over-year, supported by the disciplined execution using our vehicle of CG Edge. PBIT was at INR 443 crores, which is 25% of sales as against INR 260 crores, which was 20.7% in sales in Q2 financial year 2026. 430 basis points improvement year-over-year underpinned by the strong price realization and better operating leverage amidst resilient demand.
Amar Kaul: Order intake for the quarter was INR 6,258 crores, which is under 37% growth year-over-year. And unexecuted order backlog as of 30 September was INR 18,964, which is 81% up, providing again the multi-quarter visibility. With that, we conclude deep dive into our standalone performance, and I will now move to the consolidated performance.
Amar Kaul: For consolidated results, it includes performance of our operating subsidiaries in Sweden, Germany and Netherlands, CG Resyn Products, which is based in Goa, CG Semi Private Limited, GG Tronics, Axiro Semiconductor, and other non-operating subsidiaries. Aggregate sales for the quarter was up at INR 3,802 crores and a growth of 30%. Profit before tax was 44% higher at INR 559 crores, which is 14.7% of sales, as against INR 88 crores, which was 13.3%.
Amar Kaul: Margin expansion led by strong power performance, partially offset by continued talent investments that we are doing in our subsidiaries like CG Semi and Axiro, which is a semiconductor business. And the impact of INR 35 crores, which is 91 basis points. Return on capital employment for the quarter was 25%. Order intake for the quarter was 78% year-over-year, at INR 8,485. And the unexecuted backlog as of quarter ending 30 September was 58% up at INR 23,646 crores.
Amar Kaul: Now, some of the key events that I would like to highlight is, post today's board meeting, CG strengthened India's power infrastructure manufacturing capabilities with the rollout of first transformer from India's largest transformer manufacturing facility at Sehore in Madhya Pradesh. On 4 September, the greenfield facility was made operational within 13 months and is spread over 50-plus acres.
Amar Kaul: This facility is India's one of the largest single location power transformer manufacturing facility, built for 220 kV to 1,200 kV class power transformers with the capacity to roll out 35 power transformers every month, reaching its peak. We are honored to have Honorable Chief Minister of Madhya Pradesh, Dr. Mohan Yadav, who graced the occasion of the first transformer rollout. Axiro Semiconductor, which is a wholly owned subsidiary of CG, acquired 100% of equity stake in Tosil Systems Private Limited for INR 16.4 crore.
Amar Kaul: The transaction was completed on 20 August and makes Tosil a wholly-owned subsidiary of Axiro. Tosil is engaged in the business of providing semiconductor and embedded engineering services. Company providing silicon design, verification, and physical implementation, embedded software and Linux BSP development with edge AI engineering services to global semiconductor and electronics OEMs.
Amar Kaul: This is a step forward in the direction of what I have been saying earlier, into building our competence and capability in the design capability of semiconductors. CG's existing manufacturing facility in switchgear business is witnessing peak capacity utilization. In view of the increasing order pipeline and growing demand for extra high voltage products, and in order to cater to the growing domestic and export demand, CG proposes to undertake the following capital expenditure projects. S1 unit, which is based in Ambad in Nashik.
Amar Kaul: The proposed project involves an investment of INR 300 crore to increase the manufacturing capacity of OIP bushings and instrument transformers up to 800 kV by 4,236 equivalent units per year, taking the total capacity of S1 unit to 11,436 equivalent units per year. The project will involve augmentation of manufacturing, assembly, testing, and associated infrastructure, with production tentatively expected to be commenced within 30 to 36 months.
Amar Kaul: S3, which is again at the same location in Nashik. Unit 2, phase II. Further to our disclosure dated 4 June 2026, we wish to inform that the board has approved an additional investment of INR 15.31 crore to enhance EHV circuit breaker manufacturing capacity by 3,600 units annually at S3 Unit 2 facilities, taking the total capacity to 10,800 units per annum. The proposed capacity addition is planned to be completed within a period of six to nine months.
Amar Kaul: Going to the GIS division in Vilholi. Further to our disclosure on 24 July 2026, we wish to inform that the board has approved enhancement of CapEx investment for the GIS brownfield at Vilholi, Nashik, from INR 35.14 crore to INR 44.62 crore, representing an additional investment of INR 9.45 crore.
Amar Kaul: The enhancement primarily provides for procurement of 800 kV high voltage testing system, along with contingency to enable testing of 245 kV and 400 kV gas-insulated switchgears. Approximately 90% of the project assets are expected to be transferred to the greenfield facility when it comes up and is commissioned fully. Accordingly, the capacity per annum will increase from 228 equivalent base last year to 468 equivalent base as it matures.
Amar Kaul: The above investments are part of the greenfield investment proposed for switchgear business, and the existing power transformer manufacturing facility, which we name as T3, is currently operating at its maximum capacity. CG has taken as part of CG Edge, the lean manufacturing initiative, and bases the work done by the teams there. The scope is to enhance the capacity by another 10,000 MVA within the same facility, taking T3's overall capacity to 75,000 MVA.
Amar Kaul: Given the current and projected order pipeline for the division, the board has approved the capacity enhancement. The total estimated project investment is INR 68 crore net of taxes. The project is planned to be completed within a period of 12 to 15 months and is expected to significantly enhance the plant's manufacturing capacity, enabling the division to meet the growing market demand and strengthen its competitive position.
Amar Kaul: That sums up summary of our financial performance and key events. Looking ahead, we remain focused on capitalization on the opportunities across power infrastructure, industrial manufacturing, railways, semiconductors, and while continuing to invest in technology, capacity, and capabilities.
Amar Kaul: We will maintain our focus on the profitable growth, execution excellence, and a long-term approach to value creation for all our stakeholders. With this, I conclude my opening remarks. The unaudited financial statements with detailed notes are available as part of the stock exchange filings and on our company website. Thank you for listening in, and back to you, Ms. Renu Pugalia, for Q&A.
Renu Pugalia: Sure. Now can we open the session for Q&A, please?
Operator: Okay. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question 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. First question is from the line of Pravesh from Abakkus. Please go ahead.
[Analyst] (Abakkus): Hello.
Amar Kaul: Yeah, Pravesh.
[Analyst] (Abakkus): Yes, thank you, sir. Thank you for the opportunity and conversation on the set of numbers. I just wanted to understand the new Sehore facility, when we said 35 transformers per month, is it our peak potential? What kind of transformer capacity, like 100 MVA transformer or 100 kV transformer are we? Hello? Hello?
Amar Kaul: Yeah, Pravesh, can you hear us?
[Analyst] (Abakkus): Yeah. Sir, I can hear you. Am I audible?
Amar Kaul: Yes, very well.
[Analyst] (Abakkus): Sir, I just wanted to understand when we are saying that this Madhya Pradesh transformer capacity at 35 units per month. I just wanted to know what specification of transformers are we talking about, and is that our peak output capacity?
Amar Kaul: Yeah, this is the peak output capacity, and as I mentioned in the notes, it is the transformers ranging from 200 kV to 1,200 kV.
[Analyst] (Abakkus): Okay. No, but when we say 35 units capacity, that must be when you are taking consideration of-
Amar Kaul: The way it is done is typically averaging it out. This is the order pipeline that we have. You take averaging out from the highest area, which is 1200 kV to the smallest one, and then average it out. Approximately it comes to 35. It could be 30 also, it could be 40 also, depending on what kind of orders you get. This is a ballpark kind of figure.
[Analyst] (Abakkus): Okay. Can we put it out in terms of total MVA produced in a month, or can we have an idea on that number?
Amar Kaul: Right now this calculation is based at approximately 70,000 MVA, because that's the direction we are getting into.
[Analyst] (Abakkus): Okay, sir. On the commissioning front, was it difficult or there have been any labor issue or skilled labor issue getting at the new plant at Madhya Pradesh?
Amar Kaul: No. You see, the labor skill issue will happen if we do not plan it well. We have been working on this project for more than two years, even before we conceptualized. So from all our technical people to everybody, they were all hired much in advance. Since we already have the existing plant, a lot of these people were trained on the job, in action, for almost six months to 12 months. So, all that investment has already gone inside the training and development of people.
[Analyst] (Abakkus): Okay, sir. Thank you, sir.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Ankur from HDFC Life. Please go ahead.
[Analyst] (HDFC Life): Yeah. Hi. Good afternoon, sir, and thanks always for your time. First, on the order inflows in the power system side, we have seen this very strong growth. I think typically you do about INR 3,500 crores of quarterly run rate. This quarter is closer to INR 6,200-odd crores. If you could just help us understand where and what is this order and are these anything recurring there? How are you seeing that here?
Amar Kaul: No, that is not recurring. I think it is a combination, and again, if your question is hinting towards is it specific to a sector or anything? No, it is not like that. It is a combination of if I look at the orders that have come in, it is from utility companies to your AI, to your data centers. So domestic exports, it is a combination of all of those. So it is not skewed towards one direction.
[Analyst] (HDFC Life): Sorry. I meant, is there any large order there? Any large, talking of INR 1,000 crore order there, or is it spread over?
Amar Kaul: No. It is not material. If it were material, then we would have informed the stock. So it was not material, but yes, larger size of orders, yes, were there, but not material that it justified reporting.
[Analyst] (HDFC Life): Okay. Then therefore, the last piece on this would be, can you sustain this kind of momentum given the pipeline that you have seen at this point?
Amar Kaul: It is the same thing. I keep saying every meeting, I keep saying that future is bright, so we look at it positively. So it depends, unless something is changing worldwide or which we cannot control. But yes, our efforts are on.
[Analyst] (HDFC Life): Perfect. Okay. Just the second question would be on the motor side. If you could just help, especially on the LT motors, which is our largest piece. What kind of price hikes have you really taken, say, over the last six, 12 months? How much more remains to be done? You did talk about some margin recovery on a Q1, Q2 basis, right? So how is that kind of shaping up? That is all to my side. Okay.
Amar Kaul: Yeah. So the price hike is a direct correlation of the way commodity has been increasing. So some of that has not been playing a good toward the favor of the industry. So we increased the prices upwards of 30% plus, in the last 12 months if I look at it. Will there be more increases? Immediately, I would say no, because you have to see how much the market is able to take and how much the commodity inflation is happening. So it is a pricing game technically that way look at. But I think what is important is, over and above price is also operational excellence.
Amar Kaul: If I see the good results done by the motors team, because there is fundamentally the work on CG Edge, on the operational excellence that we have been doing, optimizing our portfolio, eliminating the waste in the system, I think that is giving much more results than really the price increase. Price increase is directly only nullifying the commodity inflation. But the improvement that you see is coming purely from the work done by our teams in motors.
[Analyst] (HDFC Life): And just on margins in this segment, can we expect double-digit margins, given we have taken, I am hoping, a lot of the price increases have been taken here?
Amar Kaul: If you see, sequentially, we are improving consistently on at least 50, 60 basis points every quarter, and motors has already gone to double digit.
[Analyst] (HDFC Life): Okay. So it is more of the rail side. That is kind of where you have-
Amar Kaul: Yes. It's the same story that even last quarter I mentioned the same thing. Railways, I would say, is on flat or it might go down as well. That's a conscious decision. We could still be making the top line meet, but then we don't want it at the expense of bottom line. We'll see as we are progressing, our strategy work is happening on the railway side as well. We might take a bit of a step back on that instead of just worrying about the top line and bleeding bottom line. We are working on the technology upgradation and build all the capabilities that we don't have there.
Amar Kaul: You might see it a bit, of course, we don't declare it, but then I'm sharing what I'm supposed to share, is that, for a year or so, we will not have huge improvements in the railway side because that's the time we want to use to build our capabilities around technology and what is required for the market.
[Analyst] (HDFC Life): Got that. Okay, sir. Great. Thank you so much, and all the best.
Amar Kaul: Thank you.
Operator: Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants in the conference, please limit your questions to two per participant. Next question is from the line of Rahul Gajare from Macquarie Capital. Please go ahead. Mr. Rahul, you are not audible. As there is no response, we will move on to the next question. The next question is from the line of Umesh Raut from Nomura. Please go ahead.
Umesh Raut: Yeah. Hi, sir. Good evening, and congrats for a very strong set of results. My first question is pertaining to, again, power system order inflow. If you could help us with the number on domestic and export side separately, and what was the growth on a year-on-year basis, in domestic power system and export power system in terms of order inflows?
Amar Kaul: Yeah. Thanks, Umesh. Yeah, the orders are definitely strong, but, we do not give the split off between export and domestic. But yes, there is a good mix that the direction that we wanted, it is getting in that direction.
Umesh Raut: Hello. Am I audible?
Amar Kaul: Yes. Could you hear me?
Umesh Raut: So any color on year-on-year growth, at least on the export side, how it was during Q2 in terms of inflows and any color in terms of geographical mix as well, if you are seeing any traction in terms of export order intake from North America, Europe or any other market.
Amar Kaul: I can maybe give you a flavor of percentage increase. Quarter-over-quarter increase is about 200% for the exports.
Umesh Raut: Understood. And geographical color?
Amar Kaul: No, that I mean, you are asking me too many details, my friend.
Umesh Raut: Hello.
Amar Kaul: Yes.
Operator: Can you please use your handset?
Umesh Raut: Is it audible?
Operator: Yes, it is.
Umesh Raut: Yeah. My second question is pertaining to industrial segment, where if I look at subsidiary revenue number that has increased by about 10%. Is it fair to assume that we have started execution on Kavach order site or is it pending for the quarter?
Amar Kaul: Yeah. No, Kavach has not started yet, although their routine business is improving. But yes, Kavach should start very soon because most of the approvals are in place. We are just waiting for the final approval, so it should happen anytime now, definitely in the current quarter.
Umesh Raut: Understood. Thank you. Thank you so much. I will join back the queue.
Operator: Thank you. Next question is from the line of Harshit Patel from Equirus Securities. Please go ahead.
Harshit Patel: Thank you very much for the opportunity and congratulations on a great set of results. Sir, firstly, on our CapEx, I think we have already spent about INR 600 crore in the first H1 of FY2027, and you have announced another INR 400 crore of CapEx across various projects. On top of that, lot of greenfield and brownfield projects are already going on. Could you just summarize on what will be our overall CapEx for both FY2027 as well as FY2028? Of course, excluding the OSAT CapEx that we are already doing.
Susheel Todi: Well, if you look at our core business, as we spent this H1 around INR 550 crore to INR 600 crore, maybe another we are looking at some INR 300 to INR 400 crore for this another six months. So probably it will touch INR 1,000 crore for this year and next year, I think that remains in the similar range, around INR 700 to INR 800 crore.
Harshit Patel: Understood. This is excluding CapEx that is on top of it.
Susheel Todi: Correct.
Harshit Patel: Perfect. Sir, my second question is on Axiro. Could you help us with the H1 of FY2027 performance in terms of either EBITDA or the PBIT margin? I believe obviously much of the revenues of the electric industrial segment will come from Axiro only. So if you can differentiate the PBIT between OSAT and Axiro, that will be very helpful.
Susheel Todi: This revenue number is only coming from Axiro, and Axiro in Q2, they were at breakeven point.
Harshit Patel: Understood, sir. Sir, just lastly, just giving one on the consumer business, if you can give us an update, the revenue scale currently, and have we reached a breakeven level in this business or not yet? That will be my last question.
Amar Kaul: Consumer business, as you know, we restarted that a couple of years back. We are almost there because some months will be positive, some will be close to that. But net, it has been positive, but we have been reinvesting the money that is being earned back into the marketing. As you know, it is a B2C business, so we are reinvesting it back into the business.
Amar Kaul: Now we have the leadership change also there, we have a new leader joining in, Samit, who is on the call as well. He is looking at the overall strategy on this business, another additional product portfolio, any innovation that we can bring in. Excited to see how it is going to grow in future.
Harshit Patel: Understood. Thank you very much for answering my question. Thank you very much.
Amar Kaul: Thank you.
Operator: Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to two per participant. Next question is from the line of Sameer Thakur from Ambit Capital. Please go ahead.
Sameer Thakur: Hi. Thanks. Most of the questions are answered, but just on this Kavach part, I think there is still certification pending, right? Just on the timeline of execution. Will there be any risk of execution on Kavach if the approvals are delayed? Just give me your view on that.
Amar Kaul: Yeah. The risk I would say, I think, the basis where we stand on the project, I think this quarter we should definitely get it and the production should commence, including installation commissioning of these coverages. Worst-case scenario, to your question, if it goes, then definitely risk could be in terms of some of the orders may lapse end of next quarter. But it doesn't mean that it's lost kind of thing. It gets re-tendered and again, you will get it back. That could be the only but additional work. That's the only thing that I'm worried about.
Sameer Thakur: Okay. Thank you. That was all from my side.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Sumit Kishore from Axis Capital. Please go ahead.
Sumit Kishore: Thanks for the opportunity and my compliments on the strong quarter. My first question is on CG SEMI's G2 facility. What is the progress there? Are you on track to meet your timelines on commissioning? Could you give us some flavor of how the ramp-up is likely to happen over the next few quarters? Hope I was audible.
Amar Kaul: Oh, sorry. You are on mute. Can you hear me?
Sumit Kishore: Yes. Now I can hear.
Amar Kaul: On the G2, which is your question specific to G2, the construction is progressing well, and we are targeting the qualification to commence middle of next year and the commercial production, because it takes about two to three quarters to get the qualification done. I would say somewhere towards the end of 2028 or 2029 is where we should be seeing the commercial production.
Sumit Kishore: Okay. On G1, is there any sort of new customers that you have tied up or could you give us a flavor of how things are progressing for the initial pieces that got rolled out?
Amar Kaul: Yeah. That is a work that is happening in parallel. That is what business development team is continuously working on. As you would know, this qualification time is very high. But yes, the work is continuously on that.
Sumit Kishore: Okay. Just a repeat question on power system inflows, which kind of double.
Operator: Sorry to interrupt, sir. If you have a follow-up question, please rejoin the queue.
Sumit Kishore: Okay.
Operator: Thank you. Next question is from the line of Amit from UBS. Please go ahead.
[Analyst] (UBS): Hey, Amit. Hi. Congratulations on great set of results. I have a question on your overall capacity expansion and orders for that. Where are we in the journey of qualifications in US grid utilities? Do you think the ordering is already reflecting orders from clients in US who are large utilities, or will it take time to get qualified because that is a spread-out market, we need to go utility by utility. Any color on that?
Amar Kaul: Yeah, I think your question is absolutely valid, and that is a long-term work that is happening in parallel. As you know, it takes time. That is happening in parallel, but again, that is not the only thing we are banking on for the American market.
[Analyst] (UBS): Okay, fair point. My second question on industrial. A lot of emerging segment has a very different product requirement, a very different grade of motors and drives. For us, can I say right now we are because if you see the revenue run rate and the order run rate, I think pricing is double digit now for last 6 months, holding up.
[Analyst] (UBS): Right. I am sure I do not have the exact break of rail right now, if you can help us understand the growth rate in orders in industrial, X of rail. Do you think the industry short cycle improvement in volume and then pricing is enough for us to have a 20% kind of growth in this business in the next 12 months? Or do you think it is too ambitious a number?
Amar Kaul: Yeah. Yes. If you would have seen that NPD, which is the core to our business, we already accelerated for motors. We did not have the full range of IE3, IE4 motors, which starting with 3 August, was our first frame, 280 frame that we launched. Every 45 days, we are launching additional frame that is coming into the picture.
Amar Kaul: That will upgrade our whole portfolio over the next 9 months to 12 months. We should get upgraded to that. Then in parallel, we are also looking at advanced technologies, whether it is a permanent magnet motor or it is the IE5+ kind of motors, which will help us open the doors for export market as well. That work is absolutely happening, and we also have on the call our Chief Technology Officer who joined us recently. That is also to help us give a boost to our technology leadership in the market.
[Analyst] (UBS): Sure. We will wait for more color on industrial upgrading product. Thank you, Amit, and good luck.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Atul Tiwari from JP Morgan. Please go ahead.
Atul Tiwari: Yes, thanks a lot.
Operator: Sure.
Atul Tiwari: On the power systems margins, now you are hitting 25%, and previously you have alluded that margins will improve, so you have achieved that. Can margins improve from here as well?
Amar Kaul: Atul, I keep saying the same thing. Vision is always right. If you don't think positive, it won't happen. I think definitely, that's the intention where we want to get into, but it's not only the pricing game that comes from the customer, because customers will always have a threshold beyond which it will not go. I think important is, are we becoming efficient day by day, week over week, year over year? That's exactly where we spend a lot of our energy on. I am really hopeful that either maintain or go above these margins.
Atul Tiwari: Great, sir. My last question is on transformer manufacturing capacity. Just confirming, with this commissioning of this facility in MP, now we are at 75,000 MVA currently. Is that the right understanding?
Amar Kaul: Which one, the old facility or the new facility?
Atul Tiwari: The total transformer manufacturing capacity today, after commissioning of the new facility in MP, what is the current capacity?
Amar Kaul: See, the existing plant which we have in Bhopal, that is about 65,000 MVA. The new plant will start hopefully this quarter, should be about 10,000 MVA plus. Then you have distribution transformer, which is about 12,000 approximately.
Atul Tiwari: Okay. Thank you.
Operator: Thank you. Next question is from the line of Sharom Kapoor from Jefferies. Please go ahead.
Shirom Kapur: Hi, sir. Thanks for the opportunity. Just a quick bookkeeping question. What would be your order book right now in GG Tronics? Have you received any new orders so far here? Last quarter you had mentioned it is around INR 1,000 crore. So has there been any update there?
Amar Kaul: No, currently it is about the same, yeah, INR 1,069 crore approximately. That is at the moment we start shipping out, then it gets reduced. There are other tenders coming up, and we are looking forward it to be a positive side.
Shirom Kapur: Got it, sir. Just to follow up on the capacity, the new 10,000 MVA that you just announced, that will take your Bhopal plant up from 65,000 to 75,000, and balance you still have a 45,000 greenfield manufacturing facility coming up, right? Including all of that, your power transformer manufacturing capacity should eventually come to around 120,000 MVA. Is that correct?
Amar Kaul: Yeah, and still counting.
Shirom Kapur: Sure, sir. Got it. Thank you so much.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Lovish from Burman Capital Management. Please go ahead.
[Analyst] (Burman Capital Management): Hi. Thank you for the opportunity. Am I audible?
Amar Kaul: Yes.
[Analyst] (Burman Capital Management): Congratulations, sir, on the strong set of results. My question is regarding the new Sehore facility that we have started, I think, last month. I just wanted to understand, would we require fresh short circuit testing approvals from PGCIL for starting shipping from this facility, or would our existing approvals be sufficient?
Amar Kaul: That work is going on, depends on the customer and the country. Somewhere it is required, somewhere it is not required. It goes case to case basis.
[Analyst] (Burman Capital Management): Got it. Sir, what could be the timeline for getting that approval?
Amar Kaul: No, it is different. It is not. That is why I said it is order to order. So right now for our ramp-up plan on the order book that we have placed on the new facility, there is no bottleneck there.
[Analyst] (Burman Capital Management): Understood. Sir, recently, we also heard that DEC three has been approved. Just wanted a sense from you on how that impacts the overall demand scenario for us. Secondly on that one, I think going forward, the addition would be more in the intrastate segment. Also wanted to understand whether the intrastate would be more focused towards 400 kV category, while the interstate was more towards 765.
Susheel Todi: A mix of everything. Intrastate is more about acquisition.
Amar Kaul: We did not get your question. Can you be more specific on your question?
[Analyst] (Burman Capital Management): Sure, sir. Given that DEC three has been approved, firstly, I wanted to understand what would be the impact on demand for us from this approval. Secondly, would the mix of transformers change from 765 kV there in interstate towards more 400 kV in intrastate?
Amar Kaul: Yeah, it is across the board, and for us it does not matter whether it is 400 kV or 765, even up to 1200. We are fully equipped to cater to the whole range.
[Analyst] (Burman Capital Management): Got it. Thank you, sir.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Kishore from Fortune Wealth Management. Please go ahead.
[Analyst] (Fortune Wealth Management): Hi, sir. Congratulations on another strong quarter. My question is, with the new capacity addition in transformer and switchgear, could you share how much revenue they can add and when you expect it to start contributing?
Amar Kaul: Yeah. See, I think this will be linked to our business plans because the way we look at next year after coming in, that's why we are making these investments now. So we would prefer to execute and then you see where we are getting in. Our aspiration definitely is to keep high double-digit growth, so you can do rest of the calculation backwards.
[Analyst] (Fortune Wealth Management): Okay. Can you give me overall revenue growth guidance for FY27?
Amar Kaul: No, we do not give this forward-looking forecast.
Susheel Todi: Guidance, we do not give that, yeah.
[Analyst] (Fortune Wealth Management): Okay. Thank you. That is all from my side.
Amar Kaul: Thank you.
Operator: Thank you. Next question is from the line of Rahul Gajare from Macquarie Capital. Please go ahead. Mr. Rahul, you are not audible.
Rahul Gajare: I hope you are able to hear me now.
Operator: Yes.
Rahul Gajare: Okay. I will use this. I have two questions. First is on the power side. I want to understand if you were to get a 765 kV transformer order today, when is it that you can deliver it?
Amar Kaul: Do you have the RFQ for that? We will be happy to give you delivery.
Rahul Gajare: Sorry. I did not get you. What did you say?
Amar Kaul: That was on the lighter side. I said if you
Rahul Gajare: No, I did not hear you, only. Sorry.
Amar Kaul: Can you hear me now?
Rahul Gajare: Yeah, I can hear you. Yes.
Amar Kaul: I said that was on the lighter side. I said, if you have any requirement, you tell us, we will give you priority delivery.
Rahul Gajare: Okay.
Amar Kaul: Typically, it depends. 765 would be about 18 to 24 months.
Rahul Gajare: Okay, fine. That is great, actually. How much is export in the orders that you got in this particular quarter or in the backlog? We just need a color on export as the overall share in your backlog or intake.
Amar Kaul: Yeah, I think there was a similar question before you as well.
Amar Kaul: What I gave about the numbers, we cannot give you the split, but yes, the increase in order booking is about 200%.
Rahul Gajare: Okay, export has picked up. Now on the semiconductor side, I want to know how much is it that you have spent, from the total INR 7,500 crore. How much have you totally spent and how much is the money that you have received from the Government? Maybe Mr. Sushil Tohri can throw more light in terms of how are you accounting for it in your financials.
Susheel Todi: So you are asking, I do not know how many questions. So, okay. So first please, about the total investment CG has made so far is around INR 1,000 crore.
Susheel Todi: What was your second question?
Rahul Gajare: No, so total out of that INR 7,600 crore, how much is totally spent? So CG has invested INR 1,000 crore. So balance INR 6,600 crore is expected to be spent. Is that what you are saying?
Susheel Todi: No, because that similar money has come from the government as well. So INR 2,000 crore, almost INR 1,000 crore, we got that central government capital support. Right. So INR 2,000 crore we already spent.
Rahul Gajare: Okay, so there is no delay in terms of your spending and government money receiving. There is no.
Susheel Todi: Okay.
Rahul Gajare: So that is great. How are you accounting for this government money which comes?
Operator: Sorry to interrupt, sir. Should you have a follow-up question, please rejoin the queue.
Susheel Todi: Well, I can answer it. So maybe we just do the netting with our assets, so we report as a net number in our balance sheet.
Rahul Gajare: Okay, fine. Thank you very much.
Operator: Thank you. As that was the last question for today, I now hand the conference over to Ms. Renu Pugalia for closing comments.
Renu Pugalia: Sure. Thank you, operator. I would just like to take the last question for today's session, for Amar and his team. Well, for power systems, I think with the kind of capacity expansion, brownfield, greenfield that you have done, that should broadly take us almost 2x the revenue in the next two years. My question here is, we have done variety of initiatives on new product development in the industrial segment.
Renu Pugalia: What are we exactly doing to fill in the product gaps and to tap new technology initiatives in the power solution segment for us beyond the conventional power transformers, distribution transformers, and the switchgear portfolio that we have? That is the last question of today's session.
Amar Kaul: Okay, good. Thanks, Renu. A very intelligent question. So over and above industrial, you have seen already on the power side, over and above switchgear transformers, we are actually working on the power electronic side. I think over the next few quarters and years, you will see us getting ourselves deeper into the holistic solution over and above what we are already doing.
Renu Pugalia: And would it be largely organic, inorganic?
Amar Kaul: It could be anything, because we are looking at both.
Renu Pugalia: Well, on behalf of IIFL Capital, I would like to thank the team of CG Power for this conference call and giving us the opportunity and the audience for an interactive Q&A session. Amar, any closing remarks from you would be welcome. Thank you.
Amar Kaul: No, thank you. Thank you so much, Renu, and thanks everybody. Thanks, appreciate your questions and continue to support us and we will keep doing our hard work. Thank you so much. Have a good rest of the day.
Renu Pugalia: Sure. Thank you.
Operator: Thank you. On behalf of IIFL Capital Services Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
