Triveni Turbine (NSE:TRITURBINE) Q1 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Triveni Turbine Q1 FY 'twenty seven Earnings Conference Call. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to Mr. Gavin Deesar Thank you, and over to you, sir. Thank you, Steve. Good day, everyone, and a warm welcome to all of you participating in the q one FY twenty seven earnings conference call of Triveni Turbine Limited. We have with us today on this call, mister Nikol Soni, vice chairman and managing director mister Hassan Prasad, the chief executive officer mister Ashin Prabh, chief operating officer mister Rajat Agarwal, chief financial officer mister Manikhan Madhaji Zant, chief marketing officer, and miss Shreya Sharma, head of investor relations and value creation.

1:01 I'd like to now hand over to Shreya Sharma to share some opening remarks. Over to you, Shreya. Thank you, Gavin. Good day, everyone, and thank you for joining us for the company's Q1 FY 'twenty seven earnings call. I hope you all have a chance to review the results and then accompanying presentation uploaded on the exchanges and on our website earlier. Our discussion on the call will follow that presentation. Before we begin, I would like to remind you all that some of the statements made today may be forward looking in nature and are covered by the disclaimer of the earnings presentation. Joining me on the call today is the senior leadership team, who will take you through these key business developments and performance for this quarter. After the remarks, we will open the floor for the questions.

1:47 With that, let me hand it over to our Vice Chairman and Managing Director, Mr. Nikhil Sohani. Over to you, Mr. Auni. Thank you very much, Shriya. Thank you, Gavin. A very good afternoon, ladies and gentlemen, and thank you for joining the Q1 FY 'twenty seven earnings call for Triveni Turbine Limited. As we had anticipated, the quarter remains challenging. Revenue from operations came in at INR 4,430,000,000, up by 19.2% year on year. Domestic sales grew by 27.4% to INR 2,400,000,000 and exports grew by INR 10,800,000,000 to INR 2,030,000,000. Taking the export share in revenue to 48.8% against 49.3% in Q1 FY 'twenty six, a reflection of the stronger domestic contribution this quarter.

2:33 Profitability, however, was softer in the quarter. EBITDA stood at INR797 million at a margin of 18% against 25.8%, and a profit before tax of INR697 million was down to 20.1% of revenue was down 20.1% at a margin of 15.7% as opposed to 23.5 at the same quarter of the previous year. The execution in this quarter reflects the business environment and order intake of roughly a year ago. So the softer order mix of H1 FY 'twenty six has carried through to Q1 FY 'twenty seven profitability.

3:19 Delivery phasing of certain strategic orders have also added to the softening of margins. With deliveries spread across quarters and this quarter's revenue, including the balance brought out scope of certain projects, a majority of this would be taken care of within the first half of this year. We remain optimistic on growth of both profit as well as revenue for the full year FY 'twenty seven, which will, of course, be back ended as suggested by the note. The balance sheet in this quarter has also improved even though we are not reporting it. The difference between Q4 FY 'twenty six and Q1 FY 'twenty seven is a reduction in receivables and therefore a reversion to negative working capital and an increase in the cash balance of the company.

4:09 On the order booking front, the order booking for the quarter stood at INR 5,680,000,000 as compared to INR 5,360,000,000 in Q1 FY 'twenty six, a growth of 6.1% year over year, an increase led entirely by exports and aftermarket. Exports order booking grew 53% year over year, accounting for 68% of the total order booking as against 47% in Q1 FY 'twenty six. Reflecting continued traction and momentum Can I ask someone to put it on mute because there's a rework coming on the? Yes, I understand. You can proceed. As I said, export order booking grew quite healthily and accounted for 68% of the total order booking as opposed to 47% in Q1.

5:01 This reflects our continued traction and momentum across Southeast Asia, Africa and Europe and across segments such as biomass, waste to energy, in addition to the conventional segments. The share of aftermarket order booking increased to 39 of total order booking compared to 27% in Q1 FY 'twenty six, a growth of 54%. Domestic and product order booking witnessed a slowdown during the quarter, lower by 35.411.6%, respectively, on a year on year basis. The higher share of exports and aftermarket orders reflects the continued strengthening of our business mix. It is improving the quality of our order book and shifting the portfolio towards better margin offerings, which should support the profitability as we execute those orders.

5:48 The overall order book also witnessed an improvement. Our international expansion strategy coupled with continued innovation and entry into new product segments has yielded encouraging results. The closing order book stood at INR21.8 billion as of the June 30 as compared to $20,740,000,000 a year ago, reflecting a 5.1 year on year increase. Export order booking accounted for 57% of the closing order book. The aftermarket business also continued to gain strong momentum with closing orders increasing 115% year over year to $6,240,000,000 on the back of contract wins in the geothermal and utility segments and continued traction in the refurbishment and performance optimization solutions, which contributed 29% to the closing order book.

6:37 This performance underscores the company's agility in operating across geographies and sectors positioning us well to capitalize on emerging opportunities across geothermal, process industries, utility scale, refurbishment and renewable thermal solutions. And the growing global emphasis on energy efficiency and decarbonization coupled with renewable energy adoption and decentralized power generation continues to generate and create strong and sustained demand for our products. Having said that, as we look forward, the inquiry generation in the international market has improved, while the domestic market has seen weakness. As you know, we report our inquiries on a six monthly basis, and we'll continue to do that next quarter. While we can internally see weakness, we are optimistic that the domestic market will show some signs of recovery in the coming months as well.

7:29 During the quarter, our U. S. Subsidiary continued to receive healthy inquiries as well, and that's a market which continues to grow in both inquiry book as well as our optimism towards future demand for both products and aftermarket services from a very large market. Our focus there remains on strengthening the local service and product capabilities and deepening our market presence and building a strong firm footprint in The Americas. As highlighted in our previous earnings calls, we continue to invest heavily into research and development, and we continue to develop newer product ranges and newer lines, which can help expand our offering to our customers to ensure that we can utilize any heat or waste heat requirements that they may have to generate an effective return by either providing it for process requirements or towards generation of power.

8:19 This includes the development of our organic Rankine cycle developments, and we are keen to expand this in the coming year. Going forward, we're well positioned to sustain growth, and this is coupled with our digital offerings. As of this current quarter, we have actually transitioned the role and position of our COO to data business transformation to look at AI specific initiatives. This is a further reinforcement of what we believe the company needs to focus on in the future, which is to be extremely agile and focused on productivity while still ensuring that we're able to cater to customer delight and ensuring our product relevance to our customer base. Therefore, while this current quarter has exhibited the situation of how geopolitical uncertainties can bring volatility in both dispatch and order booking, I'm sure that you'll have more questions on why our margins have been what they are and where recovery would be. I'd rather take that in the question and answers than answer it right now. But suffice to say that the company is optimistic on the growth both in margins and absolute and on a percentage basis in the second half of this year. And as we look at the full year FY 'twenty seven, we are confident to exhibit top line and bottom line growth.

9:42 So with that, ladies and gentlemen, I'm happy to take questions and answers. Thank you, sir. We will now begin the question and answer session. You may press star and two. Participants are requested to use handset while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Our first question comes from the line of Amit Advani with PL Capital. Hi, thank you. Thanks for the opportunity.

10:30 My first question is, what was the impact of the NTPC order? I assume probably there was execution coming in Q1 also. So was there an impact there? And what is the quantum? That is my first question. And second, in terms of you have written about the, I think, cost push also. So what was the kind of contribution of impact from the commodity inflation also in this quarter? So your question is around margins essentially and how we've exhibited margins this current quarter. It's not a question of making excuses, but the fact is that they are execution of certain orders, especially on the export side, have gotten deferred by clients because freight rates have gone up between three to 4x. And those have gotten pushed from Q1 to Q2 to maybe Q3 even. And what ends up happening is that when you have a higher percentage of domestic execution as part of the revenue mix, that is, of course, depressing on margins to begin with.

11:42 Secondly, you have, as you rightly pointed out, a strategic order that we've taken on the NCPC carbon dioxide based energy storage project, which is a validation which is essentially meant to validate technology and to prove a use case for our equipment. This, of course, is taken at negligible and near zero margins. And so that does not contribute to profitability at all. I'll ask Prasad to comment a little bit about the quantum of the NTPC project, but you will have to know that the NTPC project is due for commissioning in Q2. And so we will have certain revenue in Q2 as well. But Prasad, can you give a little bit of idea about the NTPC project and domestic and other situation on margins?

12:28 Yes. So I'll put it like this before getting into the margin on the NTPC project, as VCM directly mentioned that this is one of the technology validation project because this is the first of its kind when it comes to the energy storage through CO2. So yes, we have taken this project knowingly. So this may not be contributing to the bottom line in the initial years. But once the technology is proven, it's going to bring a lot of value add. So the positive thing is that this technology where the pilot plant is running in Europe, that started giving a very positive results. And even site execution going at a faster pace. So probably by end of Q2, early Q3, it will come to a commissioning phase of this thing. So basically, since this we forecasted these margins, there's a real margin sort of getting from this. The major contribution is the share of not domestic orders in the revenue mix is increased.

13:27 That is that is the main pull down on the margin software scenario. So that way... So in addition to whatever international orders, couple of orders there because of the freight and the today vessels not availability, those things affected some of those planned export orders shifting to q two, q three. Otherwise, overall, we are quite confident. Overall, yes, there will be a positive traction in terms of revenue growth as well as the profit... Profitability growth. Right. Second question on the inquiry book. Last time you highlighted, think, roughly about 18 gigawatts for the global inquiries and domestic inquiry was about seven gigawatts. How that has grown?

14:12 And what is the primary reason for the domestic slowdown, any particular industry? Or are you seeing delays from the customers in terms of conversions of orders? Or if you could dig down more on the domestic side, yes, that would help. Yes. So we I hesitate to give you exact numbers and inquiries on a quarterly basis because the market does not move that quickly. So it's better to take it over a period of time. And so we will be sharing the numbers exactly on the six month and full year basis. But having said that, we see the international this continued strength in certain markets in the international market in terms of revenue inquiry growth, which includes The United States and Southeast Asia.

15:02 There's some green shoots in Europe as well. The markets in North Africa, Middle East are quite depressed. The South regions remains depressed. The Indian market has seen a decline, and that's broad based across all industries. But it's not a reflection of the conversations that we're having. An inquiry is a potential demand. So when we are having conversations with customers, it seems to suggest that the market is sort of flat. But even though the direct inquiries, which are part of our order inquiry book have come down in the domestic market. Sure. Lastly, you spoke about the top line and bottom line growth. So is there an expectation we are building that probably will be able to cross the double digit or it will be less than a double digit this year?

16:00 We don't give visibility to that extent, but the fact is that you've seen what we are a company that has to execute our order book. So the growth of our order book reflects what we have to actually execute. As we get into larger size orders, those have longer duration execution cycles. But suffice to say that we're quite confident of growth in this year. The team is all geared to execute on it. We, of course, still need certain book and bill of spares to come in, which has a shorter duration execution cycle. So a lot some of that will depend in the coming quarters coming months in terms of the order booking. But again, we are optimistic based on our current order booking and order book size on the growth anyway. The extent of growth, I think, should be on the higher end of what you're suggesting.

16:54 Understood. Thanks, Nikhil. Thank you so much for answering my questions. Thank you. The next question comes from the line of Ravi Swaminathan with Abendis. Please go ahead. Hi, sir. Thanks for taking my questions. My questions are also in a similar range to the previous question. With respect to the NTPC CO2 storage, how much of revenue contribution would have happened during 1Q? And given the fact that the duplicate commission in 2Q, how much amount of execution is likely to happen during that quarter? So if you can share that, that would be my first question. We don't give a real breakup of revenue from order to order.

17:45 But I think we had alluded at the end Q4 that we still had about INR 175 crores of the order to get executed. And it would be split, I would say, maybe 40% odd in Q1, Q2 and then the rest in Q3. Okay. Yes, please continue, Ravi. Yes. And this INR 170 crores will be largely the bottom right and is that understanding, right? I'm just trying to assess whether similar impact will be seen in 2Q also or in trend process. No, there's no see, cost escalations have already been forecast to whatever extent that they have been. And I think the previous caller also did allude to the fact that to what extent did cost escalations lead towards margin decline.

18:37 But it wasn't to such a large extent. The fact is orders were taken at a point in time when there was volatility in commodity pricing. So the commodity pricing was taken at that point in time itself and those margins, especially in the domestic orders, were already low at the point in time that we took them. So they've been executed in line with our expected margins. So none of this is coming as a surprise to us. This is pretty much the way it was meant to be. The only thing that has come as a little bit of surprise is in our export orders as freight rates have gone up three, 4x, the availability of vessels will become a little bit less easily available for our customers that as well as possibly certain site activities may not be have kept pace that customers have pushed out some of their dispatches that they need from us. And this largely happens on the export side only because the domestic market doesn't suffer from those same problems. And that has just led to a delay in recognizing revenue and billing that. So I feel that all of this will come back on track in a period of time because what is due to uncertainty has done is it's made everything a lot more volatile, where we thought that we would be lumpy on a half yearly basis, now it's come down to quarterly basis and monthly basis.

19:58 It's becoming I guess, for us to smoothen it out, we need to have a much larger order booking so that we can display that. But I think that this lumpiness will continue for a couple of more quarters, both on the positive and negative side. So you may have a negative quarter like this, but then you'll have positive quarters as well. So we shouldn't read too much into those positive quarters also. Understood. And with respect to the inquiry pipeline, I mean, or rather with respect to the domestic market, you had mentioned that commentary or ordering weakness has been there during this quarter. Is it just like the ordering finally taken is getting deferred a bit? Or is it that the inquiry level themselves have dipped a bit? Because in the previous couple of quarters, your commentary on the domestic market was relatively on the strongest side.

20:50 So just that the order finalization is getting delayed, and so why is it getting delayed? Is it because of the war and all these things that the domestic market... The customers are delaying order finalization? So I think the previous caller also had the same question. Let me answer. The inquiry book is a status of vague or general demand in the market. The order finalization themselves would translate into market share and then order booking. The decline in the inquiry book in the domestic market means that certain demand is just left to the market. But again, like I'm saying that this is if you start tracking this on a quarter to quarter basis, I think that but we've done it internally, it gives us the wrong impression in terms of the priorities.

21:36 I don't think it's a matter of concern if the market declines at 2%, 345% because the entire market is the entire inquiry book as we reported at the end of last quarter is so large that it is several times annual demand in the domestic market anyway. Understood, And I... But let me ask Prasad to comment a little bit about this as well and maybe you could bring in Mani, Prasad. Yes, sir. Yes. In domestic market, yes, the inquiry pipeline suddenly in previous quarter, we have seen a little slowdown on that. Even order finalization, experienced little longer registration periods, means customers not concluding the orders immediately like earlier quarters.

22:22 But even in a domestic customer just waiting and watching. But by considering whatever opportunities which are open for finalization, we feel that it should bounce back. Mani, you want to add any specific points, please? Yes. Now in our kind of a business for the product, the gestation period is anywhere between six to twelve months. Now the orders will get finalized in this quarter are the ones for which the inquiries were received six months or twelve months earlier. Now the trend what we are now talking is with respect to the inquiries, which we have received in this quarter, there has been a softening, but this would be the order gets finalized much later. So what is more important is for the current few quarters is what the inquiries we have in hand and the inquiries which we are receiving is going to be getting finalized few quarters later.

23:16 Now on the inquiry finalization, we do see the numbers as well compared to last year. Though the inquiry generation for this quarter, there is in the domestic market, there is a dip. This is how I would conclude. And my final question is with respect to the progress in growth in the API turbine and also in The U. S. Market, the status of providing after sales service to customers and also possible supply of trust to customers? Mani, why don't you take that as well? Yes. In terms of API business, we see a lot of traction with a number of thermal power plants coming in India.

24:02 We see a lot many things happening. And also with the oil and gas, especially while there are opportunities, which we are seeing because of the ongoing geopolitical tensions, the decision making is getting deferred. Though there is a potential and there is it's only a matter of finalization, which is getting delayed, I would say. We are also now looking at oil and gas opportunities not beyond the Middle East market in Americas as well as in European countries. In this particular quarter, we have secured API business orders from Europe as well. This is on the API business. Now with respect to The U. S. Market, we see lot more traction.

24:49 Now there is a huge scope for data centers and the last few years they have been predominantly being powered by the gas turbines. Now with the ongoing demand for gas turbines, the delivery is anywhere between three to four months, four years to five years. So we see the company is going towards the other modes like conventional route, combined cycle, then we're also seeing small modular reactors. So there is a lot amount of traction. We see number of inquiries from the American market, and it's only a matter of time this gets converted. Yes. Thanks a lot. I'll come back in the queue.

25:38 You. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question comes from the line of Mohit Surana with Monad Networks Capital. Please go ahead. You for the opportunity. So my first question is with respect to the bought out components. Out of the total COGS, can you give us an indication of how much would be the bought out component? And was there any price inflation in that which we were not able to pass through? We have a fixed price contract. So this is not a question of passing through price escalation. Unless a customer delays orders, usually these price escalations have to be absorbed at the point in time of in the contract itself.

26:31 Usually, we work on rate contracts. But I'll ask Prasad, maybe you could comment on the quantum or Lalit, if you're there, you could comment. Prasad, maybe you can start first and then you could bring Lalit in if necessary about quantum of BOP. I would suggest you be a little vague rather than than give an exact number, please. Yeah. Yeah. Yeah. So ways I will address this thing. One is as we said, we mentioned that these are all fixed contracts because as far as the customer is concerned, it is locked fixed locked price. So during the execution, if any commodity price increases there, that is a that is a risk what we carry along with us. Suppose if the volatility is too much, then sometimes that hits. But in the beginning of when we are picking up the orders, we also monitor this very carefully. So in majority of the cases, that is a de risked appropriately costing some contingency sort of a thing. Then order to order part of item percentages changes.

27:29 The scope customer to customer, he changes. There is no standard scope between two contracts. So this is... The variation is to a large extent, sometimes about a percentage, maybe something like a something 40%, sometimes maybe 60, 70%. Then we cannot generalize that. Again, that also quarter on quarter, the way how delivery takes place based on the readiness, that mix also changes. Lalit, you want to add some points on that? Yeah. So there's no fixed percentage with respect to the balance of part which is in procure. So it varies from order to order between 30 to 70%. Yes, that is what we'd like to mention. Understood, sir. So my next question is with respect to the R and D initiatives that we have been taking in the past with respect to the new products, heat pumps, mechanical vapor decompression, any traction on that that you can share with us right now?

28:30 Yes. Praful. Can you please comment on both of these are areas which really do allow our capabilities as a company to be brought to the front. Some areas like heat pumps, when we combine them with steam generation end up having greater industrial applications. But so you have to look at them in sequence of development. But Prasad, maybe you could just give an overall impression on these two current product lines as well as future product lines that we may be developing. Yes, sir. Yes. So heat pumps, basically, as a company, we are not seeing a heat pump as a stand alone product. We are looking overall solution.

29:17 So basically combining heat pump along with MVRs. So this gives a total solution to customers. Basically, customers where there's a low pressure, low quantity steam requirement. So this combination can replace a small packaged boiler sort of a business opportunity in there. So as as some of you are aware, so we created a demo unit for heat pump and some of the MDR orders which are under execution, that initial orders. So we are confident this combination going to okay, it is taking time and it will take time because this is a new technology and some of the customers want the experience of this combination giving the desired results in terms of efficiency, in terms of return on investment, all those things. These are initial phase of not pushing the product, pushing the solution into that. It is taking time. Otherwise, yes, these things are going as per plan, and we are confident this is going to bring a good value addition in near future into this thing. In the similar way, we continue to invest into new technologies and new solutions.

30:26 So when it comes to new technology and new solutions like the ORC, so we are in touch with customers. The inquiry pipeline is increasing from this thing. And that's also as a ORC solution, the customers looking for the power generation from low heat. So today, this is unaddressed market are largely under addressed market by majority of the players around. So that inquiry pipeline is increasing, and this market is across the globe sort of the thing, including Americas. So the other area where we are working very closely, combining the ORC with the geothermal combination sort of a thing. Basically, as our technology innovation, what we are focusing is rather than a product as overall solution, combining two products and finding a better efficient solution, cost effective solution.

31:17 That is really on track, and it's going to give a positive result in near future. Understood, sir. I think what is is a very important part. We're single product company, and as we add multiple products to our offering to one customer, that becomes more of a solution orientation. And we will do this incrementally without taking on sort of EPC responsibilities and the liabilities that come along with that. The point is to offer a better technical solution to our customers and ultimately give them a better payback for whatever they desire. Understood, sir. So just one last question, if you may allow. With respect to the consolidated EBITDA margin, we were somewhere around 20%, 22% that has fallen significantly this quarter.

32:05 As you explained, these are because of some specific reasons. But for H2, what kind of sustainable EBITDA margins going forward we can expect? Because now you have the visibility of the orders that you have taken and building that you would also have the visibility of margins that you would make. So if you can just throw I'm some into not going to be very specific on giving you a number, but I'll take you back to what we've always said as a company to our investors and on these calls, is that as a company, we believe that a PBT margin of over 20% is we can something maintain in the medium and long term. And so therefore, that is something that we will definitely reinforce.

32:54 Understood, sir. Thank you so much. Thank you. The next question comes from the line of Chirag Muchala with Centrum Roking. Please go ahead. Yeah. Thank you, sir. So, sir, first question is on the global data center opportunity that we had highlighted in the last quarter. So in q one, either for us or for other global steam turbine makers, has this opportunity started getting converted to actual order placement, or is this still in advanced evaluation phase? Mani, can I ask you to please answer this question? In terms of global data center, as I mentioned earlier, I was personally there in U. S.

33:45 Last couple of weeks. Now we have visited several customers. Now there is a huge demand. There is no question about it. There is a huge demand for data centers. Now so far, as I mentioned earlier, they were using gas turbine to speed up the process, so that the power can be generated as quickly as possible. Now, with the lead time for gas turbines going to four years, people are looking at other avenues to power the data centers. Now we have had multiple inquiries, there is a big there is a growth in the inquiry book from U. S. Same thing we also see in other parts where data centers are involved. Now it's a matter of they switching from the Gaster Bind to a conventional cycle or a combined cycle. So we are hoping it could translate in this year. We are hopeful.

34:45 Okay, sir. Second thing on the aftermarket service division. So in Q4 as well as in Q1, we have seen material rise in the order inflow. So if you can highlight if any specific areas like retrofitting or utility, power turbine orders, etcetera, for for this aftermarket solutions is part of this last six months? And is this a $1.50, $1.70 crore, you know, and kind of $2.50? I'm not trying to get an exact number, but can aftermarkets annual quarterly inflow be moderately higher than what we were doing so far? So the attempt is to have multiple avenues of growth for the business. The aftermarket business is reliant on two streams. One is our own installed base and the growth of spares and service to that. The second is refurbishment, which actually has a much larger market to based on the larger installed base of rotating equipment.

35:41 Now you've seen a very strong growth on the refurbishment side and exports. As we have invested in local capabilities, those take time to build up, And those are in certain areas such as gas turbine utility businesses, which provide long term and high margin a good margin visibility for the company, not only for this current year, but for coming years. Do you want to add on the outlook on this money for refurbishment? Yes. Now on the aftermarket, as Mr. Niguel said, now we have had a good translation of orders across the sectors, whether it be in across the region as well, be it in Southeast Asia or in Africa, there has been a good jump in African market.

36:35 And we also see some traction in India on the both sides. But on the sector wise, we have seen on the gas turbine as well as in the geothermal, biomass, the whole utility turbine, we are now getting into the utility segment on the high moving to a higher value addition in the utility segment from the industrial segment. So those are the ones which are coming in. So that is why you are seeing the values going up. Okay, sir. And sir, lastly, sir, you mentioned that some of the export orders have been deferred by one to two quarters due to logistics cost and freight rates rising significantly. So, sir, just wanted one clarification here. Are these freight rates and logistic costs, does it come under our preview, or does it... Is it something that the clients bear?

37:26 No. It is on the clients. That's why it... It's their it's their flexibility. Okay. So all export orders of ours, the logistics and freight rates are owned by clients? It's FOB. Okay. Okay, sir. Okay. Yes. Thanks. Thank you. The next question comes from the line of Amit Mehavan with UBS. Please go ahead. Hi, Nikhil. I have just quick two questions. First on the after sales traction that we have started seeing, some very encouraging numbers. If you can highlight in last two quarters when we won some 6,000,000,000 orders, broadly how much is that from North American region?

38:12 And if you can give some color and Prasad can add on what kind of size can we attain in next two to three years? That's my first question. Amit, you know that we've had a limited presence in The U. S. Market from a prospective installed base. Our attempt to invest in a facility and capability in The U. S. Was to first see how we could leverage the very, very large installed base that exists there from a refurbishment perspective and we set up capability. The fact is that The U. S. Market itself, given its federal structure and on the repair and maintenance work requires individual certification and licensing in states, it is a time consuming process.

39:03 So it has not contributed in any meaningful manner to our order booking in as far as what we've reported. The exact number is going to be less than 10% of the number that you would have suggested. So the growth that we are anticipating from the aftermarket side as well as new product demand from The U. S. Market is high. It just takes a little bit more time. The U. S. Market in terms of finalization of orders, especially in the steam turbine side for areas such as data centers, would take time. As you see, as Mani explained also, the first priority would be to go for gas turbines, etcetera. As those deliveries have gotten delayed, some of the inquiries that have come up fit very adequately within our product line. Similarly, on the refurbishment side, as we get better registrations and we get more visibility with our customers in terms of our capabilities, that builds on itself.

39:59 Why don't you add a little bit on this, Prashad, please? Yes, sir. So basically, now two, three areas where the aftermarket wise is one of the strong growth engine for us. As Mani mentioned that utility area is one of the biggest area across the globe, where over the years, we invested in our our technology development, and we started working in these opportunities. That is the one thing. Other opportunities where today customers asking us to support them on a gas turbine maintenance, repair and overhauling sort of a things. This is one more addition which is getting added into our refurb business. So as you know, as a refurb business, apart from steam turbines, so we we support rotating equipment. Some of the small compressors also, we do that. So these inquiry pipelines increasing across the globe. So going forward, as you are asking next two, three years as a company, we are very bullish on this because we we have all the required. The market reach is there. Now we we expanded our presence in across the rotating equipment that is steam turbines, that is industrial utility, then we entered into gas turbine space to repair and maintenance sort of a thing, compressors in a small way, we are doing that.

41:17 So this is an interesting area to watch for us. I can mention that way. Got it, Prashad. So maybe then mostly SADCs, what has driven the after sales, I can maybe conclude with what Nikhil also mentioned. Second and last question, Nikhil, is broadly in FY 2027, '28, how much of investment led loss will be there in U. S? And if Prasad can help us understand by 'twenty seven, 'twenty eight. Is 'twenty eight a year where we can be very well utilized in the American facility? That's it. Thank you. So of course, utilization of the U. S. Facility depends on the order booking. And while we're optimistic on growth on the order booking, both in the aftermarket and the product side, the product will only get executed in possibly in FY 'twenty eight.

42:13 So when we look at this current year, the utilization of the facility will be adequate. It will obviously not be at a high utilization level, but we look at the entity breaking even for sure. As you would imagine, even in the first Q1, we've got a substantial loss in the U. S. Subsidiary operations. But that was, again, as anticipated because the order book didn't exist. Prasad, do you want to add anything on the U. S. Operations? As you rightly mentioned that since the product side will be supporting from India, this is only from Refurb side, we are quite optimistic this year should be the breakeven year by seeing the inquiries because now the market reach is increasing. We are also targeting to make this year as a breakeven for U. S. Thank you. Thank you, Nikhil, sir, and good luck.

43:02 Thank you. Thank you. The next question comes from the line of Harish Subramaniam with Unifi Capital Private Limited. Please go ahead. Thank you for taking my question. The first question is just in terms of The US market. Typically, we see a conversion time line of inquiries of about six to twelve months, but obviously, you've discussed in the past that water permitting takes more time in The US. So what's the sense you have in terms of what the conversion of these inquiries would look like compared to our existing business? And as a clarification, our our understanding was the steam turbines can be complementary to gas turbines in a combined cycle. Is that understanding right?

43:50 So I'll start with your second question. Yes, that's correct. 50% of utility gas turbines that come up come up in a combined cycle format, 50% come up in a simple cycle format, either due to lack of availability of water or a variety of other constraints. But to answer your first question, Sorry. What... Can you repeat your first question again, please? Yeah. The first question was that, typically, the inquiry conversion, as you were discussing on the call, takes some of the twelve months. Yes. Yes. Yes. For The U. S. Market, Mani, can you answer that question in terms of The U. S. Market in specific? How do you see the inquiry conversion?

44:36 Is there anything that you can speak on a broad basis? Okay. In terms of inquiry conversion in U. S, what we have observed is it is more than twelve months. Having said that, we are seeing a lot of traction in this quarter and the next quarter. It. Once those get materialized, we will announce in the coming quarter. But we see tractions on the product. So the first thing in U. S. Would be the product would be the one which would get into the market. Then as we have built up shops and everything, refurb is the one where we are doing the qualifications, we are registering. So that is something which is would follow the product, order Okay. Got it. That's very helpful.

45:25 And just a second question is, I know we've discussed this a bit on the call, but on the margins, right, if if I back out about 40% of the $1.74 crores... $1.75 crores NTPC order, and if I look at the contribution that domestic makes compared to the past q ones of that by '25 or '24 perhaps. Right? It's been in the range of 46 to 49%, but we still managed in the past to deliver an EBIT margin... EBITDA margin of about 20%, and this quarter, it's somewhere around 15%. Right? So I'm just trying to understand, is this solely because of the bought out mix being higher or are there other elements that are affecting margins domestically? I'm just trying to understand how the margins did when the domestic level seems similar to Q1 of previous year. No.

46:13 So about a year ago, you had commodity price increases. At that point in time, we had taken orders as we do take orders based on our execution cycle. What has ended up happening is that there's been no reduction in BOP pricing. As you can see from our execution of certain orders, which were taken at lower margin, as you know, each order has different margins, especially both there's a generic there's a certain broad range of margins that you have in the domestic side, there's a certain broad range of that you have in the export side as well. So if you look at both of those, I think, in general, our pricing was lower for products that we're executing right now.

47:08 As we look forward as part of our inquiry book, the order booking margins are substantially higher. The rupee is also benefiting us. So we will have a double whammy going down. Actually, if you look at even our comprehensive income as part of our reported results, you'd be able to see the difference between the net income and the other comprehensive income, and you'd have an indication as to where margins will go in the future. Okay. So essentially, Q1 sorry. Go ahead. Q one last year, we took in margins... I mean, took in orders at a certain margin assuming certain commodity prices. And as we execute them now, the commodity prices have shot up a bit. So that's squeezing the margin at the moment. Is is that interpretation right? No. No. No. We we... When we take an order, we take it at fixed margin.

47:56 It's it's... I mean, it's it's taken at a fixed BOP cost. You know, there's certain things which are not fully finalized at this point in time of execution of an order. But broadly, we have an expectation of the margins going in. But those are the margins that were available at that point in time in negotiation with customers. And so that is what the market was offering at that point in time given our competition. It is a competitive industry at the end of the day. So what we get is what our competitors get. They may have a different margin structure, we may have a different margin structure. But that is what is available. And like I said, each individual orders is different. And they're taken for different reasons. Certain markets where we have a lower market share, we will price products differently. In certain markets where we have a higher market share and where we have greater customer acceptability, we will have different margins.

48:45 And they vary quite drastically, both in even in the domestic sector as well as export sector. But I don't know if that answers your question, Turbine, but that's the way we view it. Excessive you have because if you're taking the explanation that we have for this current Q1 and extrapolating it to future quarters, the certain BOP orders can be at a higher margin also. It doesn't necessarily need to be only because of what you suggested. Understood. Okay. Thank you. Thank you. The next question comes from the line of Turbine Nathu with Adenweiss Public Alternatives.

49:35 Please go ahead. Oh, yeah. Thanks, Nikhil, for taking my question. So the first question, Nikhil, is, you know, if you think about last two years, right, there has been one event or the other which has, you know, in a way disrupted our usual business, so to say. This quarter, it was freight. Last quarter or last year, you know, there was this domestic geopolitical issue, which led to customers not able to do the audit part of it. Right? So... And before that, if you think about the, you know, three, four years before that, it... There was a very smooth sailing, so to say. So what are we doing? Right? You you do... You you you... Just to ensure that, you know, this volatility in the business because these factors which are geopolitical, which are not in our hands, seems to be offering more often than not. So how do we ensure that the volatility in our business, assuming that geopolitics will remain where it is, the volatility comes down?

50:40 I think the only way to overcome that is by order booking. When you have a large enough order book, it's the only way that you can smooth out any volatility that happens both in terms of customer delays as well as in any other geopolitical situation. The fact that we are trying to expand our product range to be able to cater to a variety of different demand structures is hopefully will lead us to building that order book, which allows us to have that comfort. I think that that's the only way to actually, as a company, to weather these interruptions that are causing these geopolitical interruptions that are causing sort of volatility in both our execution as well as order booking.

51:26 Yes. Thank you, Mikhil. And secondly, on The U. S, specifically the data center inquiry and the small modular reactor inquiry. Now in the combined cycle where there is an opportunity for us, You you... I think some... Somebody on the call mentioned that you are expecting an inquiry to get converted into orders sometime in this year. So just want to understand in terms of product approvals, are the approvals in place, And how is the competition, right, in the combined cycle? And also on small modular reactors, there also do we see some traction happening this year in terms of inquiries going down to order book? So firstly, on the competition in the combined cycle, of course, there's competition there.

52:19 This is a competitive space, but there aren't many manufacturers. We only include inquiries in our inquiry book where we are qualified. So otherwise, the inquiry would not be given to us by a customer. So we're talking about orders where we are quoting and where we are engaging with customers. Now Prasad, maybe you can just add a little bit on to the competitiveness as was alluded to and how we see the market developing in this current year, especially in The U. S? Yes. Yes. So U. S, two ways, what we are seeing is, one is as as it is mentioned, we are qualified by all the consultants and OEs and VCCs. That's the reason why they are giving the inquiries.

53:06 Now what we are seeing is, as Mani also mentioned that, now today, gas turbine delivery cycles are quite long delivery cycles. So now they want the power. So what people are also doing is now starting the bottoming cycle. That means using a steam turbine, firing the firing the gas in a gas fired boilers and start generating the power. So this traction is increasing. This is a space where we can play a bigger role. And competition wise across the globe, we compete with the same players across the globe. So we are competitive in rest of the world. Obviously, we will be competitive in America. And over and above, the local presence with our workshop gives the confidence to the customers. So this is a narrative on which we are building, and we are bringing the confidence to the customers.

53:54 So the inquiry pipeline started building up. As Manu mentioned that, we are quite optimistic. And in some cases, we have quite plural to the final commercial discussion sort of a thing. So this year should be a little positive results we are expecting on the product sales side and followed by a refurb and now overall opportunities. And can you also touch upon the small modular reactors, where are the similarly in the journey? These very long. Please help me, sir. Sir, these these are the long gestation periods because these are technology because we are we are working with some of those EPCs and developers sort of a thing. These are at the inquiry stage.

54:42 So we are working very closely with them. It may take a little more time because this is from concept... First of its clients. Now somebody has to come with a module in such a way that is the mobile module, sort of, I think, the concept to what in US people are working. We are working with various developers very closely by, you know, finding the right configuration on that. It might take a little time compared to the combined cycle applications for data centers. Thank you so much, and all the way, West. Thank you. The next question comes from the line of Subhi Gupta with TRITURBINE Asset Managers. Please go ahead. Thank you so much for the opportunity.

55:30 Sir, my first question is you mentioned that the execution cycle is quite long for these large projects. So if you could just tell me what what is the execution cycle? It depends on order to order and scope. It's very difficult to determine that. But in general, smaller orders, less than 15 megawatts is maybe seven, eight months, 15 to 45 megawatts is about nine to twelve months, 30 to 45 megawatts is probably about fourteen, fifteen months and maybe eighteen months for 100 megawatts. Okay. So, Anja, next question is, what is the conversion date for Us pipeline to order book approx?

56:20 It's not something that actually comes out. The pipeline to order booking is dependent on the market. The only way that we measure it is through market share, which we report on an annual basis. Thank you. The next question comes from the line of Parikshit Gantpal with HDFC Securities. Please go ahead. Yes, sir. Hi. So first question is on the CO2 base. So I think earlier in the call, you said there has been some validation in the euro. So just wanted to understand how has been the response there in terms of round trip efficiency versus the best? And do you think that similar kind of success can be replicated in India and whether it will turn into larger inquiries and all things for you?

57:09 No. Of course, the attempt is for us to validate technology so that we can drive more demand. And we would not have picked it if the round trip efficiency and the life cycle cost were not competitive enough. The indications of the plant and its performance in Europe is very good and something that's appreciated by the customer. Now we have to prove it. Yes. And that's So do we have any exclusivity with energy domain in terms of technology, or it's open for all? So what what leverage do we have by taking this pilot in India? No. We have a very strong relationship with our technical partner. The nature of the relationship is something I'm not willing to discuss on the call.

57:55 But the fact is that we're committed to the market to approach it jointly. And second question around the up to 100 megawatts, I mean, now I think NTTP is about coming up with maybe smaller subcritical kind of packages up to two fifty megawatt. Do you think there is such a position if it does arise? So are we able to bid or upgrade to that megawattage level? Of course, we have the capability to manufacture to that level. Will we participate or not, I think, is something that we'll see. Prashad, do you want to add anything on this point? Sir, in this range, yes, just I want to say that we are qualified for that, but just we are to wait and see because the request for quotations, those qualification guidelines, we are qualified for that.

58:44 We have to wait and watch how these things will move further. Okay. Just the last question around the c two best. This validation will happen. Maybe the completion happens in q two or as a part of early part of q three. So once the... So how much time the validation takes? And when do we see more orders and more tenders coming in for this in the future? I I I think the question is a little premature. We'll... This is also a first of the time... First of a kind project that we're doing. So when we can actually establish validation of technology is something that I think is a little premature for us to determine both on time lines. And secondly, in terms of generation of demand, we'd have to wait and see what happens post validation.

59:35 Sure. But we are optimistic that this presents the market. Okay. Sure, sir. Thank you. Thank you very much. You. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for their closing comments. Thank you very much, ladies and gentlemen, for joining the call for Q1 FY 'twenty seven for Triveni Turbine. I realize that maybe all questions could not be answered. Please do take it up with Shriya, and we'd be sure to get all the answers to all of you. Again, the quarter was a challenging quarter. We're very optimistic, again, as we have explained on the call about the full year performance, which will be back ended again as it was last year.

1:00:29 Quarter on quarter, there will be volatility. There continues to be geopolitical uncertainty, but we aim to power through that given the diversified nature of our reach and our local presence in certain markets, which allows us to have for our size of company and to have a good export exposure and to keep pushing our global market share, which is a key driver of what the company aims to achieve over the coming years. Thank you very much. Thank you. On behalf of Triveni Turbine, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.