On the power product orders - if I exclude the INR900 crores data centre order, domestic orders are up about 20%. Sequentially we are in the INR2,000-2,200 crores ballpark. Is the 15-20% growth rate sustainable into next year for domestic transformer power products business?
The game has just started. INR900 crores is what we had to report because it was a substantial order but after that also the tap is open. There's so much of opportunity available. We are not going deeper into transformer or switchgear but overall for power we see a huge demand all over the world. On domestic specifically - that's also growing at a very, very fast pace. One year back we were at some 18,000, 17,000 MVA capacity for transformer, today we are almost close to 65,000 MVA. We feel as we meet the large customers or even the government companies in the utility sector what we keep hearing, give us more, give us more. It's like Amrit Kaal for power sector in India as well.
On motors, what would be the mix of IE3 and above in our overall FY26 volume and where do you see that growing in next 2-3 years? Does this change in mix help our margins?
I'm not allowed to give exact numbers of IE3, IE2, IE4 numbers but it is not very substantial at this point of time because even though we talk about energy efficiency, the Indian market is a bit slow on adoption of IE3, IE4, IE5 technologies. It's going to pick up in next couple of years as government is tightening and the need for energy is increasing. Our R&D and development is also accelerating to have the complete portfolio of IE3, IE4 motors. It's not very big in terms of percentage of the overall portfolio because of market side, not because we cannot supply.
Could you give us an update on the power transformer capacity expansion timelines? And on the export business - what has been scale of exports for Power Systems and Industrial Systems in FY26 and outlook for FY27?
On transformer capacity - we have completed the brownfield expansions both in Gwalior and Bhopal. Gwalior facility capacity increased from 6,000 MVA to 10,000 MVA and Mandideep, Bhopal facility - as per capex plan capacity increased to 40,000 MVA first and then with lean consultant the capacity grew to further 65,000 MVA at the end of last year. Greenfield plant erection is in progress and we hope to commission the plant somewhere between July and August - initially starting with 25,000 to 30,000 MVA and by end of this calendar year touching peak of 45,000 MVA. So as of now totaling Gwalior and Bhopal we have 75,000 MVA capacity and another 45,000 MVA to be added by end of this calendar year - around 1,10,000 MVAs by the end of this calendar year. (Amar Kaul on exports): we would not give the split of exports by business but yes exports and services is a focus area for us. Both areas we have more than doubled our order bookings between last year and this year. We have much larger aspirations.
Could you give us a sense of the addressable market on the GIS side in the 475kV category domestic/overseas - how do you think through the addressable market for yourself?
Not getting into specifics of details of GIS today - the overall spread today would stand close to about INR12,000-odd crores as a market total of which around 24%, 30% still would be GIS rest could be an AIS figure - that's the quantum potential addressable market we could be aiming at in the future.
One of your peers was talking about moving on the HVDC side. Is there a plan that the company has? What milestones to achieve to reach that level of capabilities?
We're still at the infancy stage. We have laid down a bit of roadmap on that, but the plan is not fully mature. When we are ready for it, we'll surely share.
On semiconductors - you made a recent investment of INR50 crores in EdgeCortix. Could you talk about that and how to think through investments inside semiconductor design from there on?
These investments - we are looking at the retail pipeline of candidates on potential M&A to keep building on our design capability. The first step was on our design capability, but that's not where Axiro stops. The investment you see is just one step forward in that direction and especially with AI coming in, the technology is changing every day. You will see more and more of these investments coming into even the start-ups or these kind of companies where we will get to have the latest in the world that is happening.
On power system exports - how soon can we expect grid utility turnaround for us on orders from American grid utilities? Six to 12 months or longer?
It purely depends. America works very differently than India. America has 478 utility companies because every area is divided and even if I take top 100 utility companies that amounts to about 70%-75% of the total revenue - every utility is pretty independent. Everybody has different timeline so you cannot categorize in six months or one year or three months or five years. It will vary from utility to utility.
On industrial - we have very formidable competition from Nidec or WEG etc. who are aggressively expanding manufacturing in India. In fiscal '27 do you think delta for us on profitability and growth is more on rail part of industrial as we execute propulsions and G.G. Tronic's book? Or industrial motors also contribute significantly to profitability in '27?
These are different verticals under the segment of industrial. Rail is a separate vertical which is led by Dhananjay - he's doing some good work to turn it around to make sure that it's coming to much bigger number the way Jatinder did turn around for motors business. Railways also in next few months or quarters should be inching upwards. It's a combination of both. On competition - competition is always healthy because it keeps us on the toes. We are honing our skills on keep building NPDs, building our design capability, and making sure that we are cost competitive, not cheap but cost competitive.
On railways excluding G.G. Tronics - what's been the growth rate in revenues for FY26 and outlook? On US transformers pipeline - any L1 status and what's the size of opportunity in medium term? And FY27/FY28 capex numbers?
The breakup we don't give, it's part of industrial business. We are not allowed to give the breakup of each of the businesses. We don't go deeper into each of the businesses. On railways outlook - Dhananjay Bapat added: On railways we see a sizeable potential with some of the new products we are working through. We also see some good opportunities on the export side which we have still to explore - long way to go. On the service side is another area where we see good potential for high double-digit growth which helps us improve our profitability and margins.
On railways business - while you don't give breakup between railways and non-railways, could you give some direction on margins on railway business given pressures in competitive railway business?
In India railways you won't be able to get too big a margin. Important is your operational efficiency. Second lever Dhananjay has activated is services. Service is going to be a big function - he's already created that vertical and is getting driven - that will give us substantial increase in our margins but it doesn't happen tomorrow, it takes a bit of time. Another lever is NPD - that's where activation is on the R&D to get more and more new products that helps us to become more competitive. These are high-level actions being taken to continuously move this from single-digit margins to double-digit.
Good to hear double-digit growth in motors. How much is volume growth vs price-led? And how much more price hikes do you intend to take in the motors business given the current inflationary environment?
On the motors side, it was a combination of the price increase that we got from the customers and a combination of about 50-50% of both and the volume hike as well. The volume hike is almost in sync with the market growth that we have seen but also we didn't let our pricing leakage also to happen. We keep a laser sharp focus on commodity inflation and take pricing decisions case to case basis - but we are also honing our skills on pricing discipline to ensure we are not having leakage by giving additional discounts.
On the balance sheet - what is the other financial assets item totalling almost INR3,000 crores in Q4?
Ankur, you know the QIP money which has come up so it is parked into the different asset class.
Can you help us with the G.G. Tronics order inflow and how did the year pan out in terms of revenue, EBITDA, and PAT and how do you see the order outlook in the segment?
G.G. Tronics order book is pretty strong right now - order backlog should be the tune of close to INR1,000 crores approximately. We are at the last leg of the approval process which is the passenger trials which is already going on. There are about as of today morning, 12 trials have already been completed and maybe another month, month and a half all these trials should be done. Then we start executing. On financials - Susheel Todi added: they are at INR100 crores at a full year basis and they are making money, they are not losing the money. They are at least around INR3 crores to INR4 crores PBT number.
Can you help us understand the receivable jump - I think it has jumped to INR2,900 crores from INR2,000 crores last year, up by 50% while top line is up 20%.
The growth which is coming mainly in the power segment - if you look at the return on capital employed on the power side it is more than 100% plus. So the receivables which are there today are coming more from the power side and the average credit period is ranging between 90 to 100 days.
On the GIS, we were in the development stage for 440 kV GIS. Could you share an update on its commercialization and also the development plans for 765 kV GIS?
For 400 kV GIS the plan is exactly on schedule. We have already tested phase one of our GIS portion. Phase two is scheduled between quarter two and quarter three. Once we have the type test done in any of these international labs we should be out with our commercialization for 400 kV GIS. 765 kV is on the conversation there. 2027 financial should see the commercialization happening for 400kV GIS.
Could you share an update on the drives business in terms of how much sales, assembly, value addition, localization that we are now doing in India?
Drives - there's a series of new product launches planned from April onwards. AMX Drives which is the next generation drives have already started getting launched. Low voltage drives is almost 100% indigenous; medium voltage percentage is not so high.
On motors and drive business - since the start of the war, how has the demand been from SME/MSME clientele? And what about demand holding up in India given gas shortage and fuel price increases?
For motors and drives our exports is not substantial today. Keeping out our European business for drives because that is primarily the European plant which supplies to Europe as well as US. There's not any specific dip or anything we see from these regions because of war or anything. We don't see the dip in India. In fact, with our GTM getting activated now with the senior leaders in place, we see improvement in the order intake.
On the transformer capacity - currently operational 65,000 MVA. How much will be 400 kVA plus capacity or is it fungible across all kVA ranges?
It is across all the ratings that we have. Even up to 765. In fact, we are now getting with the new plant coming in up to 1,200 also.
Is the addressable market only domestic or also includes overseas?
Exports as well as service remains our key focus. Whatever we are developing or whatever is under plan is both for domestic as well as exports for product development - whether 145kV GIS ranging to 170-245 as well as 400 are under plan for both domestic and international markets now.
On motors - is it fair to say that the worst is behind and we can see improvement in growth and margins from here? Through the last entire year how much price hike did you actually take? And comments on competitive intensity and market share?
How much price increase did we take - about all put together, it was 7.5%, so in total of 17.5% price increase that we did in the last 3 to 4 quarters and with decent realization. The team led by Jatinder has kind of maintained their market share in spite of such a steep price hike. We are blessed to be the market leader - the moment we do something like this, everybody has followed us. On overall LT motor side, we will be approximately 38%-39%. If I go to larger industrial motors, it will be around 19%-20% approximately.
On Power - the data center order delivery time was indicated 12 to 18-20 months. Is that the quickest you can deliver to US? Or can you do it much faster?
Delivery of transformers for the US market basically depends upon the delivery of the components like tap changer and bushings. Even though we can manufacture a transformer earlier than that, but we will always be dependent on the tap changer deliveries which come from Germany. They are anywhere between 9 to 12 months. So as of now, we are constrained, we can deliver from 12 month onwards only because of this reason.
On semiconductor business - chip revenue will start in two quarters. The INR500 crores currently booked into financials - is all of that design-led revenue or there is some other part?
This is the revenue which is coming from the company we bought from Renesas - the RF business from Renesas. (Amar Kaul added): Axiro is the name of the company that we created. RF business is what we bought from Renesas and that is what has started generating the revenue. It's about 65 million was the plan which comes to about INR500 crores. Because it is a running operational company that is the number you would have seen there.
Are we facing any impact of geopolitical issues on margins? Have we been able to pass on commodity price impact to customers - any impact on transformer oil prices or bushings? Color on Power Systems margin and FY27 outlook?
If there was stress on the margin then it would have shown up in the numbers. We are doing better by 200 to 300 basis points on each of these segments - that means the margin pressure is taken care of. This margin pressure is not only from what we get from the customer it's also how operationally efficient we are becoming. On commodity pass-through - for motors we have been able to pass on with steep increase in pricing. For other large businesses like transformer it's not a problem because you always have the price variation clause with the customer. Whenever commodity goes up and down it gets passed on to the customer.
On exports - what is the overall contribution to consolidated sales of exports this year?
It's very small - about 5% approximately but the aspiration is to be much larger. We kind of more than doubled in this previous year and this year we are taking much more ambitious targets. (Susheel Todi added): If you include Sweden, Germany, and Netherlands it can go up to 8% to 9% but if you talk about from India to outside country it is around 5% to 7%.