CG Power and Industrial Solutions Limited (CGPOWER) Q4 2026 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the CG Power. Q4 FY26 earnings call hosted by IIFL Capital Services. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star, then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Renu Bet Mugalia, Senior Vice President, Research IIFL Capital. Thank you, and over to you.

Thank you, Vitesh. Very good evening, everyone. On behalf of IFL Capital, I'd like to invite the senior leadership team of PG Power and Industrial Solutions to discuss the fourth quarter FY26 earnings performance. From the management team we have with us today Mr. Amar Khan, Managing Director and CEO, Mr. Sushri Toli, Chief Financial Officer, Mr. Maray Nail, EPP Drives and Automation and International Motors Business, Mr. Gaurav Makkija, Vice President, Sanjeev and APB Business, Mr. Ajay Jain, Vice President, Transformer Business. Mr. Dhananjay Bapad, Vice President, Railway Business, and Mr. Jitinder Korn, EVP Motors Business, India Subcontinent. I now like to hand over the call to Mr. Amar for his opening comments and explain us how do we deliver such stellar performance in the business, especially power systems surprising yet again. Thank you and over to you, Amar.

Thanks, everyone. Team, good afternoon, everyone, and welcome to CG Earnings Call. I'm happy to share with you all that CG had another strong set of results for the quarter and year-ended 31st March 26th, reflecting our continued momentum powered by disciplined executions and strategic focus. This is a record fiscal year performance for CG in recent times. This is a short fiscal year with highest average stand-alone revenue, order book. Our Q4 26 sales grew by 22% year-over-year. PBT at 43% year-over-year with 260 basis points margin expansion, delivering a strong finish to a record year. And for the full year, our sales grew by 21%, PBT at 34% year-over-year with 143 basis points margin expansion, and again making it its strongest standalone fiscal performance yet. Further, the order flow remained pretty strong during the quarter with penetration intrudes. Taking the order backlog up 59% year-over-year to 15,719 crores and offering a strong revenue visibility for financial year 27. Now, as I go deeper into standalone performance starting Starting with Q4, the aggregate sales for the quarter was high at 3129 crores. Profit after tax was higher at a growth of 49% at 412 crores, which is 13.2% of sales as against 275 crores, which was 10.7% of sales in Q4 financial year 25. The quarter was at 27%, and order intake for the quarter was 4,505 crores, which is 23% growth year-over-year, and unexecuted backlog at the closure of financial year 26 was at 15,719 crores. Profit after tax was at 39% at 1,352 crores, which is 11.9% of sales, as against 9.74 crores, which was 10.4% of sales in financial year 25. Return on capital employed for the year was 22%. Order intake for the year was 17,574 crores. An un-executed order backlog as of close of the financial year was at 15,719 crores, which is 59%... Thank you. PVIT was at 157 crores, 9.6% of sales, as against 176 crores, 11.2% of the sales in Q425. Margin deviation is due to the mixed change and the competitive pricing in railways business, as well as higher MSR promoters due to commodity impact. But the discipline pricing, along with focus efforts on efficiency gains via cost and productivity programs, Over the last few quarters, help partially mitigate this adverse impact. Business continues to prioritize margin expansion through ongoing cost initiatives, structural improvements. The water intake for the water was 1,478. 13 crores. Thank you. Thank you. And then discipline pricing, along with focus efforts on efficiency gain via cost and productivity program over the last few quarters have helped partially to mitigate the adverse impact. And business continues to prioritize the margin expansion to ongoing initiatives and structural improvements in pricing and mixed shipping. The order intake for the year was 6,365 crores and the unexecuted order backlog as of closure The year was 3,075 kilos, and there was a big growth. Now, if I go to the other segment, which is the power system. Thank you. 287 basis points margin expansion underpinned by efficient order execution and strong operating discipline. Thank you. For the future quarters. The call is 238 crores, with a rise of 46 percent. Reflecting its strong execution discipline, PBIT was at 1123 crores, 21.9 percent. 50% of sales in financial year 25. Ad1 basis points of margin expansion and underpinned by the efficient order execution and strong operating leverage. Order intake for the year was This is 69% growth year over year, and unexecuted backlog as on 31st March was 12,644 crores, which is 91% up year over year, offering revenue visibility spanning. So, I'm going to deep dive into a standalone performance, and I will now move to the consolidated performance, and as you know, consolidated results include the performance of our subsidiaries in Sweden, Germany, Netherlands, CG Edesis product and CG Semiconductor Semi, GGtronics, Xero, and other non-operating subsidiaries. 3,442 crores at a growth of 25% year-over-year. Profit after tax was 335 crores. And when we consider our full year consolidated performance, aggregate sales for the year was 12,418 crores with a growth of 25%, PAT was at 27% at 1,012 crores. 9.9% of sales for the year, as against 9.23 crores, which was 9.8% of sales, eventually at 25. Margin gains are driven by strong standalone performance and were offset by continued investment over talent pool, as mentioned before. And return on capital employed for the year was at 20%. Order intake for the year was 19,616 crores, 33% growth. And the un-executed backlog as on 31st of March was 61% up at 17,107. For the last financial year, as you would have seen, we had announced that we have, you know, ordered for the supply and servicing of 765 kV transformer packages from the large customer power grid corporation. Order value was about 641 crores. It's the highest single order domestically received in the transformer business in CG. The order is expected to be completed between 18 to 36 months. And also CG secured the single largest order of 244 crores for EHV business from Techno for supply of packaging transformer, circuit breakers, lightning arresters, and a combination. And CG also launched successfully and completed QIP. On 30th June and closed on 3rd of July. It was oversubscribed by CX. Thank you very much. TG unveiled one of the India's bus. We should be in that situation. And G2 facility located about 3 kilometers from G1 is in reconstruction, expected to be completed by end of 2026. Once operational, G2 will scale up to the capacity of approximately 14.5 million ships per day. Together, the two facilities are projected to generate about 5,000 direct and indirect jobs in the coming years. Now, CGSEMI is also eligible for capital assistance as per the scheme for setting up OSAT facility launched in India Semiconductor Mission under the Ministry of Electronics and Information Technology-wide approval dated 8 March 2024. The approval recovers a five-year period from financial year 24-25 to 28-29 for a total project cost of 7,584 crores. Central government assistance of 3,501 crores and additional state government support equating to 40% of the central government assistance coming toward 1,400 crores. And the trust and retention account agreement was signed on September 15, 2025. expansion for switchgear business with an investment of 748 crores. And extra high voltage, circuit breakers, instrument transformers, gas insulated switch gears. January 26, and the largest single order received by CG for supply of power transformers. And under this contract, CG will supply the transformers, specifically engineered to meet the stringent reliability, efficiency, and uptime requirements of hyperscale data center applications. This order will be executed for a delivery period of 12 to 20 months with the delivery We have three terms of FAS, Mumbai port, Azainco terms. The Board of Directors of the Company, at its meeting held on January 27, 2026, considered and approved the payment of interim dividend of 1.3 per equity share. That is 65% of the face value of Indian rupees 2 per share for financial year 25-26. With this, I conclude my opening remarks and audited financial statements with detailed notes are available as part of stock exchange filing and on our company website. Thank you so much for listening in.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use hands while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ankur Sharma from HDF3 Live. Please go ahead.

Oh, yeah. Hi, sir. Good afternoon. Thanks for the opportunity. I have three questions. First, you know, it's good to hear that, you know, we're finally seeing double-digit growth in motors. Just wanted to understand, you know, how much is volume growth and how much is price-led? Also, you know, given the current inflationary environment, how much more of price hikes, you know, would you intend to take in the motor side of the business? Thank you.

I'm sure I'm good. I think a great question. So on the motor side, I'm... President of both, and the volume hikes. in sync with the market mode that we have seen but also we didn't let our

Okay, and how much more do you think you may have to take? I mean, how much, you know, to cover the call?

It only depends on, you know, because we keep a laser sharp eye on, focus eye on the commodity inflation, the way it is happening, because it's a little tricky for motors or drive business versus some of the large long lead items, because where you get the PVC. So we keep a laser sharp focus on how it is going or the collections on that, and basically that we take the decision case to case basis. Maybe it's not required. But what we are also honing our skills on is the pricing discipline, you know, how do we make sure that we are not having the leakage by giving additional discounts.

I'm just trying to understand, is this like the most sustained kind of growth rate that we should be kind We're kind of expecting in that 50-20% ballpark as we head into next year. Obviously, the pace also starts catching up. Just your thoughts on the overall strategy here on the domestic transform of our product systems.

So I think, Ankur, you know, if I had to give a short answer, the game has just started. So Nine Rick Rose is what we had to report because it was a substantial order that we have. But after that also the app is open and as we, you know, put our feet on the ground outside India as well, you know, anything we touch, you know, it just opens up. So there's so much opportunity available for everybody. You just need to know how to encash on it, how to make sure that you execute with the right quality, right standard, right liability. I think that's what will be the differentiation, nothing else, and you should have the appetite on that. So I'm not going deeper, whether it's transformer or it's switchgear, but I think overall for power, we still see a huge demand all over the world.

No, sir, I understand X of India. I'm talking specificity of India is what I was talking about. How would you see the Indian power market shaping up as you had in the next couple of quarters?

Yeah, that's also growing at a very, very fast pace. You know, in fact, as we are adding, if you see just one year back, we were at some 18,000, 17,000 MVA capacity for transformer. Today, we are almost close to 65,000 MVA. I don't think anybody has done that kind of increase. And still we feel as we beat the large customers or even the government companies in the utility sector, what we keep hearing, give us more, give us more. I mean, nobody is saying stop it. So, I think it's a good, it's like Amrit called for power sector.

And this one last one is on the balance sheet. You know, I see this item called other financial assets totalling almost 3000 crores, you know, in Q4. Can you just help us understand what is that?

This is the, you know, the QIP money which has come up. So it is parked into the different asset class.

Got that. Great. Thank you so much.

Thank you. A reminder to all the participants, please stick yourself to two questions. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead.

Yeah, good afternoon, sir, and thanks for the opportunity. My first question is, can you help us with the GGtronics order in flow, and how did the year panned out in terms of revenue return pad, and how do you see the order outlook in the segment here?

Yeah, Mohit, so I think GGtronics, if your question is specific to the order book, I think it's pretty strong right now. I think we should have the, you know, I think the order backlog should be tuned of close to 1,000 crores approximately. The second question might come for, you know, when do we start executing? We are at the last leg of the rule process, which is the passenger trials, which is already going on, so there are about... Maybe another month, month and a half, all these trials should be done.

What was the last year revenue, EBITDA and PAT, if the number is available with you? Available?

You mean for GGT or what? GGTronics, GGTronics, yeah.

What's your question, sorry? My question is, what was the revenue and profitability for the GGtronics especially?

So they are at, I think, at 100 crores at a full year basis, and they are making money, they are not losing the money. They are at, you know, at least around 4 to 5 crores PBT number.

My second question is, can you help us with the understand the receivable jump in receivable, which was 2,000 crore last year? I think it has jumped to 2,900 crore, if I'm not wrong. So, it's up by around maybe 50 percent, while the top line is up by 20 percent odd.

Now, you are talking about the tear receivables?

Yes, yes, yes.

Only tear receivables?

Yes, yes.

Okay, so you look at that the growth which is coming mainly in the power segment, right? So if you look at even that the return of capital employed on the power side is more than 100% plus. The receivables which are there today that is more is coming from the power side. And the average credit period is ranging between 9 to 100 days.

Understood, understood. Okay, thank you.

Thank you. The next question is from the line of Harshit Patel from Aquira Securities. Please go ahead.

Hi, sir. Thank you very much for the opportunity. Sir, firstly on motors, what would be the mix of IE3 and above in our overall S526 volume? And where do you see that growing in next two to three years? Does this change in mix help our margins or this change in mix will be margin-maker?

So, the specifics, I'm not allowed to... I can tell you it's not very substantial at this point of time, because even though we talk about energy efficiency, but Indian market is a bit slow on. I'm sure it's going to pick up in the next couple of years as government is tightening and the need for energy is increasing further. So, and our R&D and development is also accelerating the same, you know, to have a complete portfolio of I3, I4 motors. So that is progressing there. The two-year question, to be specific, it's not very big in terms of the percentage of the overall portfolio. Because of a market site.

Understood. Secondly, on the GIS, we were in the development stage for 440 kV GIS. So, if you could share an update on its commercialization and also the development plans for 765 kV GIS, if any.

So, Gaurav, you want to pick up that question?

Yes, sure, Ramad. So, thank you for that question. So for 400 kV GIS, the plan is exactly on the schedule there. We have already tested the phase one of our GIS, put some of the phase two is scheduled between quarter two and quarter three. So yes, once we have the type test done in any of these international labs, we should be out with our commercialization for 400 kV GIS. Yes, further to that, 765 kV is... Uh, on the conversation there. Yeah. So, 2020, uh, Spam and Financial could see the commercialization happening for foreign KBGIS.

Understood. Lastly, uh, if you could share an update on the drive business in terms of how much space, assembly, value addition, localization that we are now, uh, doing in India.

So, so drives, I think there's a series of new product launches that is planned from April onwards, it's already started getting launched, you know, it's called AMX drives, which is a next generation drive, and again, low voltage drives, and medium voltage, the percentage is not so high, but low voltage drives is almost 100% indigenous.

The next question is from the line of Sumit Kishore from Access Capital. Please go ahead.

Thanks for the opportunity. Phenomenally strong results in power systems. Could you give us an update on the power transformer capacity expansion, how that's panning out, and what are the sort of... The timelines as you add capacity and reach your target. The second question is on the export business within CG. So what has been the scale or size of exports overseas revenue separately for power systems and industrial systems in FY26? And what is your outlook for growth through FY27? What are the opportunities that you are pursuing?

So, Ajay, if you can take the first question in terms of transform capacity.

Thanks, Kamal. Thanks for the question. Regarding the transformer capacity addition, we have completed the round-field expansion both in Gualier and Bhopal. The Gualier facility has now capacity increased from 6,000 to 10,000 MHz. And the Mandiji's Bhopal facility. So there we have done CAPEX and after the CAPEX plan, the capacity is increased to 40,000 MBA first. And then we had our lean plan. We worked along with the lean consultant. And this capacity has grown to further 65,000 MBA at the end of the last year. Now, for the forthcoming addition and capacity, the greenfield plant eruption is in progress, and we hope to commission the plant somewhere between July and August. And initially, we will be starting with a capacity of around 25,000 to 30,000 MHz, and by the end of this calendar year, we will be touching the peak of 45,000 MHz there. So, as of now, the total of between Guardia and Bhopal, we have a capacity of 75,000 MBA and another 45,000 MBA to be added by the end of this year. So, this will be around 110,000 MBA by the end of this calendar year. Over to you, Amat.

Thanks, Ajay. And I think, Sumit, on your other question, we will not give the split of exports wide-based The only thing I can talk about is both the areas, we have more than doubled our order bookings between last year and this year. And we have much larger expectations, so more to come, so stay tuned on it.

Thank you. The next question is from the line of Atul Tiwari from J.P. Morgan. Please go ahead.

Yeah, so my question is again on the motors and drive business. So since the start of the war, because a lot of clientele we understand is SME and SME, so how has the demand been for that part of your business where you sell stuff to SME and SME?

Photos and drives, our... The European business for rise because that is primarily the European plant which supplies to Europe as well as to US. That is going on in that geography. So there's not any specific dip or anything that we see from these regions.

But sir, what about in India? I mean, I believe you will be selling to small industries quite a bit, right? Is the demand holding up in India or is there an impact on demand because of the shortage of gas?

We don't see the dip in that. In fact, with our GTM getting activated now with the senior leaders in place, in fact, we see improvement in the order intake.

Okay, good to know. And so my last question is on again the transformer capacity. So currently operational 65 KMVA, how much of it will be 400 KVA plus capacity or is it fungible across all the KVA engines?

It is across all the ratings that you have, even up to 765. In fact, we are now getting a new plant coming in up to 100.

Thank you. The next question is from the line of Amit Mahavar from UBS. Please go ahead.

Amit Mahavar, I just have two quick questions. First is on the power... Sorry to interrupt.

Amit, sir, your voice is very low. Can you just get the headset a little bit closer?

Is it fine now?

Yes. Okay. You can go. Thank you.

Yeah. Amit, I think, first of all, congratulations on Great Health Results. On the power business, when you trap the American market beyond data centers for American grid utilities, Sir, the line for Amitra has been dropped.

I'll move for the next question. The next question is from the line of Aditya Mongiam from Kodak Securities. Please go ahead.

Thank you for the opportunity, and I hope I'm audible to you all.

Can you speak a little bit louder, please?

Sure, we'll do so. First, congratulations to the entire team on a fairly strong set of results once again. The first question that I had from my side was, if you could give us a sense of the addressable market on the GIS side in the 400 and 765 KV category.

I think, Gaurav, if you want to answer that, of course, not going too specific into the ratings, but you can generally talk about GIS market. This is a simple market.

Yeah, so not to get into any specifics of the details of GIS today, you can see the overall stage today would stand close to about 12,000 odd crores as a market total, right? Of which I believe around 20-30% still would be GIS, rest of them could be an AIS figure. So that's the quantum possibly a potential accessible market that you could also be aiming at in future.

Sure. Understood. And I'm assuming this is a domestic part. Is there also an overseas part that you believe can fall inside RQT?

Yeah, I think as Amhar mentioned, I think exports as well as service demands are key focus. So whatever we are developing or whatever is under plan is both for domestic as well as exports for product development, whether it's A 145 kV GIS ranging to 170, 245 as well as 400 are under plan for both domestic and international markets now.

Understood. One of your peers was talking about, and a similar zone that you are in terms of capabilities, was talking about moving on the HPDC side of things. Is there a plan that the company has and what are the key milestones that they may have to achieve to kind of reach that level of capabilities?

Yeah, so we are, you know, it's still at the infancy stage. We have laid down a bit of roadmap on that, but the plan is not fully mature. So when we are ready for it, we'll surely share.

So maybe the final question from my side, this is more on the semiconductor part. You made an initial investment about 50 crores inside Edge Cortex. Could you talk a little bit more about that and how to think through investments inside semiconductor design from there on, maybe a little bit more on the medium-term basis? Thank you. That would be my final question.

This is, you know, just one of the steps that is into this direction. You must have heard me every quarter in the Arnings Hall or any of the interactions that – The conference is now being recorded, okay?

Yes, sir. Yes, sir.

Okay. So, let me repeat. So, what I was saying is that You told me in the last couple of quarters that we are looking at the retail pipeline of candidates on potential M&A to keep building on our design capability. So the first step was on the RF design capability, but that's not real, actually, it was stops. So the investment that you see is just one step forward in that direction and, you know, especially with AI team coming in. or these kind of companies where we will get to have

The next question is from the line of Rahul Gazzari from Mercury Capital. Please go ahead.

Yeah, hi, Amar. I have a question on motors. Are you able to hear me?

Yes, Rahul.

Okay. So on the motors, is it fair to say that the worst is behind and we can see improvement in growth and margin from here? And also, you know, I think you've talked about this earlier, you know, where you've taken some price hike, but through the last entire, how much price hike did you actually take? And your comments on competitive intensity and market share in the motors. That's the first question.

Okay, super. So, I think to start with, the question was how much price increase we take is about, all put together, it was 5, 5, 7 and a half, so total of 17 and a half percent price increase that we did in the last three to four quarters, and with decent realization. The good news also in that, you know, the team led by Jatinder, who leads this business, is... They have kind of maintained their market share in spite of such a steep price hike. Now, I generally say that we are blessed to be the market leader, so the moment we do something like this, everybody else follows us. So that's what has happened in that direction.

And to quantify that, that will be in the range of 33% market share?

Yeah, it depends on different types. So if you look at overall anti-motor side, we will be approximately 38-39%. Thank you. Approximately, if I go to larger industrial motors, it will be around 19-20%.

Okay, and fair enough, so that's on the motors. Now, on the power, I want to understand, you know, the order that you got from the data center, that actually indicates the delivery time anywhere between 12 months to, I think, 18 or 20 months. Is that the quickest you can deliver or transform into the U.S. market, or you think you can do it much faster?

Adil, you want to answer that?

Yeah, thanks for the question. See, the delivery of transformers for the U.S. market basically depends upon the delivery of the components like passenger and bushing. Even though we can manufacture a transformer earlier than that, but we will always be dependent on the passenger deliveries which come from Jamaloo, and they are anywhere between 9 to 12 months. So, as of now, we are constrained, we can deliver from 12 months onwards only, because of this reason.

Okay, because I understand, you know, Koreans can actually deliver in closer to 10 months, you know, that's the reason of this question. Fair enough. My last question is on the semiconductor business, you know, while you did indicate that the chip We'll start in two quarters. The 500 crore which is currently booked into the financials, all of that is design-led revenue or there is some other part in that.

Mr. Rahul, you can go ahead with your last question again, please. Thank you.

Yeah, I don't know if you heard the question, or I will repeat the question.

Yes, please. Yes, Rahul, because the line was pointed.

Yeah, so, you know, my last question was on the semiconductor. Now, you have indicated that, you know, the semiconductor chip revenue essentially will start in but two quarters or so. So, I want to understand, you know, the 500 crore which is booked into the financials, all of that is design-led revenue, or there is something else in that 500 crore?

Which 500 crore are you talking about?

You know the segmental breakup that you all give of the revenue, over there, for the full year, the number is 500 crore. So I just wanted to be sure what exactly is that number.

This is the revenue which is coming that, you know, the company what we bought from Renesauce, the RF business from the Renesauce, the Xero.

So RF and design, these are the two things.

Not two things. Xero is the name of the company that we created. RF business is what we bought from Renesauce, and that is what has started generating the revenue. So I think, yeah, it's about 65 million was the plan, so which comes to about 500 rows. You're right. So, yeah, because it is a running operational company, so that is the number you would have seen there.

Thank you.

Reminder, to all the participants, please risk yourself to two questions. The next question is from Amit Mahavar from UBS. Please go ahead.

Yeah, hi, Amit. First question is on the power system exports. How do you see the timeline for the grid

utility approvals for us now that we have data centers?

Orders basis may be the quicker timeline. How soon can we expect the grid utility turn around for us on orders? That's the first question.

The utility, you mean in terms of supply or approval process?

Yeah, in terms of approval and, you know, potential orders from the American utilities. Is it more like 6 to 12 months or a longer period and some contours around that?

No, but it purely depends on, you know, what we're talking about. Like, you know, America works very differently than the way we work in India. So, America, there are 478 utility companies because every area is divided. And even if I take... Utility companies, that amounts to about 70-75% of the total revenue. So, every utility is pretty independent. So, and everybody has different timelines. So, you cannot categorize six months or one year or three months or five years. It will vary from utility to utility.

Sure. And the second question is on industrial segment. You know, we have a very, very formidable competition, you know, from maybe the likes of NYREC or WEG, et cetera. Some of them are very, very aggressively expanding their manufacturing equipment in India. So my question is more on, you know, fiscal 27. Do you think the delta for us on profitability and growth is more on the rail part of industrial as we execute the... Propulsion and the Tronix book, or do you think industrial motors also will contribute significantly to the profitability in 27 or that area that's a year where, you know, we're still not hopeful on the motors profitability. Some color on, you know, the industrial versus rail profitability in 27. Thank you.

No, I think these are different verticals under the segment of industrial. Railway is a separate vertical, which is led by Daranjay. I think he's doing some good work there to turn it around to make sure that it's coming to a much bigger number, the way Jatinder did turn around for the motors business, which is doing fairly well. So I'm sure railways also in the next few months or quarters should be inching upwards. So, it's a commission of both, and to your question on... Competition with the biggies and all, and that's fine. I think competition is always healthy because that keeps us on the toes. So we're just honing our skills on keep building the NPDs, you know, build our design capability, and also make sure that we are cost competitive, not cheap, but cost competitive so that we continue continuously keep eliminating the waste from the system. So that's the ongoing effort.

Sure. Thank you. Thank you very much, and good luck.

Thank you.

Thank you. The next question is from the line of Girish from Morgan Stanley. Please go ahead. Bye.

Hi, sir. Thanks for the opportunity. I had a question on Railways X GGtronics. So, what's been the growth rate in revenues for FY26? And also, if you can share any outlook on this piece of the business. And second, I wanted to understand the pipeline for US transformers, if you can share any qualitative color around how things are. I know you've spoken about it in the past, but any L1 status here, or how does it work there, like what's the size of the opportunity that you're looking at in the medium term. And the final question was on CAPEX, if you can just color what will be the F527 and 28 CAPEX numbers.

I think you were supposed to be limited to two questions, three, four questions, but anyway, let me go one by one. So, which one do you want me to answer first?

So, you can take up Railways and then Transformer for US and then Capex.

So, Railways is, so your question was specific to Gigitronics. So, Gigitronics and Gigitronics.

So, Gigitronics, what's the growth, sir, and the outlook for that? X of Gigitronics.

Except. Is your question XFGGtronics or what is the question?

Yeah, XFGGtronics, excluding GGtronics.

The breakup we don't give, no, it's part of industrial business. So we are not allowed to give the breakup of each of the businesses.

So I was asking, looking for growth rates, sir, and outlook.

Yeah, that's what I'm saying. We don't go specific to each of the business lines in the business. So if you talk about industrial or something, then we can talk about it. But we don't go deeper into each of the businesses.

Okay, if you can share some perspective on Railway's outlook.

Yeah, so Railway's, I think, maybe Daranji, if you can give just a flavor of, you know, how do you look at the market and your key one or two initiatives there, without getting too deeper into numbers or anything.

Yeah, thanks so much. So on railways, yes, we see a sizable potential with some of the new products that we are working through. And in addition to that, we also see some good opportunities on the export side, which we have still to explore, long way to go. And then on the service side is another area where we see good potential for, you know, high double digit growth there, and then of course, helps us improve our profitability and margins on that. Thank you.

Good. Thanks, NJ.

The next question is from the line of Pariksit. Kanpan from HGFC Securities, please go ahead.

My first question is on the margins, so are we facing any impact of geopolitical issues currently there on the margins, and have we been able to pass on the commodity price impact to the customers, any impact on the oil prices, impact on margins, or bushing, so if you can get some color on the margin of the power systems business, and going ahead, how do you look We will see further expansion in this business margins.

Well, thanks for the question. I think a lot of your questions have already been answered. One is the numbers. If you look at power systems, if there was stress on the margin, then it would have shown up in the numbers, right? So if you are doing better than 200 to 300 basis points on each of these segments, so that means the margin pressure is taken care of. And this margin pressure is not only from what we get from the customer, it's also how operationally efficient we are becoming. So, I think that's the critical thing, and that's the edge that we have from CG point of view. So, that's all. So, what was the second question?

I was asking largely on how is the commodity inflation hitting us, and are we being able to pass it on to the customers? So, is it entirely possible? Will we see some impact in Q1 coming in on the residual order book which we have, which may get hit because of the commodity inflation?

So, that is a simple, you know, different businesses, different areas. So, like I talked about motors, we discussed just now, a few minutes back, is most of it we have been able to pass on with the steep increase in the pricing. For other large businesses, it's really not a problem, you know, for the customer or the rest of the large businesses because you always have the price variation clause with the customer. So, whenever commodity goes up and down, it gets passed on to the customer.

The next question is from the line of Shirom Kapoor from Jefferies. Please go ahead.

Hi, sir. Thanks for the opportunity. Just had a question. So, export, while you don't give the breakup between industrial and power systems, could you share what is the overall contribution to your consolidated sales of exports this year?

Right now, I think it's very small. It's about 5% approximately. But, again, the aspiration is to be much larger. Like, as I said, you know, we kind of more than doubled in this previous year, and this year we are taking much more ambitious targets. So, stay tuned on that.

So, last, I mean, in FY25, we saw exports contributing about 10%. You're saying it's smaller, about 5%, 6% now. So, did we see some kind of decline?

No. No, it was never 10%.

Sorry? Sorry?

It was limited in percent.

In the overall consolidated mix.

Yeah, so if you include Sweden, Germany, and Netherlands, it can go up to 8 to 9 percent. But if you talk about from area to outside country, it is around 5 to 7 percent.

Understood. Understood, sir. And just my second question is on, you know, your railways business, you know, while you highlighted. That you don't give the breakup between railways and non-railways. Could you give some direction in terms of, you know, margins on the railway business? Because you've been mentioning some kind of pressures because competitive – in the competitive railway business. So how do you see margins tracking going ahead?

Yeah, so that's why I said, and I think Dhananjay touched a bit on how he's prioritizing, and as you know, in Indian railways, you won't be able to get too good a margin. Important is your operational efficiency. And second lever that Dhananjay has already activated as a part of overall team, I mentioned, is services. So, service is going to be a big function of us, and he's already created that vertical and is getting driven. So, that will give us a substantial increase in our margins. But, again, it doesn't happen tomorrow. It takes a bit of time. But he's executing it fairly well. So, that's another lever. And the last one I would say is also on the MPD. That's where the activation is on the R&D to get more and more new products. That helps us to become more competitive. So, these are some of high-level actions are being taken to continuously move this from single-digit margins to double-digit. I think that's the maximum I can reveal to you.

Thank you.

That was the last question for the day.

I now hand the conference over to Renu, ma'am. For closing comments, please go ahead.

Thank you, Ditesh. On behalf of ISL Capital, I'd like to thank the management of CGPAR for taking the time and discussing the results with us. Sir, any closing comments that you would like to make?

Thank you, Renu, and thank you, everybody. I know there's a large crowd here and interesting questions. Thank you. Stay tuned with us. I mean, there are exciting days and months and years ahead of us. So thank you for your time with us and appreciate it. Have a good rest of the day. Cheers.

Thank you. On behalf of IIFL security, thank you. That concludes this conference. Thank you for joining us, and you may now disconnect your lines.