Transformers And Rectifiers (India) Limited (TARIL) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Transformers and Rectifiers India Limited Q1F527 Earnings Conference Call. 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 the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference has been recorded. I now hand the conference over to Ms. Krishna Patel. Thank you, and over to Yuma.

Thank you, Anishka. Good afternoon, everyone. A warm welcome to all participants joining the Q1 at my 27th audience conference call of Transformers and Justifiers India Limited. Joining us today from the management team are Mr. Satya Muntura, the Managing Director, CEO, and Mr. Nehru Shah, the Chief Financial Officer, who will discuss the company's operation and financial performance for the quarter and address your questions thereafter. Before we begin, I would like to remind you that certain statements we have used in this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to this uncertainty that could cause actual results to differ particularly from those experts or inquiries. Please note that the audio recording transcript of this conference call are the property of Transformers and Electrifiers India Limited and may not be copied and introduced to the broadcasted, redistributed in any form without the consent of the company.

Good evening, everyone, and a warm, warm welcome to the news conference call of Transforming Electrifies India Limited to discuss the company's business and financial performance for the Q1-F5-27. We concluded our board meeting yesterday and have subsequently uploaded our financial results along with the investor presentation to the stock exchange and company website. We hope all the participants have had enough opportunity to review this material. Thank you for joining us today, and we look forward to sharing our performance highlights and addressing the questions during the course of this call. First of all, I'd like to begin with. The call by setting the tone of the company and outlining what stakeholders can expect from Tarion and FY27. First and foremost, I would like to assure all our stakeholders that we are committed to providing only those guidance parameters that we are confident of achieving. Going forward, our focus is firmly on delivering on our commitments and letting our performance speak for itself. We recognize that the trust and confidence of all of our stakeholders are paramount and we remain committed to protecting and strengthening that trust through consistent execution and transparent communication. In line with this objective, we have appointed Ernst & Young to support and strengthen our investment relations initiatives, ensuring timely, transparent and effective engagement with the investment community. Quarter 1 FY27 updates. As of June 38, 2026, our unexecuted order book stood at 6,630 crores, reflecting a 26% year-on-year growth, providing a strong revenue visibility over medium term. During the quarter, we successfully completed dynamic short-circuit testing of four transformer units with significant technical analysis that validates our product's ability to withstand extreme electrical and mechanical stresses under false conditions in accordance with the Sweden international standards. The current unexecuted order book is executable over the next 18 to 24 months, and we remain confident of delivering these orders within the stipulated timelines as we have adequate manufacturing capacity, resources, and execution capabilities in place to support timely project deliveries. Please. Our existing transform manufacturing capacity of 75,000 MVA plus. Across all plants coupled with a recent expansion initiative provides us the capability to support annual revenues in the range of 5,000 to 6,000 crores over the medium term. Our immediate priority is not adding further transfer manufacturing capacity but maximizing utilization and improving throughput and enhancing operational efficiency across all facilities. During quarter 1, FY27, we have received a healthy order inflow of 2114 crores, 218% year-on-year growth over low rate around last year, this time, this time. Major orders received during this quarter were ultra-mega order from PGCR above 1000 crores for manufacturing of transformers of various ratings. Within 30 months. Order from JETCO of about 228 crores for manufacturing transformers and reactors. Order from Malar Wisdiel of 175 crores for manufacturing transformers and reactors. Export order from PDC-8K-LP-4 LLC-USC of about 150 crores for manufacturing transformers. We currently have 23,000 crores of inquiries under negotiation. Historically, our room ratio is in the range of 10-15% and we are confident of achieving that. Out of the inquiries under negotiation, we are building for 80% domestic and 20% export orders with an equal mix between government, private customers and utilities and industrial customers. Alongside our core classroom manufacturing expansion, we are building a comprehensive backward integration ecosystem that will strengthen our supply chain, reliability, improve margins, enhance quality control, and reduce dependence on external vendors. Three projects under implementation include CTC facility, 8,000 metric tons per annum, and Phase 2 is 24,000 metric tons per annum, targeted commissioning by Q2 FY27. Prespo and installation facility, 5,000 metric tons per annum, Phase 1, and 10,000 metric tons per annum, Phase 2, targeted to commission by QC FY27. RIT bushing facility 3000 units per annum. And 6,000 units per annum in phase 2. Targeted commissioning Q4 to FI27. Fabrication facility, 25,000 metric tons per annum. Phase 1, 50,000 metric tons per annum. Targeted commissioning by Q1 to FI28. CRGO processing facility already commissioned and operational. Upon completion of these facilities, To cater approximately 80 to 85% of our raw material requirement in-house, significantly enhancing our manufacturing integration and operational efficiency. In transformer industry, where component availability remains a key bottleneck globally, we believe that per integration will become a significant competitive advantage for Caril over the coming years. We acknowledge that there have been delays in commissioning of additional facilities at Changodha plant. The delays are primarily attributed to extended maximum conditions impacting the project execution timelines, construction force availability constraints, and additionally, engineering enhancements and modifications across product-specific manufacturing lines and testing infrastructure. I am pleased to share that the projects are now progressing, progressing in the line with revised execution schedule. Sangonil expansion involving an investment of approximately 150 crores and backward integration initiatives entailing a total investment of 900 to 1000 crores remain key strategic priorities and we are confident that these facilities will be commissioned as per the timelines are formed. During Q1 FY27, Taril delivered 10% year-on-year growth in revenue. However, on a sequential basis, revenue growth was impacted comparatively lower capacity utilization at Changodha facility, where ongoing expansion and modernization activities are temporarily affecting the operational throughput. Importantly, this does not reflect any weakness in demand or order in flow or execution capability. The impact was purely projected, related, temporarily in nature. We have accelerated the execution of the project and placed the implementation process on a fast track. As the expanded facilities progressively stabilise, we expect meaningful improvement in operational efficiency and execution levels, with the growth expected to pick up from Q3 to FY27 onwards. At Taril, we remain confident of our growth trajectory and are targeting 25% revenue growth in FY27 along with EBITDA margin of 16% and PACT margin of 9-10%. These targets are underpinned by a healthy order book, expanding manufacturing capabilities, and sustainable demand outlook for the power transmission and distribution sector. As we enter the remaining part of FY27, our focus are clear, timely execution of the order book, granting of utilization at Changolar, commissioning backbone integration facilities as per revised timelines, sustaining margins through operational efficiencies, converting a healthy inquiry pipeline into executable orders, strengthening high-value product opportunities, The transformer industry in India continues to offer significant growth opportunities given by sustained investments in power and infrastructure and grid modernization. Additionally, emerging demand on data centers, expansion, and railway electrification. EVs charging infrastructure, renewable energy integration are evolving. Substantial opportunities for transform manufacturing over the coming years. While the business environment remains favorable, we continue to closely monitor certain external factors, particularly the unforcing geopolitical development subject to the factors remaining stable. We remain committed to delivering on the guidance shared with our stakeholders. Thank you.

Good evening, everyone. Thank you for joining us today. I would like to take you through the company's financial risk profile covering our profitability. Leverage, working capital, liquidity position, capital allocation, and the key risk, monitorable from a finance perspective. For Q1 FY27, standalone revenue from operations stood at 559 crore, registering a 10% year-on-year growth. EBITDA stood at 87 crore, with EBITDA margin at 15.6%, while PAT stood at 50 crores, with a PAT margin of 8.9%. The quarter was impacted on a sequential basis due to lower capacity utilization at Changwudar plant as ongoing expansion activities affected operational throughput. However, this is transitional in nature and with the expansion expected to complete by August 26, we expect utilizing level to improve progressively. From a consolidated perspective, revenue from operations stood at 572 crores, EBITDA stood at 110 crores, and PAT stood at 64 crores in quarter 1, FY27. Importantly, consolidated EBITDA margin remained healthy at 19.2%, which reflects the benefit of our integrated operations and contribution from subsidiaries. Coming to the balance sheet, our leverage profile remains comfortable. On a standalone basis, total debt stood at around 424 crores as of financial year 26 against a tangible net worth of approximately 1410 crores, translating into a debt-to-equity ratio of around 0.3x. Our debt to EBITDA stood at around 1.1X, which remains well within a prudent range for a manufacturing business of our size and growth profile. While borrowing have increased compared to FY25, this increase is largely linked to working capital requirements and growth-related investments rather than any structural weakness in the balance sheet. Given the strong order book, Thank you. This provides us with additional funding flexibility as we execute our planned capex program. The ongoing expansion at Changodhar involves capex of around 150 crores, while the backward integration program is expected to involve investment of around 900 to 1000 crores. We intend to fund this through a disciplined mix of QIP proceeds, leasing arrangement, internal accruals and date if required. The objective is to maintain an efficient capital structure while ensuring that growth does not come at the cost of the balance sheet discipline. A key area we continue to monitor closely is working capital. As of F526, stand-alone inventories stood at 561 crores and receivables stood at 1057 crores. Net working capital days increased to around 170 days. This reflects the nature of our business, where large transformer orders typically involve long manufacturing cycle, milestone-based billing, testing requirements, and project-linked customer approval. Our backward integration initiatives are strategically important from a risk management perspective. The new facilities for CTC conductor, press board insulation, bushing, fabrication, and CRGO are expected to strengthen supply chain control, improve availability of critical inputs, support timely delivery, and create cost efficiency over the medium term. Our fully commissioned, this initiative should reduce dependency on external suppliers and improve resilience against supply-side disruption. I would like to sum up my remarks by highlighting that Tyrell continues to operate from a position of financial strength. Over the last few years, the company has scaled its revenue base meaningfully while improving the quality of earnings, strengthening net worth, and maintaining leverage at a comfortable level. On a stand-alone basis, the revenue from operation has grown at a 5-year CAGR of 27%, EBITDA at 38%, and PAT at 101%, reflecting strong operating leverage and improved profitability across the business cycle. From a return profile standpoint, Teril has demonstrated consistent improvement in stand-alone ROC improved from 11.1% in FY21 to 19.1% in FY26. While return on equity improved from 2.1% in FY21 to 15.7% in FY26. This metrics underline that the company has been able to deploy capital more efficiently while scaling operations. Thank you. I now hand it back for the question-answer session.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We take the first question from the line of Abhijit Singh from Systematics. Please proceed.

Thank you for the opportunity. Sir, first question is on the revenue and execution front. So, in Q1, we have seen that the revenue growth has moderated to an extent, given the kind of order book we have. And, sir, you have mentioned also in the TPT and your remarks that the ongoing expansion at Changhoja led to the TV issues in this quarter, but it can just also be attributed to some kind of supply chain issues, you know, especially given the geopolitical climate right now, and some of the sourcing that we are challenging during the quarter. And so that is my first question. And how do you look at it going forward in SUTU and H2?

Okay. So, as far as the revenue is concerned, that is mainly on account of the lower capacity utilization at the Changodhar plant. It does not involve, so we have enough orders on hand. Only thing is that new facilities are yet to commence, and that will be commenced from August 26th, and mainly it will be stabilized by going forward since quarter 3. And as far as the second question is related to the availability of the raw material. So, mostly we have covered ourselves by procuring this material, say, up to December, till the time our backward integration facilities are up and running. So, till that time, we are well covered ourselves. So, majorly the geopolitical reason is not affecting much as far as the raw material is concerned.

So, has our inventory increased a lot at the end of Q1?

Yeah, we have inventory levels are high.

That means you might see increased interest cost in the balance nine months, right? We might need more working capital for this to sustain this kind of institution, you know, in the next nine months.

Yeah, but see, this would be a temporary future to protect ourselves. And it will be modernized once these, our backward integration facilities are up and running. So that will start reducing the inventory levels also.

Right. Right. Sir, our second question is on the other expenses. So this quarter, we have seen that the expenses are on the lower side, a little bit. Usually, they will hover around 13-14%. This quarter is on 12% of sales. And I would expect that, you know, some kind of, you know, commodity and forex pressure would eat into our margins. Could you explain that why is the other expenses, you know, on the lower side in this quarter? Is there a one-off there?

No, no, there is no one-off. There is, if you look at our quarter one other expense, it is around 69.74 crores last year. It is around 66 crores. So there is no major reduction as such.

And so, luckily, on the order and flow for the full year, I've seen that we've done very strongly in Q1 income for exports. We've got the 150 crore order from US. So, in that light, for the full year FI27, what is our expectation for the order and flow, both from the domestic and the export markets? If we could highlight also geography-wise, because as far as I understand, there's a lot of good demand for green customers in Europe also. So, from that perspective, what is the intro situation for FI25 and what do you expect to me?

So, we would be maintaining about 30% growth rate in both domestic and export market. We are currently looking at the Americans, Americas, as we say it, North America and South America. Thank you. Some of the Australian orders where we are very confident that we are going to get a good growth in terms of numbers in transformers.

All right, sir. Thank you for answering the question. That's it.

May I request the moderator to keep one question per person, please?

Sure, sir. Before we proceed with the next question, ladies and gentlemen, in order to ensure that the management is able to address questions from all the participants, please limit your questions to one per participant. We take the next question from the line of Subhadip Mitra from Nuwama. Please proceed.

Thank you for the opportunity. Just to check on the guidance, I think you mentioned for FY27, 25% increase in revenue and a 16% EBITDA margin. Is that the right number?

Yeah, that is there. 25% as far as the revenue and 16% EBITDA margin and 10% is at the PAT level.

Also, just wanted to understand that, you know, from a slightly longer term perspective, if I, let's say we look into FY28 and beyond, what kind of revenue growth and margins do you think are sustainable? And in the past, you had talked about Reaching a billion dollar kind of a top line at some point of time in the future. So, any thoughts on that?

So, the company is constantly working and progressing towards 1 billion by 2829. So, we are constantly working on that, and we are very confident that we should be able to reach 1 billion by 2829. Understood.

And for FY28, any thoughts on revenue and EBITDA margin?

We'll get to it when we get there. So, quarter four, we will give you a clear guideline on FY28.

Understood.

Thanks.

That's it for myself.

Thank you. We take the next question from the line of Jainab Vora from Sol Toro Investment Advisors. Please proceed.

Hi, thank you very much for the opportunity, and congratulations on the 1,000-CM PGCL order bill. So, I just wanted to understand.

The last PGCL order bill. Yes, I just wanted to understand.

Yes, yes. Apologies. 1,000 crore plus PG cell order win. So I just wanted to understand the thought process behind that win. I think even the biggest companies, your peers wouldn't have received a single shot or like that. So, what was the requirement, what was the thinking, if you could spend a couple of minutes behind that, and do we see, given the kind of energy transition and the opportunity that is there, PGCI is wanting to give such orders even in the future. So, that would be very helpful.

So, this order, like we said that we have about 23,000 crores in our order pipeline. Inquiries under negotiation. This was one of them, and which finalized in the first quarter. We have many more, about 23,000 crores worth in pipeline, so our win ratio is about 15 to 20 percent, so we should be winning those inquiries.

No, I understand that. I want to understand specific to this order. I think single shot order of this nature would be the first for the company and also for the industry, right? So what typically goes into this order? Is it just L1 bidding? And going forward as well, what indications is PDCI giving to companies like ours, given the opportunity, if you could explain that?

So, yes, all the tenders that we quote in India are on L1 basis, and I think as far as we have multiple more inquiries with PGC-IL, which are under negotiation, so they will take some time.

Got it. So, we can expect such ultra-mega orders to keep?

Thank you so much. I'll get back in the queue.

Thank you. We take the next question from the line of Shivam Singh from Capital Arc. Please proceed. Hello.

Am I audible? Good evening, Shivam. Yeah, you are audible, Shivam.

Good evening, sir. Sir, I just wanted to understand, sir, in our previous quarter, our employees have cost 38 crores and this quarter is 22 crores. Could you quantify what these changes are?

See this, in the last quarter, we have made some provision as far as the ESOP and the MD Commission, so that is there in the last quarter, and this year it is already part of that.

Okay, sir. And sir, I had one more small question. Sir, we told that lower the margins that we were taking in, we have stopped taking that and we are going for higher margin orders. But that is not reflecting in our actual business. When do we expect that to kick in?

Yes, see, this result, etc., number, etc., I can look at this EBITDA margin of around, say, 16%. That is consistently, we are maintaining it. This year, last, if you look at quarter 4, our margin was in that line. Even if you look at our entire number of financial aid 26, that is almost on the same line. So, definitely, this will be continuing in the near future also.

Okay, sir. Thank you so much, sir. I'll get back in the line.

Thank you. We take the next question from the line of Prathamesh from Motilal Uswal. Please proceed.

Hi, I'm Audible.

Yeah.

Hi, just wanted to know if you could please provide a breakdown of Power Transformer order book by rating class, and also which layers do we complete within each class?

So we compete with almost all players in India. Our business starts from 33kV all the way up to 1200kV. So in 33kV we have competitors which are small manufacturers. Then from 132kV to 220kV we have competitors like And then for EHV and UHV transformers, we have competitors which are mostly multinationals.

Okay, and our 5300 crore order book for power transformer, which we were to split it by rating class, which would be the top two or top three classes and their percentages?

So, we have always, you know, It's fairly spread out amongst all classes, so from 66kV to 765kV, we have, you know, these are very fairly spread out.

Okay, and sir, if we were to just check the revenue split of power transformer for this quarter, is it the same? Are we fairly split across classes in that, for revenue for power transformer in this quarter, or are we heavy in some particular segment only?

So, this quarter has been slightly heavy on the 220, 475 kg, you know, segment. Because our Changwatha plant is currently going through expansion, by August 10th, you know, this will be fairly spread across all ratings. So, IDTs, distribution transformers, small power transformers, large power transformers, EHV and UHV transformers, all transformers will be fairly spread across.

Okay. Understood, sir. I'll join the team.

Thank you.

Thank you. We take the next question from the line of Darshil Zaveri from Crown Capital. Please proceed.

Hello. Good afternoon, sir. Thank you so much for taking my question, sir. Firstly, congratulations on a great, good performance, you know, in a very challenging condition, sir. Sir, just wanted to clarify one thing, sir. We mean a billion dollar top line by FY29, right?

Yes.

Okay, okay.

We are working on it. We are constantly progressing towards it. 29 looks very achievable.

Correct. No, fair enough, sir. And with all the backward integration that we are doing, like in terms of margin benefit, what can we see flowing through from, you know, FY28? Because most of our, you know, facility this year in backward integration will, you know, come in the later half, right? So FY28 would be the year with nearly most of it coming online, right? So what kind of, you know, backward integration benefit we can see in margin, sir?

Yeah, it will be basically between 200 basis point to 300 basis point. But see, these facilities will come up in Q1, F528. So, the F528, from starting from F528, we will see gradual increase in the margins.

So, the CTC plant will be commissioned by Q2, the press board plant will be commissioned by Q3, and the bushing plant, which is a... A large bottleneck for us currently will be commissioned by Q4.

Correct. There will be a gradual improvement as scale improves. Yeah, fair enough, sir. That's not an issue. Yeah, and just the depreciation would hit in FY28, right, sir? Like, on a bookkeeping note, sir?

Yeah, once this capitalization is done.

Okay, okay. Yeah, yeah. Fair enough. I'll join back the queue, sir. Thank you so much.

Thank you. We take the next question from the line of Bala Subramanian. From Aryan Capitan, please proceed.

Good evening, sir. Thank you so much for the opportunities. Sir, order flow is almost 200% plus year on year, nearly 2,000 close class. Earlier, we used to maintain like 18 to 24 months execution timeline, but right now, we are taking up to within 30 months of the large order. Is there any changes in the strategic direction for taking orders in terms of timeline?

So, most of the orders that we are taking, Are currently from 18 to 24 months. Since this was a single, you know, bid, we got this for 30 months. Otherwise, most of the orders that we are, you know, categorically taking are from 18 to 24 months.

Okay, this one is exceptional, right now?

This is only an exception right now. Okay, sir. Okay.

And secondly, sir, like, right now, the global market is shifting towards multi-source converter based to HPTC systems, which are more complex than line-commutated converter systems. So, what is our design strategies based on, like, LCC, VSC, or hybrid side? If you could talk about, like, I think we are coming up with our own process. So, how do you look at, compared to, like, some big competitors like Hitachi, Siemens, or GEA, and what is the estimated...

We are looking at hybrid, so, and these are basically patented, not patented, but, you know, manufacturing secrecy kind of thing, so we would not like to discuss any further on this, but it will be... Based on hybrid systems.

Any R&D capex required for this, sir?

Not currently.

Okay, sir.

Okay.

Okay, sir. Thank you, sir.

Thank you. We take the next question from the line of God of Kameka from Mars Ventures. Please proceed.

Yeah, hi. Thank you for that.

Sorry to interrupt, Mr. Gaurav. We are not able to hear you. Please come closer to your device and then speak.

Am I audible now? Yes, Gaurav. Am I audible?

Yes, Gaurav.

Yeah, thank you for the opportunity. First of all, congratulations for a 10% increase in the revenue and posting a good number. So I just wanted to know about since our inventory is getting increased, and the inventory turnover is also getting increased, so when can we see our inventory getting like the sales and reflecting in our sales? Profit in our statements and we're getting the cash flows.

See, basically, as we told you that looking at the current geopolitical situation and the raw material, we have decided to keep the higher inventory level. So, till the time our backward integration facilities are up and running, we will maintain this level, and you will start gradual reduction from, say, from quarter four of the next financial year. So, till December, we are covered as far as the raw material is concerned.

So looking at the geopolitical situation, we have protected ourselves until December, and we are pretty much sure that all our backward integration plants will be ready by December. So, we have protected ourselves until December in terms of raw material.

Okay, thank you. Thank you for the clarification. Yeah, that's from my side.

Thank you. We take the next question from the line of Labhouse, Nishra from Fin Investors. Please proceed.

Hello. Good evening. I have one question. The EBITDA margin that we are targeting for FY27 of 16%, these are excluding other income, correct? These are operational EBITDA margin, correct?

Yeah, this margin has been calculated as including other income.

So, this quarter we have done 19% and we are guiding for 16% for the whole year, means we are going to go down below 15 as well.

No, no, 16% at a transformer level. This 19% margin is at a with including the subsidiary at a consolidated level.

Okay, so for consolidated number, any margin that you would like to write for the $420,000? Like, like, like for like, like 19% this quarter that we have achieved, what kind of number can we see for the whole year?

I think couple of person more. 21-21% Okay, all right.

And one more small question, sir. Like our orders, how do we protect the margins? Like, do we have price variation clause or we buy the inventory as orders are in here? We are

protected by price variation clause, but looking at the geopolitical situation, currently we have stocked up our inventory until December 2026. So that we are protected as, you know, we have large orders and we need to execute these orders on time. We have protected ourselves in terms of inventory. But after December, all our backward integration plants will be functional. So we are pretty much sure that, you know, raw material problem we will not face.

All right, sir. And one small update regarding Moraya expansion, and I think it was to be completed by Q3. So, is that on track, sir?

No, Moraya expansion is Q3, 2027, and that is on track.

Okay, all right. Okay, thank you so much, sir. Thank you. All the best.

Thank you. We take the next question from the line of Yash Gupta from Ashit's footage of the family office. Please proceed.

Good afternoon, sir. My first question on the debt levels, how are we looking at the debt level going forward as currently we have already at 400 plus crores of debt and working capital requirement to complete this 6,600 crores of unexecuted order along with that 1,000 crores of capex that we are going to build? So, how are you looking at the debt number for the next couple of years?

See, we will not like to increase anything in the debt. As far as the CapEx is concerned, we have enough cash as well as the QIP money, plus we have the arrangement through the leasing. So, for CapEx, we will not be needing much fund. If anything is required, then maybe a small debt. But working capital level, we try to reduce the working capital cycle, and from that only we will... Generate the additional capital that is required for the 6,600 crore order book. So there won't be any substantial... Yeah.

150 crores of this UIP money left for the backward integration, but currently we are at 400 crores and 1,000 crores for the current capex. And if we say 80% on the current uncompleted order book of 6,600 crores, then 5,000 crores for that. So how are we going to manage it for next two years?

See, basically 150 odd crores from the QIP money. We have arrangement for the leasing, etc. for the plant machinery. So that capex part is gone. Now there is no fund requirement as far as the capex is concerned. And then we may utilize certain internal accruals if required. So the capex will be funded in that line. And the working capital, we would like to squeeze our working capital cycle to generate the additional fund. So that we can manage the additional revenue that what we are planning.

So this 1000 crores of capex, then what would be the number after leasing if we are going for finance leasing?

Finance leasing would be roughly around say 500 CR.

Okay, so we need to spend only 500 crores then? Okay, and sir, this is the 1000 crores of backward integration, what turnover ratio we can expect on this? I understand that we will be utilizing this capacity for captive utilization, but what will be the turnover ratio on this 1000 crores of backward integration?

In the first phase, this will be entirely for the tarryl. In the second phase, we will look to scale into the market. There is a third party sale. So, that will roughly give us additional, say, around 800 crores to 1,000 crore additional revenue from this.

For the outside sale?

Yeah, for the outside sale.

And we can say that 50% for outside and 50% for captive?

No, this would be around 60-65% for captive and remaining for outside sale.

Okay, sure. Thank you, sir.

Thank you. We take the next question from the line of Avikshit Vijayev from Global Consultant Research. Please proceed.

Yeah, hi. Am I audible? Yes, yes. Thank you for the opportunity. So, my first question is, what is the update on the HPDC front? Like, last quarter, I remember we were saying that we were getting into it, and what is the timeline that we can expect revenues?

So, HVDC front, I think it will take another 15 to 16 months to get fully into manufacturing HVDC. We still have 9 months to complete our repair of HVDC. So, once we completed our repair of HVDC, then BGCR will empanel us for the first trial order of HVDC. Okay, great.

And I think this is a follow-up from the previous participants, the $1 billion revenue target. It needs about 50% cash-off from current levels, and we are driving for 25% right now. So how is this conciling? I mean, I'm not getting the math here.

So, please, it's 2029 is the, you can say, the earliest period, but we will definitely target. Because, see, if you're looking at our existing capacity, we can go up to, say, around 6,000 crores, and this backward integration, top line, which will be to the third party, that will be around 1,000 TR. So, that's how, see, even the target at the 1 billion time, rupee level was different, and now the rupee level is different. So, we are looking at somewhere around, say, 8,000 crores.

Yes, and one last question. Why is it that only we are facing a very big slowdown in the revenue growth, while our peers are posting like 50%, 60%?

That is because of the lower capacity utilization of the Changozar plant. So that will be, by August 26, it will start the capacity utilization, and from quarter three, it will normalize. Okay, sir. Thank you so much. That answers it.

Thank you. We take the next question from the line of Pratham Modi from HPMG Shares and Securities. Please proceed.

Hello. Am I audible? Good evening, and thank you for the opportunity. My question is regarding CRGO scale. The DGTR has initiated an investigation into CRGO scale input, which could potentially lead to imposition of a provisional anti-dumping duty. Could you share your assessments of the likely short-term and long-term company and raw material cost?

So, this investigation is currently going on and we would not like to comment on that right now. But, with the requirement that India has in terms of the growth of Indian electricity demands, they may have to look at, re-look at what can be done.

Okay. So, is there any strategy that companies considering to mitigate a potential impact?

We are currently just waiting and seeing what the results are. Plus, we have already protected ourselves in terms of the, until December 2026, we have protected ourselves in terms of whatever raw materials that we require. So, we are pretty much sure that things get sorted out by then.

Okay, let's answer my question. Thank you so much, sir.

Thank you.

Thank you. We take the next question from the line of Wilson, an individual investor. Please proceed. I would request Mr. Wilson to unmute and then speak.

I think he's not there. You can take the next question.

Okay, sir. We'll just proceed with the next question. We take the next question from the line of Gaurav Shukla from Finvestre. Please proceed.

Good evening, Gaurav.

Good evening, sir. I'm audible, sir.

Yes, you are audible.

Sir, in your PPT, page number 25, you have shown that capacity of all Muraiya, and Sangoda, and Odawa. Sir, what is this? I do not understand. If it is present or after expansion, this capacity will be.

Sorry, Gaurav, we couldn't understand your question. Can you repeat your question, please?

Sir, in your PPT, it's number 25. You have to do the capacity of Moriah, Changodar, and Odor. 14,000 MBA per annum, 35,000 MBA per annum, 22,000 per annum. Sir, is this capacity now or is it going to be later?

Changodar's capacity will start in August. Moriah is now and Odor is now. We are looking at 30% growth, so we are confident that we will be achieving 30% growth in terms of UEOB.

Thank you. Thank you.

We take the next question from the line of Srinara and Mishra from Varoda BMP Paribas AMC. Please proceed.

Thank you. So, my question is again on the digitalization. So, basically, Tangujan does less than 220 KV transformers.

Tangujan will do 220 KV up to 220 KV.

Yeah, yeah, sorry. So, Moraya was operational fully. So, if you can give like-to-like growth, I mean, for more than 220K, we transform us. What would be year-on-year growth? So, we can get some sense of how, you know, the like-for-like growth was.

Srinaran, let me put it this way. We are looking at 30% growth in all sectors. The growth in terms of 220 kV is also much beyond 30%. But looking at our current manufacturing capacity, we are looking at 30% growth this year, and next year we may go up to 45%.

No, no, that I agree, but I wanted to isolate the impact of capacity expansion at Changuja, and after that, what would have been the revenue growth? That's why I'm asking, more than 220 kV, what would be the revenue growth?

More than 220 kV? Yes.

More than 220 kV? Basically, currently, Moriah is operating at around 60-65% capacity level. And this would go up to say 80-85% capacity level going forward.

Okay. So here also there was a slowdown, so that's what we should understand. Even in more than 220 kb, the execution was slower.

No. It is, as per the last quarter only, it is around roughly 60-65% capacity utilization.

And why is the utilization lower here, 60-65%? I mean, otherwise other competitors are operating at, you know, close to full capacity.

As such, there is no reason, major reason as such.

Because the order book is there, but still, I mean, the capacity utilization is low. So, not able to understand what exactly is, you know, delaying the revenue ramp up or, I don't know, I mean, what is happening here. So, while other competitors are posting good numbers, so...

I think we're going to... We are pretty much in the same line as the market growth is.

Okay, okay, fine. And just one question related to this only, that, you know, we would have done higher, you know, mix of more than 220 kV transformers, given Changuzer was impacted. But still our markets are 16%. And when the Changuzer plant comes back, is there a possibility this 16 will become 14 or 15?

No, there is no possibility. We are pretty much protected in terms of the orders that we have. So, there is no possibility that it will go down.

I am talking purely because of the lower rated transformers will have lower margins, right?

No, we are pretty much protected, and we already have orders in hand of 6630 crores. So, you know, we are pretty much protected in terms of Changwadar manufacturing capacity also is concerned.

Thank you. Thank you.

We take the next question from the line of Rahul Kumar Mishra from Antic Talk Broking. Please proceed.

Hi, thanks for the opportunity. I have just one question, and it is pertaining to the Changudar facility. So, currently, as per the PPD, we see that because of the capacity expansion and modernization activities that is undergoing, the utilization should lower 27%. So, once the capacity is up and running, what utilization are we expecting in the near to medium term, like say for this year as well as for 28 and 29?

So, in this year, the capacity utilization will still be at 60-65%, and from next year, we will be ramping up the capacity utilization to 85%.

Okay, so this is like similar to what you have said for Moraya plant.

Yes, because, you know, even the backward integration plants will come into play by then. So, next year, we should be at a better capacity of utilization.

Okay, okay. That answers my question. Thank you very much.

Thank you. We take the next question from the line of Bhavya Dedia from Chris PMS. Please proceed.

Hello. Sir, my question is, I wanted to know the outlook for the USA market, like what is the volume growth that we see in the USA market for this year, and how are we competing in the USA market? Is it on the basis of quality, price, or what basis are we competing in the USA market?

Good evening, Bhavya. So, see, in the U.S. market, we are one of the big, major suppliers up to 765 kV transformers, and we have a track record of 765 kV transformers for more than 20 years now.

Okay.

So, on that basis, a lot of U.S. customers are, you know, relying on our quality, our production capabilities. And our end price is also one of the factors that we look at.

Okay. And what kind of revenue are we expecting this year from the USM market?

So, you know, our export business will basically be at 10 to 15%. We will not go beyond 15% in our export business. So we will be maintaining that business through the year.

Thank you. We take the next question from the line of Rahul Chandak from Alpha Plus Capital. Please proceed.

Hello, can you hear me?

So, in FI 26, we saw increase in rate receivables, current receivables.

So, going in this photo, how is that turned out today?

So, as we speak, this receivable level has reduced. As we told in the last con-call also, that there are certain receivables which have been realized in April. So, as on 30th June, this receivable level has reduced.

And going forward, what kind of working capital deal are we looking at?

So we are targeting on an average say 120 days to 130 days.

Okay, thank you. That's my wish. Thank you.

And this would be the last question. We'll take last three questions, please.

Sure, sure, sir. We take the next question from the line of Basan Bansal from NBG Investment. Please proceed.

Yeah, good evening, sir. Sir, my question is around on the top line. Now, we are talking of 1 billion. 1 billion means 9600 crore rupees approximately. Last year, we were at 2500 crore. If we add 25 percent for 27, we will raise to 3136 crore. That means for next two years, that is 28 and 29, we will have to add another 6500 crore rupees in our top line. So, are we sure of those numbers, or is there any confusion?

So, there is no confusion as such. When we said about this 1 billion, at that particular point of time, the rupee rate, etc., is very low. So, we are targeting, say, 8000 crores revenue, as we have given in our presentation, etc. Through this expansion at Changodar and Moraya, we will be able to easily achieve around, say, 5,000 crores to 6,000 crores. And with this backward integration, additional, say, 800 crores to 1,000 crores. So that gives us the up to, say, 7,000 to 8,000 crores by 29. So you can look at, instead of 9,600 crores, you can look at around 8,000 crores.

Okay. Okay. Yeah. Thank you very much.

Thank you. We take the next question from the line of Viren, Samir Deshpande from Alpha Peak Investments. Please proceed.

Hello. Good afternoon, sir. My questions have been already answered. I have only one small question regarding this EBITDA margin, which we have been mentioning. It is our 16% will be, hopefully, the blended margin for the related customer. Is it correct? No, I can't. 16% we are mentioning in guidance. Is it for the consolidated entity? I think it is only for the transformer that is stand-alone, you mentioned?

Yes, 16%, yes.

Okay, that includes other income, but it is only for the stand-alone entity, and the subsidiaries will have higher margin. Because last year, our blended margin for consolidated was 17.3%.

Yeah.

So, we will be close to that.

So, maybe the subsidiary may be given some additional 100 basis point, so that will be there.

Okay. So, overall, the margins will be higher than the last year, 25-26.

Yes, yes.

For the consolidated company.

Yes, that is correct.

Okay, okay. Thank you and all the best. Our expansions are really promising, and we look forward to the quick and prompt completion as early as possible. So, really, the next two years will be very good inflection point for the company, and all the best.

Thank you, sir.

Thank you.

This will be the last question, moderator, please.

Okay, sir. We take the next question and the last, from the line of Arun. From ABDS, Captain, please proceed.

Good evening, Arun.

Hi, am I up? Good evening. Am I audible?

Yes, Arun.

Okay. So, I guess a little bit of a repeat. In the utilization chart that you have in your presentation, we understand all the reasons that you mentioned. Odor is 100%. So, my conclusion is what was holding back Moraya to be closer to 100%. That is 57%.

Arun, there are certain geopolitical issues that we have faced in the past quarter, and that is the reason why we have, you know, stuck at 57%. But by now, this quarter onwards, we have already protected until December, and with our backward integration plans coming in the play, you know, our utilization will be much higher than this.

So, Moriah reutilization would really improve after the backward integration comes into play or even before that?

No, we have already protected ourselves in terms of the raw material for up till December. So, you know, this quarter is going to show a pretty good improvement in terms of capacity utilization. And after December, with our backward integration plant coming into play, we will see a much better improvement.

Okay. So, do you think Moraya could get to something like an 80% by Q3?

We are working on it. 80-85% is not far-fetched. Thank you, sir, and all the best. Thank you.

Thank you. Ladies and gentlemen, that was the last question for the day. I would now like to hand the conference over to the management for Closet Commerce. Over to you, sir.

Good evening, everybody. Thanks once again for joining the investor call for Transformers and Electrifies India Limited. We hope we have been able to address all your key questions and provide clear perspective on Terrell's performance, growth plans and outlook for CAPY27. Our focus remains on disciplined execution, timely delivery of commitments, and creating long-term value for all our stakeholders. Should you have any further questions or queries, please feel free to reach out to our investor delegation advisor, Ernst & Young, who will be happy to coordinate with us and assist you offline. Thank you very much.

Thank you. On behalf of Transformers and Rectifys India Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.

Thank you.