Transformers And Rectifiers (India) Limited (TARIL) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Transformers and Rectifiers India Limited, Q2 and H1FY27 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 this conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference call over to Ms. Krishna Patel from EY. Thank you and over to you, ma'am.

Thank you, Ikhra, and good evening, everyone. A warm welcome to all participants joining the Q2

FY27 and H1 FY27 early conference call

of Transformers and Rectifiers India Limited. Joining us today from the management team are Mr. Satyan Mamthora, the Managing Director and CEO, and Mr. Mehul Shah, the Chief Financial Officer, We will discuss the company's operational financial performance for the quarter and half year and address your questions thereafter. Before we begin, I would like to remind you that certain statements made during this call may constitute forward-looking statements. These statements are based on management's current expectations and are subject to risk and uncertainties that could cause actual results to differ from those expressed or implied. With that, I would like to hand over to the call to Mr. Satyen Mantura, Managing Director, CEO, for his opening remarks. Over to you, sir.

Thank you, Krishna. Good evening, everyone, and thank you for joining us today to discuss the performance of Transformers and Electrifies India Limited for the second quarter first of FY27. Peril's Q2 FY27 performance reflects better execution, improved capacity utilization, and operating leverage across manufacturing facilities. As of 38 September 2026, our Unexecuted order book stood at 7,237 crore, up by 32% year-on-year, providing strong revenue visibility over the medium term. The order book is executable over the next 18 to 24 months. During Q2 F by 27, we received order inflow of 1,169 crore, 97% year-on-year growth over low base of last year this time. Major orders received during this quarter were first-ever order of the nuclear power sector supplying generated transformers for NPCI and CAIGA units 5 and 6, marking the strategic entry into high-level infrastructure and high-value infrastructure segment. Received large transformer orders from Mega Engineering and Infrastructures Limited in August 2026 with execution scheduled over the next 35 months. Received LOI from AP Transco in August 2026 for power transformers manufacturing with deliveries planned within the next 13 months. Won a large order from Damodara Valley Corporation in October 2026 for manufacturing and supplying 500 MVO and 200 MVO transformers to be executed in the next 15 to 28 months. Secured a large order from ZEDCO in October 2026 for 80 MVA reactors and 125 MVA reactors and 500 MVA auto-transformers with the delivery schedule of next 24 to 30 months. This demonstrates the breadth of our capabilities across large power-transformers, auto-transformers and shunt We currently have 21,000 crores of inquiries under negotiation of which bidding for 80% is domestic orders and 20% export orders with the equal mix between the government and private customers with utilities and industrial customers. Other quarter updates, during the quarter we successfully completed dynamic short circuit on three transformers, a significant technical The final milestone that values our products, our ability to withstand extreme electrical and mechanical stresses under fall conditions in accordance with the strategic and international standards. Our ongoing transfer manufacturing expansion at Changwaza is near completion within with the commercial production expected to commence around Diwali. The additional capacity will further strengthen our capability to execute our growing order book and support the next phase of the revenue growth. Backward integration projects are progressing as per timeline. In September 2026, we established a subsidiary in UK to strengthen our customer support and expand our presence in the UK and European markets. Over time, we have planned to develop a local assembly and sales capability within with the potential to evolve this operation into a manufacturing base serving the region. Following our Q2 performance, we remain confident of achieving FY27 guidance and continue to remain on track with our growth plans for the full year. Our focus for the remainder of the year of FY27 will be on clear priorities, accelerating execution of our existing order book and ramping up expanded manufacturing capacities. Progressing our Backward integration initiatives meant maintaining discipline and sustainable, profitable growth. From an industry perspective, the underlying demand environment continues to remain supportive Thank you. Manufacturing capabilities establish customer relationship and presence across more than 14 countries carrying its wealth position to participate in the multi-year opportunity across domestic as well as international markets. With this, I hand over to our CFO to run our past financial performance, Lanky and Jigar. Thank you, sir.

Would you through the financial performance of Transformers and Rectifiers Limited for the second quarter and the first half of Financial Year 27. Let me begin with our standalone performance for the quarter. During Q2 FI 27, revenue from operations stood at 709 crore, 66% year-on-year growth, and 27% quarter-on-quarter growth. Revenue growth during the quarter supported by improved capacity Ebitda for the quarters stood at 114 crores, 203% YOY, and 53% quarter-on-quarter growth. Ebitda margin improved to 16.1% compared to 8.8% in Q2 FY26, and 13.3% in Q1 FY27. This reflects the benefit of higher operating leverage and improved utilization level during the quarter. Moving on, our performance for the first half of the year for H1 F527, revenue from operations stood at 1,268 crore, a growth of 35% year-on-year. EBITDA stood at 185 crore, 47% year-on-year growth with the EBITDA margin improving to 14.6% from 13.4% in H1 F526. Coming to the balance sheet, our leverage profile remain comfortable as of 38 September 26. On a standalone basis, total debt stood at approximately 575 crore, comprising long-term borrowing of around 125 crore and short-term borrowing of around 449 crore. The debt-to-equity ratio stood at approximately 0.35x, reflecting a manageable leverage position as we scale operation and invest in future growth. Stand-alone cash and cash equivalents stood at approximately 77 crore as of 30 September 2026. In addition, the company continues to have access to other bank balances and unutilized QRP proceeds earmarks for its backward integration initiatives, providing funding flexibility for the planned capital expenditure program. Working capital remains a key area of focus. As of 30 September 2026, stand-alone inventories stood at approximately 654 crore, while trade receivables stood at around 1053 crore, out of which 825 is current, And rest is the non-current data. Net working capital days stood at around 154 days, comprising inventory days of approximately 93 days, receivable days of around 117 days, and payable days of approximately 56 days. The working capital cycle reflects the nature of the transformer business, which involves long manufacturing cycle, milestone-based billing, testing requirements, and project-linked customer approvals. We continue to focus on collection, inventory planning, and milestone execution to improve capital efficiency as the scale of operation increases. To sum up, Teril continues to operate from the position of financial strength. The growth in revenue and profitability during Q2 F527 and H1 F527, together with a manageable leverage profile, provides a sound foundation. Our financial priorities remain disciplining capital allocation, tighter working capital management, and the timely funding of capacity expansion and backward integration initiatives. Thank you. I now hand it over back to the moderator for the Q&A session.

Thank you very much, sir. We will now begin the question and answer session. Anyone who wishes to ask a question may press star N1 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. The first question is from the line of Harshit Sachdeva from Columbus Capital. Please go ahead.

Hi, am I audible?

Yes, you are audible.

Hi, sir. Good evening. Congratulations on a great set of numbers, sir. Really impressive. Sir, could you just elaborate a bit more on the Kaiga orders and the Mega Engineering order that you received? That's part one. I mean, size and what are we supplying and who did we compete against or did they directly come to you? And second, sir, I mean, a new company, Kanoval, just got listed. So, do we compete with them in any segment? So, that's two questions, sir. Thank you.

Yeah, so, sorry, I couldn't get your name. Can you please? Hello?

Hello? Yes, sir.

Am I audible? Yeah, your name, please? Sorry, sir.

Sir, my name is Harshit Sashdeva. I work at Kuala.

Harshit. Yes, hi, Harshit. So, the NPCR order for CAIGA project, we were competing with Trompton and other large transformer manufacturers. These are basically generated transformers for the nuclear power project. And as far as panoha is concerned, yes, we do compete with them in the segments of 132 and 20 KB.

Sir, on the CAIGA order, I mean, any MVA or any order numbers that you could give, and is it repetitive in the nature that now that you are qualified?

Yes, yes, this is repetitive in nature. These are generated transformers, and the NPCR is putting a few more projects of nuclear power in India. So, yes, this will be repetitive in nature, and the rating of the transformer is 400 kV plus.

Okay, and sir, just last clarification. I mean, if let's say a 100 crew nuclear plant, I mean, I'm just throwing a random number there. What would be the value of the transformer components or the goods that we supply on any new greenfield nuclear project?

So, greenfield nuclear new projects would be close to about 15 to 18 percent. Okay. Okay.

Thank you, sir. Thank you for the clarification and best wishes for Diwali. Thank you, sir. Thank you. Thank you, sir.

Thank you. Next question is from the line of Vignesh Ayer from Sequin Investment. Please go ahead.

Sir, congratulations on a great set of numbers. Just one question from my side.

If you could share, you know, the mix of orders in terms of how many, how much percentage of the total outstanding order would be 400 KV plus and how much would be less than 400?

Yes, sir. Please go on with the numbers.

Yeah, so roughly we have around 55% of order which is having a high voltage class, 60% is a high voltage class, 400 KV and above.

Okay, and what would that number be for quarter 2 FI27 out of the total executed number?

Roughly we have executed around 56% of the power transformer in this quarter.

Right, yeah, that's all for me, sir. Thank you. Okay, thank you. Thank you.

Thank you. Next question is from the line of Meher Vyas from Nine Reyes Equal Research. Please go ahead.

Hello. Am I audible?

Yes.

Hi. Thank you for the opportunity. And I just wanted a quick clarification on our cash flow. Can you give some guidance from when can we expect positive free cash flow?

Give it please.

Yeah, the capacity expansion as well as the backward integration, and we are targeting of end of this financial year to start reducing our working capital cycle days, and that will give us a positive cash flow.

What is the internal target of working capital cycle days, if you could share?

It would be roughly 120 days.

It should be below 120 days.

We are trying to, you know, reach at 120. Once we reach them, we would like to see close to about, between 110 and 120 days this year.

Okay. Thank you. Thank you.

Thank you. Next question is from the line of Yash Gupta from Asit Koti Chai Family Office. Please go ahead.

Yeah, good evening, everyone. Sir, I just want to understand on the inventory, how the inventory is moving, how earlier in last two quarters, we have purchased a lot of inventories due to the pricing description, due to what's going on. How are the things looking right now?

So, see, things are looking, you know, sort of similar right now, but as you are aware that we are putting up our backward integration plans, and also we have enough inventory until this year, quarter three this year. So, we are pretty much safely placed in terms of manufacturing

And is that the copper wires and all those things which we have purchased at a higher rate has been utilized and the buildings and everything has been done? Or do you think maybe the some impact will be there on margin in next FI 28-29?

No, I don't think there should be any impact on the margins, because FI 28, 29, we should have our own backward integration plan fully functional. So, we will see a slight advantage there. Okay, sir.

And how is the competition, right? Sorry.

Yeah, go on.

Yeah, my next question is on the competition, how the competition intensity right now, earlier we have seen Like, a lot of competition intensity was there. How is the thing going on right now?

See, like we said that we have close to about 21,000 crores order in hand, inquiries that we have been tending to be finalized. So, we are pretty much sure, and the competition I don't see there is a huge price war or lowering of margins by competitors. Everybody has enough orders in hand.

And this 21,000 crores which you are talking about, on which we have a bid has been placed?

Yeah, the only thing the bids have in place, now inquiries are on, and they should be finalized in some time.

Okay, and this 1100 crores of order inflow in this quarter, it's anything, any exceptional thing, or do you think like this will continue to flow in next two quarters also for this year?

Yes, it will continue to flow. And like we have been saying before, we are trying to limit ourselves to, you know, un-executed order book for not beyond 24 months or 28 months. So, we are trying to keep that in place.

Okay. So, this 7,000 crore will be booked in the next 18 to 24 months. Is this correct?

7,000? It will be built, yeah. It will be built in next 18,000, maybe four months.

Okay, sure. Thank you, sir. Thank you.

Thank you. Next question is from the line of Anubhav Mukherjee from Preston Capital. Please go ahead.

Sir, just one question. There was a flare-up in the past quarter. How is the situation now?

You are, there is a lot of echo in your voice. Can you please, you know, it's not very clear.

Hello, sir, is this better?

Yeah, this is better.

Sir, just one question. Sir, in the past quarter, there was a flare-up in prices of some of the key raw material like transformer oil, CRG and all. So, how is the situation now, like, sequentially?

So, sir, the price is still on the higher side, but what we have, we have a majority of order which is having a price variation clause. Mainly, it does not affect our margin in a big way.

I'm sure, do we have some, like, retention money for, like, any orders we have? Like, is that part of our balance sheet? Okay. Can you quantify that?

It is the retention money. Roughly, yeah, retention money is always there in the order. So, roughly it is 5 to 10%. It ranges from different customer, but it can be from 5% to 10%.

And currently, what is the total amount?

Roughly around it would be.

Thank you.

Next question is from the line of Deepak Vodal. From Sapphire Capital, please go ahead.

Yeah, I'm audible, sir. Yeah, Deepak, you're audible.

Yeah, thank you very much, sir, for this opportunity. So just first I wanted to understand, now this Chandgodar expansion is expected to come next month. So just wanted to know, what's the capacity there, and was the CAPEX involved in this expansion?

So the capacity is close to about 35,000 MVA. And Capex, how much was the Capex?

Yeah, Capex is around 150-odd crores.

150-odd crores. So this will take our total capacity to 75,000?

Yeah. More than that. More than that.

Okay, okay. And what's the per MBA realization generally on an average? I mean, I understand it will be different from different types of transformers, but some average MBA per realization?

Yeah, it is different from, say, power transformer, distribution transformer, but on an average, we will be realizing around 7 lakh rupees per MBA.

7 lakh rupees per MBA. Okay, understood. That's very clear. And, sir, just wanted to understand now your all-backward integration plan is expected to get completed by first quarter, right? And that would effectively mean on this expanded capacity, 80-85% backward integration? Would that be a right understanding?

Yes, yes.

Okay, okay, understood. And so what sort of value addition we can have in terms of cost benefit or percentage to revenue? What sort of benefit we expect once all this backward integrated integration plant comes up?

We are looking at around 200 basis point to 300 basis point margin expansion through this backward integration.

And this will likely come by what, second half of FI28 or FI29, this improvement?

So, you will see the entire, firstly, it will cater the entire need of the tarryl, and then to the third party. So, F528, and then the F529. So, it will gradually increase.

Okay, but the full effect will be seen by F529?

Yes.

No, no, yeah, okay, yeah. Okay, understood, understood. And on your, this year, we are talking about 25% kind of a growth with a pat margin of 9% to 10%, right? I mean, given the growth that we have done, I mean, are we being conservative here? Because we are already at pat margin, I think, last two quarters, 11% plus, right? And we're still talking about 9% to 10% pat margin for the entire year. So, how should one look at it?

So, our target is to reach a growth of 25% and beyond. So, we are keeping our, you know, it is the same.

Come again, sir.

I didn't get you. Our focus is the same.

So, you kind of maintain the focus that you have been saying, 9-10% fast market at 25%. Okay, I got it. Okay, I think that would be from my side. I would like to wish you all the best. Thank you.

Thank you. Thank you. Thank you. Thank you.

Thank you. Thank you. Next question is from the line of Vinil Shah from Bilal and Proja. Please go ahead. Mr. Vinil, your line is unmuted.

Hello. Are you ready, Vinil?

Yes, you are out of here.

Thank you for the opportunity, and congratulations on a great set of numbers, sir. So, I had two questions. First of all, if I could just get the proportion of exports in our order in place, and the revenues for Q to F by 27. And second was, if you could just give us some color about how much price rise has been taken in 2 to FY27.

May I, please.

Yeah, FY27, our export is around 8 to the quarter. This margin expansion as well as revenue, which has come from the higher capacity utilization of the Moriah plant. So, margins, et cetera, is on the similar lines what we have guided, around 16 odd percent of a big time.

Anfo, any price rise we have taken in this Q2 effort variation?

What do you mean by price rise?

Since the raw material cost has risen, since the rest of the process, like if we have passed down any cost to our customers.

The price variation is always, every quarter, it is a phenomenon. So, every quarter, whatever we do the billing to the customer, we pass on the price variation also. So, this is not a one-time thing or anything. It is every quarter. Whichever billing we do, we also do the price variation billing also.

Yes, sir. Of course, I just wanted to understand that how much of the revenue group can be attributed to the price rise.

You are welcome.

Okay. Thank you very much, sir. And I'll be next. Happy Diwali.

Thank you. Same to you. Happy Diwali.

Thank you. Next question is from the line of Dhirap Pandey from ICICI Securities Limited. Please go ahead.

Hello, sir. Thank you for the opportunity. There's one question. This is on the production number for this portal in India. Portal production in India. Are you not very audible?

Mr. Pandey, may I request you to please repeat your question?

Yeah, sir, I want a production number for this quarter. What is the production on MBA for the Transformers?

It is roughly 500 MBA.

Okay, for this quarter, you too.

Yes.

Okay, thank you so much, sir. Thank you.

Thank you. Next question is from the line of Jainam from Seltoro Investments. Please go ahead.

Congratulations on a great set of numbers. My question was on the CAPEX that we are doing. So, could you just help me understand, Changudar plant's existing capacity was 12,000 MB, and we added another 15,000 MB, taking it to 27,000 MB? Or was it in Moriah? Because I'm getting a little confused. And was it for medium voltage and renewable energy transformers, the capacity expansion?

Yeah. So, Changodar, the manufacturing capacity was up to 12,000 MVA. Manufacturing capacity at Changodar will be 35,000 MVA. Changodar will be producing distribution transformers, IDT transformers, transformers for renewable energy. Changodar will be producing small power transformers up to 132 KV.

So, incrementally, 25,000 MVA is being

added to the 12,000 MVA that we had, taking it to 35,000 MVA's capacity. Is that correct? Yes, yes, okay. And the extra high voltage transformer, 22,000 MbA that we were adding, that would be in the Muraya facility, and that would be large power transformers, and when will that commence production?

That will be EHV transformers. That will be EHV transformers. And once we have finished this Changodha project, we will start working on the Moraya plant. So when can we expect this to be a little bit? And plus, what will happen with our insulation and, you know, fresh wood plant coming live, the manufacturing place for insulation, which was at Moraya, will now be added to transfer manufacturing unit. So, we will be adding about 30% plus manufacturing capacity at Moria.

Okay.

So, when does this... So, this 30% should be immediately once our press board plant is functional. And apart from that, what is going to happen? It is going to happen once Changozar plant is completely finished. So, Diwali Changozar plant will be completely ready.

Post that, we will look at the IA facility. So, FY28 onwards, is it safe to say that the EHV transformer plant would be ready for production? Am I audible? Yes, yes. Okay, understood. So, that's my first question. My second question is, on the 1,000 crore big order that we received from PGCL, congratulations on that big order. What is the execution timeline, and what are the milestones for that, given that it's one of the largest single-sort owners?

So, the execution timeline is about 24 months, 24 to 28 months, and we should start commencing manufacturing, I think, December next year.

December next year. Okay, understood. And I just wanted to get an idea of what sort of capacity utilization that we are looking at this year and the next year, FI27 and FI28, particularly FI28 once the plant arrives.

So, ideally, I would want a capacity utilization of about 90%. And we are constantly working and, you know, we are constantly progressing towards that. But ideally, 90% capacity utilization is very good for a plant.

So, will we achieve that in FY29 or are we confident of achieving that in FY28 itself?

We are working towards it. Maybe this year, maybe next year. We are constantly working towards it. Once our plants will be ready, we should be in a better place to understand how it is going.

Got it. And one last question on data centers, how is the opportunity, what are the audience that you are seeing, and particularly in the U.S. export markets, are we in discussions with companies or utilities out there to provide our transformers? That would be very helpful if we should provide some color, both India and abroad.

Sir, out of the 20% of the 21,000 crore inquiries, 20% is exports. And yes, we are looking at We have registered manufacturers for a lot of large data center facilities. So, we have a preference there.

Got it. Congratulations and all the very good. Thank you. Happy Diwali to you.

Thank you. Ladies and gentlemen, In order to ensure that the management will be able to address questions from all the participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, please rejoin the queue. We will take our next question from the line of Abhijit Singh from Systematics Group. Please go ahead.

Yeah, thank you for the opportunity. So, my first question is, what is the impact of the disruption in the Middle East on our business in terms of imports or exports or raw material or any other impact that we are facing?

Nuruva, please.

We are guiding for 25% revenue growth for FI27. Which means our X-2 run rate of revenue growth is 20%, which seems to be conservative, given the order book we planned coming online by Diwali. So, I mean, I just wanted to understand, is there any other factor which could be impacting our execution going forward? Because, I mean, after the plan is commissioned, I think we should be able to execute, because we have a large order book. Which has, I mean, a substantial part of the order book was there even by Q4 of last year.

See, all the orders that we are getting currently are for, you know, beyond 12 months. So, or not beyond 12 months also, they are beyond 18 months. So, all those will be executable at FI 2930, right?

So, can you just how you calculated the 20% because even if we go by our guidance, etc., we still need to execute around 900-odd crores every quarter going forward.

That's right. Same, same calculation. So, 1,800 odd crores you would require for H2 and then last year H2 was about 1,500 odd crores. So, 20% on that is 1,800. But, but anyways, 1,500 to 1,800.

Yeah. Yeah, I think we are maintaining our, you know, 3,200 carols. So, I think we are good at getting it.

Understood. Understood, sir. So, second question is on the HPDC, you know, repair order that we had. So, we were undergoing from repair from PCC and there was one transformer, and then we were about to enter into HPDC manufacturing. Could you update her on the progress of that? How is it coming along?

So, we have already started the process of the engineering of the transform.

So, I just update. So, we are currently repairing the transformers. So, that will be another four to five months' time. Then the successful running of that transform will take another six to seven months. And then we will qualify for the manufacturing, and then we would start participating in the tender. So at least one and a half months, one and a half year is away from when we are speaking.

Understood. So five months of, you know, operation at our end, then we will give them, then they will test it for six, seven months, and then we are qualified for commercial orders. Sir, lastly, on data centers, are we supplying into data centers already, or is there a plan, or is there no plan?

If you ask the data, we are already a regular supplier to a lot of large data centers in India and abroad. So, we are manufacturing customers for data centers.

Understood, sir. So, thank you for answering the questions. I'll come back. Thank you. Thank you.

Thank you.

Now, can we take last few questions?

Alright. Yeah. Next question is from the line of Devriam Sandeep Sureka from Duwama. Please go ahead.

Good evening, team, and thank you for the opportunity. Am I audible?

Yes, we are audible.

Yes. Sir, I had just one question. My question is on the short circuit test. Simply complete dynamic short circuit testing for three transformers. Can you please help us with the type of these transformers and their KV rating?

Sir, could you speak a little bit slow? I could not understand what your question was.

Sir, no problem.

So, we completed dynamic short-circuit testing for three transformers. Can you please help me with the type of these transformers, whether they're power transformers, auto transformers, and their kV rating in terms of 220 kV, 400 kV?

So, these are 400kV auto-transformers, and sorry, auto-transformer power-transformers, yes, 400kV and 220kV.

Got it, sir. And, sir, who would be the customer, any specific customer in mind that we need to target through a short-circuit certification or any certifications that we need?

So, these are specific for specific customers or electricity boards mostly. Okay, sir. Got it. Thank you.

Thank you. Next question is from the line of Vijay Bhaseen from Inquired Equities. Please go ahead.

Hi. Thank you for the opportunity. I just have one quick question. If I look at your presentation slide 9, what is mentioned is the revenue potential of about 5,000 to 6,000 crores I'm going to talk to you about 7 lakhs per mV of realization. What you also understand from the industry dynamics is power transformer being at 5 lakhs per mV, distribution at about 10 lakhs per mV. And within high voltage, we are seeing pricing power being created by the limited supply dynamics. Thanks. Just wanted to double check if you are still maintaining, you know, the $1 billion of revenue guidance that you have been targeting, you know, from the past three to four quarters over the next two to three years. And second, a follow-up on this is whether you can see any spillover to F529, but let's say 30, 31, and whether that would be requiring for the CAPEX, either via QIP or OPSS or debt raise that you would be funding. Because if I do the match at about 90% capacity utilization of 75,000 MVA, and let's say you're finding a 7 lakh per MVA, your top line sort of is getting peaked at 5,000 crores in one single year. So I'm not able to understand that. That's my only question.

So, you are only taking transformer sales. We are also looking at bushing sales, press board sales, CRGO sales. We are also looking at CTC sales, our tank manufacturing unit, which is going to be one of the largest in Asia. So, with all these sales adding up, you know, we are pretty much sure we will reach 1 million.

And the timeline for this would be?

Never mind, please.

Yeah, it would be FI, FI, see late part of FI 29 or early 20.

Fair. Would you also be requiring?

A quarter here or there, but we are surely, we are very much well placed and we are very much aggressive in reaching that target. Sure.

Would you also be requiring further funding for this? No. Never mind.

No. Yeah, no. Because, see, we are already doing this capacity expansion, backward integration, projects, funding, etc. is already well planned. So, no additional capex.

Okay. The reason to ask that was, given your stretch working capital days, your pad to OCF conversion is slightly subdued to whether if I compare with the high voltage period group. So, that's fair. Thank you so much.

Thank you. Next question is from the line of Shreenarayan Mishra from Baroda BNP Paribas AMC. Please go ahead.

Hi, thanks for the opportunity. I just wanted to understand if we are executing any BESS transformer orders currently, and if so, how is the pipeline for BESS transformers looking like?

No, we are not currently executing any BESS pipeline. Right. But yes, there are inquiries that are currently ongoing, and we are sure that in this quarter we should get some orders for BESSs transformers.

How is that market is, sir? Any assessment if you have done?

Not. It's a pretty much new market for us, but we are trying to assess the market.

Okay, okay. Second question is, sir, on the CTC backward integration plan that was expected to be operational by Group QN. So, is that running now, and will we see some cost-saving from Group QN?

Yes, the plant will be operational from next quarter onwards, and it will take some time to stabilize, etc. So, from next financial year, we will start seeing some margin expansion coming from the backward integration projects.

I think CTC last quarter you guided for 2Q F527. Now you are delaying it by 6 months.

No, no. We are saying Q3.

So, see, in Q3, before Diwali, the plant will be commissioned. Currently, the plant and machinery is being installed. By Diwali, the plant will be commissioned. In November and December, we will do the first diagrams. And by bottom four this year, we should be commercially manufacturing CTC. But this CTC will be only for Terrain Transformers currently. And from Q1 next year, you will

So, 3,000 MTPA is the capacity. Of that, how much would be consumed captively?

Around 60% is captive.

Okay. Okay. Great. Thanks. Thanks for asking. Thank you.

Thank you. We will take the last question from the line of Sanjeev Zarbadev from Antic Stock Booking Limited. Please go ahead.

Thank you, sir. Thanks for taking my question and conversation on a good set of numbers.

I'm so sorry to interrupt. Can you speak a little louder, please?

Hello. Hello.

Yeah, now you can go ahead, please.

Yeah, sir, can you share the capacities of the various backward integration initiatives we have said?

I am so sorry to interrupt, Sanjeev.

We are not able to hear you properly. If you are using any external device, may I request you to kindly use your handset mode, please?

Yeah, yeah, sure. Sir, the other expenditure has been largely static on a year-on-year business, despite the significant increase in the revenue. So, what is the nature regarding the other expenditure, and would it be in the same range as a percentage of sales?

It would be in the same range because it is the multiple lasers that is there into the other items, mainly like freight, then the traveling, rent, etc. Then the foreign exchange gain loss, etc. That is there into other expense. So it will be mainly remain in that range.

And, sir, regarding the HVDC transformers, so normally we have seen that the HVDC equipment packages have gone to Hitachi and GE Varnova. So, they are also doing the, apart from the converter transformers, there is a lot of power electronics that is involved. So, what would What should be our strategy? Because if, say, a GE gets the HVDC package, so the converter transformer will also come from them only. So, how do we, where do we stand so far as the HVDC converter transformer?

So, we are also in the process of getting the converted transformers approved also. So, within, I think, within the next 18 months, we will fully be able to do the HVDC and converter transformers.

Okay. Okay, sir. That is it from my side. All the best. Thank you. Thank you.

Thank you. Ladies and gentlemen, that concludes our question and answer session. I now hand it back to the management for closing comments.

Thank you all for joining us today and for your active participation in the earnings conference call. We sincerely appreciate the continued trust, confidence, and support of our shareholders, Thank you. Thank you all, and happy Diwali to all.

Thank you, everybody. Happy Diwali to all, and see you at a better quarter next year, next quarter.

Thank you very much. On behalf of Transformers and Ectrify's India Limited, that concludes this conference. Thank you all for joining us today, and you may now disconnect your line.

Thank you.