Triveni Engineering & Industries Limited (TRIVENI) Q4 2026 Earnings Call Transcript

Ladies and Chairman, good day, and welcome to the Treveni Engineering and Industries Limited Earnings Conference Call. As a reminder, all participant lines remain 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 the operator by pressing star, then zero on your touch-tone telephone. Please note that this conference is being recorded. I will now hand the conference over to Mr. Gavin Deesa from CTR India for opening remarks. Thank you. And over to you.

Thank you. Good day, everyone, and a warm welcome to everyone participating in Srimini Engineering and Industry's Q4 and FY26 earnings call. We have with us today Mr. Tarun Soni, Vice Chairman and Managing Director, Mr. Suresh Saneja, Group CFO, Mr. Samir Sinha, CEO of Sugar Business, and Mr. Rajiv Rajpal, CEO of Power Transmission Business, as well as other members of the Senior Management Team. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature, and a statement to this effect has been included in the invite which was shared with you earlier. I would also like to emphasize that while this call is open to all invitees, it may not be broadcast or reproduced in any manner. I would like now to hand over to Mr. Tanan Sani to make his opening remarks. Over to you, Tanan.

Thank you, Gavin. Good afternoon, ladies and gentlemen, and welcome to the Q4 Fiscal 26 earnings call for Triveni Engineering and Industries Limited. It's a great pleasure to be with you today, and unusually, for the first time, we're having this call a few days after the results. Due to certain business exigencies and travel commitments, we wanted all the senior management team to be present for this very important and in some ways historic call. I'm delighted to inform you that the composite scheme of arrangement is effective on the 19th of May 2026 after the approval of the NCLT. The revenues from operations of the company, The net of exercise stood at... 6,291 crores, and the PBT stood at 378 crores. There was a strong turnaround in the operating performance of the distillery segment. In the power transmission business, the highlight was an order booking of 25% higher than previously, a significant increase of inquiries as well During this period? However, the engineering business's Q4 was impacted by global and domestic uncertainty, especially in a wide variety of industrial sectors, and I will be talking more about that and the future through this call. The board has also recommended a final dividend of Rs.25 per equity share. Looking at the consolidated financial results, 6,291 crores of revenues was a growth of 10.6% versus the previous fiscal year, and this expansion was propelled by stronger sales volumes in our sugar and distillery verticals, along with better sugar realizations. For the quarter under review, revenues stood at over 1,500 crores, which was slightly down from the previous corresponding. Primarily due to a calibrated scale-down of some ethanol dispatches aligning with the OMC's delivery timelines and also because of some short delivery deferments in the power transmission. We are reached. Thank you. Thank you. On a consolidated basis, it stood at 472 crores at the end of March 26, which was lower than the previous period, where it was 506-odd crores. I'm very proud to announce that post the scheme having been approved, ICRA has reaffirmed our long-term credit rating as AA-plus stable, lifting it from its previous underwatch status. And I think that's a return to the highest rating of Triveni Engineering historically, something that the business are quite proud of. Joining quickly to the operating businesses, I'll first talk about the sugar business. And in this vertical, we delivered a stable baseline profitability despite the ambient agricultural challenges, the revenues. The PBIT grew very marginally and ended up at about 272 crores. The sugarcane crush for the 25-26 season ended at 8.25 million tons, lower by 8.8 million tons. Thank you. The steepest decline in cane crushing was witnessed in Western Uttar Pradesh, 17%, where our significant capacities are. And this was a little bit of a surprise, very honestly speaking, to the management team. And a lot of that had to do with aggressive diversion towards the good and khansari sectors, where they were paying aggressive amounts for... The fact that the central government is looking at a revision in the sugarcate control order, which will also look at a revision. That under the central ambit, which will then rein in the same kind of conformity that is much desired to have a progressive ecosystem. And to the Indian sugarcane farmer. Our Katholi unit, having said that, in Western Uttar Pradesh, was the only one in the state to cross 200 lakh controls of crushing capacity during this season. We are, of course, very hopeful for all of these. And I'll discuss that when I look, give you the output and outlook. Furthermore, an upward revision of export power tariffs with defective 1st of April 24 under the UBERC regulations brought an additional 31 crores. The country of sugar, as on the 31st of March 26th, stood at a shade under 60 lakh quittles, and it was valued at 38.1 rupees per kilo, absorbing the impact of the increase. Thank you. We have achieved an outstanding operational turnaround, posting its highest ever production and sales volume in fiscal 26. Annual revenue, net of excise. This has been a... Slightly lower to 61 rupees per liter. FCI rice allocated ethanol, which carries a relatively lower pricing than maize. The volume growth more than compensated for this variance. Grain-based feedstock constituted 56% of our total ethanol sales in the year. We have secured a solid allocation pipeline of 17.18 crore liters under cycle one of the OMCs and the private tender programs, and we expect further ...allocations of ethanol, both from the OMCs and private tender in the... I think it is this legal issue that's happened in the south of the country that has really played havoc with the ethanol blending program at a time when the nation actually needs as much ethanol, because there has been a... I cannot certify as to where and when, etc., but these are certainly press reports that have gone out, and it kind of makes sense at a point in time where the rupee has created a little bit of havoc and the import bill is only rising in one direction. Our branded I&IL business outperformed the broader industry growth metrics in Muttapadish as well, solidifying its position amongst the top five players in this business within the state of Muttapadish. Turning very quickly to our engineering businesses, I'd like to focus first on the power transmission business. Our power transmission business has experienced a challenging quarter under review, and this was because of some order finalization issues in the steam turbine and other turbine markets for domestic projects as well as for some European and Middle Eastern projects, especially in the fourth quarter. And this was... The geopolitical inactivity in West Asia. I think that would be the most significant contributor, actually had some delays in terms of our customers and OEMs accepting completed or near completed. I'm very happy that the inquiry book has been even more robust, and in fact, our order booking, as I mentioned in my opening remarks, And therefore, the future, very honestly speaking, actually holds great promise for this business, especially the present fiscal year. During the Q4, a business secured a landmark order of an axial compressor test gearbox from a premier defense establishment, the first of a kind in Asia, and one of the very few orders for this type of gearbox that have been placed anywhere in the world. This is a breakthrough order. For supply of a test rig, along with all the electricals and mechanical equipment, a very comprehensive scope, and actually gives a broader scope of just beyond just the gearbox, and adds a newer dimension of adding more bells and whistles of great value to the gearbox. Just for this stream, but also for other Gearbox streams. Thank you. I would like to mention, and we've talked about it, and I'm sure there may be a question coming up. I'm going to preempt it by saying that the CapEx, that the board of Triveni Engineering has approved in three tranches, totals about 300, totals exactly 340 crores. For the gearbox business, this represents an output of about 700 crores based on the product mix. It could be higher also, very honestly speaking. And does not reflect the output of the defense facility. I want to mention that, and of course, all of this capex is anticipated to be complete by, as we have previously mentioned, September 26. 231 crores has been incurred up to... 109 crores. Exactly in plan. and having no material impact This has been very, very important. Of course, as power transmission migrates into Treveni Power Transmission Limited, the company is armed with sufficient cash flows and a balance sheet to be able to incur all of this capex and opex. Turning quickly to the water business, the consolidated revenues of our water business increased by 15% to 270-odd crores, driven by an acceleration in execution of our EBC portfolio. The prior year's PVIT also included a one-time favorable arbitration award, making the normalized underlying operational profitability for fiscal 2020. And I think that holds very well and is reflective. Thank you. Now, what does that mean for India? It means that there could be an impact. Water stress is primarily in the central and southern part of the country and towards the eastern part. These places can feel the stress because they do rely more heavily on monsoons and on the monsoon, of course, filling not just groundwater but also the dams. In Western Uttar Pradesh, I have always maintained that we are relatively insulated because we get a lot of Himalayan melted water, etc. In fact, the problem for the last few years has been of excess water, not of less water. Standing water for three, four, five weeks. Now, that's actually speaking in a scenario when, you know, actually doesn't happen. So, there is a significant possibility. of early maturity of the sugarcane crop. I think that is what we're sensing. We've had excellent planting. The planting, of course, is over. We've had excellent planting across our sugar factories. And the anticipation is for Western Central Uttar Pradesh that there could be an earlier maturing if there is less rainfall of the sugarcane crop. And that ties in very well because you have an early Diwali, which, frankly speaking, always is a signal for the start of the sugar season. We are actively formulating policies for applications in quote-unquote beyond E20. There has been ample coverage in newspapers and ample discussion in government circles on applications of higher than 20%. I alluded to a little bit higher being tried in cities. Certainly, that is a distinct possibility. Thank you. In addition, draft notification amendments for the CMVR, the Central Motor Vehicle Rules of 1989, propose a higher inclusion of ethanol blends under the emission norms and providing a regulatory basis for formal introduction of FFVs and isobutanol-blended diesel-capable vehicles in India. You will be happy to know that one of the leading car manufacturers this year has had a very important... Thank you very much. Pricing of Ethical from sugarcane-based feedstocks to match cane price and also of grain-based feedstocks. My hope is that as we approach October and the next tender, there is a good deal of... In a sector which actually has not benefited from any pricing increase of note over the last two years. Within the power transmission business, our strategic push is to clearly move towards, of course, the independent lifting of TPTL. Our capital expenditure programs are progressing very smoothly, and I've already covered that in my opening remarks. The export market continues to be the major growth driver of the business. The establishment of our Swiss subsidiary has provided huge engine of growth, as we're seeing in terms of our order book as well as our inquiry. The qualification orders for pumps and compressors supplied to major customers will increase. A lot of which is under commissioning now, already having been discussed. To be added another significant push for the business. Compressor testing is emerging as a promising growth segment for supplies in Europe, especially, and in the Middle East. And as you are aware, there's a very important pipeline being built urgently in the Middle East. And there's quite a lot of questions. The market remains for it. Stricter environmental clients, including the liquid discharge management rules and the expanding corporate ZLD norms are driving commercial demand for water recycle and reuse infrastructure, where an area where our technological excellence is highly competitive. So I'm hopeful that we. Before I open up the floor for questions, I'd like to just offer a comment on the demerger. As I mentioned at the very outset of this call, the approval of NCLT has been granted on the 19th of May and has been informed of the stock exchanges and the ROC. The appointed date for the scheme is the 1st of April 25, and the appointed date for the demerger is the 1st of April 2026. In respect to the record date, we have two record dates. The issuance of shares for Sir Shadilal, a group company of Thriveni, is the 3rd of June. That is the record date for the issuance of shares to Sir Shadilal shareholders. For the issuance of shares for Thriveni Engineering shareholders, I anticipate that over the next four weeks, we will be able to set the record date. This is subject to the approvals of the stock exchange. For the dispersal of shares to the shareholders, in a nutshell, one is anticipating that by the end of August, we will have a listing of Thriveni power transmission. All those on this call and other investors of Triveni Engineering. This will probably be after our Q1 board meetings for TIL as well as TBT. Thank you.

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use their handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants who wish to ask a question, please press star and 1. We take the first question from the line of Ashish Ajit Gulecha from B-Ventures LLP. Please go ahead.

Yes. Hi, sir. Good afternoon. I hope you are able to hear me.

Yes, I can hear you very well. Please go ahead.

Yes. Yes. Sir, my question, there were two questions. First, I'll ask the first question, and then I'll come on the second question. You had basically planned a cafe for a multimodal facility. to the defense, you were planning something on the propulsion path, if you could throw some light on that, and also wanted to understand the next three to four year plan with respect to PTB, because I understand that you are in talks with Aramco, Rolls-Rice, and also you are targeting basically a good addressable market with respect to exports. If you could throw light on this, Okay.

The first question is actually two questions, but happy to answer that. With respect to the capex for the defense facility, as I mentioned in my opening remarks, of the 231 crores that has been already incurred by the 31st of March this year, 78 crores has been for the defense facility. Of the balance, 109, a small portion of that is also for the defense facility. But this Moisting Modus facility is now fully approved. It's a short distance from our earlier facility. It will cater to not just propulsion shafting, but also a wide variety of other projects that the company has won. I'm combining the second part of your question with this in terms of the future development, the future market, both as far as defense is concerned, as well as gearboxes. As far as defense, yes, we've had significant and good success with the Indian Navy as far as mechanical products are concerned. For that, technology partnerships with some of the largest and best-known firms has been essential, and it will continue to happen in the future in order to be able to expand our value proposition to our naval customers. However, the defense business is looking at other parts of Indian defense and providing mechanical solutions to them as we speak as well. We have not had success with the Army or Navy. with the Indian Navy that actually has significant CAPEX plans. In terms of revamping and new builds of vessels as per the DPP, which has already been published and is available for you to download. With respect to the gears business, there are a variety of relationships that continue, primarily in terms of technology and development, etc. But I'm afraid we do not give forward-looking and advanced estimates. The fact is that... that as the entire addressable market. Caveat to that is areas where, or rather third parties where we do not have AVL, approved vendor listings. Those are things that are being worked on very, very actively. One such company you've taken the name of in your question. And we are very aggressively working on getting those AVLs done so that we have absolutely no restrictions in the actual, in the overall high-speed gearbox market. But yet again, let me say that we don't give forward looking. I'm afraid I'm...

The second question is, with respect to the Atman, Nirbhar, Bharat, and Making India programs, they are treating significant opportunities for indigenization of imported gearbox installations in PSU units, and the trend is further expected to increase. So, one is to understand how is the company focused for this aftermarket business as well as this different business, because the government itself is batting...

Right. You know, in terms of indigenization of technologies, I mean, actually, Stravini doesn't need to indigenize any further technologies. As far as high-speed gearboxes are concerned, we have the entire gamut of technologies. So neither do we need to partner with anybody, nor do we need to... Yes, we continue to improve, and there's research and development to continue to improve. As far as make in India or buy in India is concerned, we've had the support of all parts of the Indian government, and we have a huge market share. So I don't see that as being any different in years past. We are seeing a lot of support by the Indian Navy, and we have been successful in gaining some orders, and there are many important tenders that are pending. However, for marine gearboxes, we do intend on having some collaborations for that specific thing, but that is not a high-speed gearbox technique. It's a heavily specialized gearbox. We have a wide variety of relationships in that, and we are very hopeful of gaining the same kind of market share that we have in the high school. Aftermarket, we have a significant aftermarket team in-house. to reach a customer within 24 hours, and I think a lot of our proposition for the aftermarket is very compelling, not just for India, and as we roll it out internationally, it will be even more compelling. Now, this actually is catered towards other people's gearboxes, not primarily make gearboxes, and it's about not just replacing or repairing, but also about providing upgrades and downgrades technologically, and providing unique technological solutions to other peoples and other makes of gearboxes, of which we have pretty much repaired and refurbished almost every single make in our 50-year history. I hope that answers your question.

Yes, sir, thank you so much. Sir, can we expect PTV listing in the next one year, please?

I think I've just answered that question already earlier in the call.

Yes, thank you. Thank you. We take the next question from the line of Siddharth Shah from SRS Capital. Please go ahead.

Yes, hi. You know, on the high-speed gearboxes, you mentioned the pumps and compressors segment. Are we also working on the gas segment? You know, I think in the last quarter you mentioned you're seeing a lot of traction there. With that, can that be a big growth like for us going forward as well, especially in the export market? One percent.

We are working on qualification orders because they are. You see, the gas infrastructure domestically is very, very little. And it's only for a few models of gas turbines of which we have been supplying those gearboxes. But the real growth in the gas market actually is in the medium and small scale. As gas turbines and engines get paired to data centers, especially in the United States and other parts of the world where there's been a boom in that sector. For us, I'm supplying into that. The ADL. There's a lot of marketing that has been happening. As an opportunity and hope to develop quite significantly.

Understood. And from a technology perspective, I know you just mentioned actually that we have the full gamut and range of technology required. So that is not something we have to work on. You know, just my second question was, you know, I think rank...

Yes, we are seeing rank pop up more in terms of tenders. I don't think it really has changed our competitive positioning. I think the value proposition that we bring is still very compelling. I can't comment on that specific company, because then I don't want to comment on drinks operations. What I can comment is on our history. This has happened in the past as well, 15 years ago. Packaging facility in India, and eventually they decided that it was not competitive and they would focus on their home market in Europe. Whether it is only for high speed, because Renk actually has a huge portfolio of low speed, as well as defense gearboxes and activities. I don't know what exactly is happening at that said facility. Competition for high speed gearboxes, yes, we're seeing their name more. Are they winning more? No, I don't think so.

Got it. Thanks for that background.

Thank you. Participants who wish to ask a question, please press star and 1. We take the next question from the line of Somnath Saha from 360, one capital. Please go ahead.

Yes, you are. Please carry on.

You know, during the just-concluded season for 25-26, we crushed 8.25 lakh metals with a gross recovery of 11.03.

Okay, sir. Secondly, if you can help with the order intro for the water business during the financial year.

For water business during this year is 165 crores.

165 crores. That's right. So, as I've already mentioned, the capix for the UBR business of 340 crores.

Can I just recap how much is for the defense part?

Yes, of the Q31 crores that has already been incurred by 31st of March, 78 of that has been for the defense business. Of the 109 crores that is balanced, which will be incurred in Q1 fiscal 27 and Q2 fiscal 37, a smaller portion is still pending. I would anticipate about 40% of what is pending will be for the defense business.

Okay, thank you, sir. Lastly, if you can give us a sense of how much the maize landed cost currently for your history part and how the margins are going on.

The maize cost over here right now is much lower than last year, and we are anticipating that it would be lower to the extent of about 75 to 80 paise. However, we have to be careful in terms of the rupee depreciation because the exports to that extent increases, but otherwise we are seeing a much lower pricing versus last year.

I'll get to the key. Thank you.

We take the next question from the line of Lakshmi Narayan, KG, from Tunga Investment. Please go ahead.

Yeah, thank you. My questions are pertaining to the power transmission business. If I just look at the business, that is...

Lakshmi, I do apologize to interrupt you, but your audio is not coming in clear. Could you please use your handset and we'll see it with your question.

Yeah. Is it better? Yes, it's better. I just want to understand the PTP business, and there is something that would come from effects-related projects, and some of them would come from just refurbishment. For example, let's say in a cement factory, you have a captive power plant, and they want to change the gearbox after a couple of years. You would have a play there. So, I just want to understand, if you just look at the overall business mix, how much will come from the, you know, CapEx part, and how much would come from these OPEX-related things, and whether that has actually changed in the last one year. That is the first question related to domestic PTP business. Second, I understand that as we expand in international markets, one of the key reasons to succeed is to have distribution partners or tie-ups with certain firms who would actually in turn work with the end clients. It could be EPC contractors or whoever it is. So, in the second front, I just want to understand how our progress has been in the last one year, because I understand that we have been accelerating our partnerships in European markets in particular.

Okay, I'm going to answer the question in terms of the way that we actually disclose data. It's slightly different to the way that you've asked the question, but I do appreciate how you asked it. It is the way that one should actually look at sales, frankly speaking. We don't typically give out data to segment between original equipment sales as well as replacement sales of original equipment, okay, because, and I'll tell you why. The customer of ours is typically the same. So, for a new project, if we are selling to either a Siemens or a Mitsubishi or a Triveni turbine or to an Atlas Copco or a BHEL, and the list can go on, typically it is our OEMs that are securing the overall order with the end customer for a new gearbox, okay? Thank you. The market share was about 40% of overall years. So that is part of the reason why even with slightly lower revenues, profitability, margins, etc., are very, very good and remain unabated despite a slightly lower revenue and higher overheads, obviously, as time has elapsed. That's one. Looking at this particular market globally, it remains exactly the same. You mentioned resellers and retailers. So unlike low-speed gearboxes, which are catalog unit products, you know, are sold on an axis, frankly speaking, and can be stocked and can just, you know, etc. All are heavily engineered gearboxes, which are customized. to be engineered and then supplied uniquely. So we can't operate within the same type of retail type system that other companies within the industrial landscape. The Atlas Copco, Mitsubishi. I'm giving you a smattering of names. The list is very, very extensive. It is the same OEM that will buy in Germany. Whatever their plants are, they will be buying. So it is about marketing to the supply chain teams in said geographies. And that is something that we do aggressively and we do that internally. We don't outsource that. That is a critical part of our value proposition and something that actually creates a lot of stickiness. Why does it create stickiness? Because we are able to give responses to inquiries in the shortest possible. Our IT development continuously is about reducing the time it takes to give very complex quotations so that an OEM of ours has that comfort that they can get it so much faster than anybody else that this is the firm to partner with going forward. And that has been part of our USP. Especially when we look at the oil and gas segment. So people who buy on American Petroleum Institute... And that, of course, is an odd work process. We have had a huge... We have accelerated. All mechanical companies that have engineers, etc., that can go out two dimensions, have relationships with third parties, third party users, and secure. Aftermarket business for us, because aftermarket business needs proximity. It needs somebody to be at the site, take dimensions, and convince end users that Sriveni is the solution provider for any problem, especially when it's a gearbox for somebody else's make. That is a program that is ongoing. That is a program that needs a lot of strategic attention by the business and by the marketing teams. And, yes, we've had successes, but there is a long way to go as far as that is concerned. Domestically, our aftermarket business is handled by a very professional and strong team in Mysore. We don't need anybody else to be able to do that. You know, in fact, we're the first port of call for not just our gearboxes, but everybody's gearboxes pretty much across the country. I hope that answers your question.

Yeah, that's helpful. Just one more question. If I just do a cursory glance across some of the results by steel companies, cement companies, and paper companies, et cetera, I get a mixed... Uh, uh, uh, You know, reviews that some of the cement companies are reducing their capex, even the large ones, and some of the steel companies want to sharpen their capex, and they want to actually de-bottleneck and things like that. Now, how much that is actually, which from your vantage point you are seeing, that would potentially would give some kind of a, you know, pathway into, you know, one or two years ahead?

So, you asked a very, very important question, very honestly speaking, and I can't offer you any core numbers, but I can offer you a sentimental picture, very honestly. In Q3 and Q4, we did see domestic Indian industry re-looking at the way that they were incurring CAPEX. That had an impact. That had an impact in terms of our OEMs, etc. However, a lot of that has changed in Q1. In Q1, we've seen a huge amount of domestic inquiries coming from the two sectors that you mentioned, plus a whole load more, a whole load more. It is the same trend that actually happens globally, except globally it's a much larger market with the same industries and many, many more players that actually are there. I think the rupee depreciation will make... This year, and this quarter, next quarter, et cetera, and moving forward, very, very competitive and compelling. So as you see a realignment, basically rupees and dollars and euros being spent more carefully, with more care in terms of efficiency, et cetera, I think that TPTL will actually be a great beneficiary for that, simply because of our price point, simply because of our efficiencies, and because of our time to produce and deliver.

All right. Thank you so much. Thank you. Participants who wish to ask a question, please press star and one. We take the next question from the line of Tanuj Nagalia from SKP Securities. Please go ahead.

Thanks for the opportunity. Uh, so can I get to know what is the margin impact after the de-merger? Like, do we see any positive side or negative side in the PTE business?

As regards to the P2P business, it has got its own dynamics, as a matter of fact, and so far we have been maintaining about 35% PBIT. I think the same trend is expected to continue in the future also.

Okay, my second question will be, can you give me a breakup of like, how much was the ethanol production through maize, if that's not a good thing?

So we can talk about the product mix of this year, wherein the total maize over here was about 33% versus, come down a little bit from 44%, but that was largely because the ESY tender said that 40% of all grain allocation has to come from.

Okay. And what was the breakup of the entire grain portion of the total production?

So, in the total product mix, it was about 56% was the grain feed stock.

Okay. And can you give us like expectation about crushing numbers like will the season be better than the previous season or?

So, you know, if one had a magic hole, we would certainly be able to tell you, and, you know, if you refer to my opening remarks, in the month, in early June, it is the only thing that we can talk about is planting. And the survey of planting, let me just go over the process because I think it's important that you understand the entire process and what one can expect over weeks and calendar months. The planting in Uttar Pradesh classically starts off in the month of March and finishes just after wheat harvesting and can conclude by the end of May. However, this year it was concluded by the first half of May. By the 10th of May, pretty much all of it was. The next process after that is because internally we have got enough checks and controls to figure out how much planting has happened, but you have an official survey that is done for the Uttar Pradesh state. Thank you. That will give us a much better picture as we approach the start of the season, to have more effective control and analysis of how much cane is there. But at this point in time, it is very difficult to tell, because what we know is that the planting has happened, it's been better, and disease thus far compared to last year has been much, much better than before. And pest, not disease. Pest has been much, much better than before. So it looks good, but there is so much more to come.

Okay. Got it. Thank you so much for that detailed explanation. So this last question, like, uh, compared to last year, your display business has performed very well. So I wanted to know whether the conversion, uh, costs has decreased in the business or not compared to FY25.

Yeah, so compared to that, the conversion cost definitely after accounting for byproduct credit, et cetera, has significantly come down, and this, coupled with the decrease in the raw material cost, has led to the significant turnaround in the performance.

Okay. Can you give me a number like how much the conversion cost has decreased?

We try not to give that.

Okay. Okay. Got it. Got it. Thank you so much.

Thank you. We take the next question from the line of Radesh Majumdar from 361 Capital. Please go ahead.

Yeah, good evening, everyone. So, I had a few questions, sir. The first one is on the working capital. The short-term debt is very, very high compared to inventory position. So, I would assume that the large part of it is also due to the water business. Is it possible to quantify the kind of receivables, etc., we have in the water business?

You know, in the case of, I think, the total receivables are about 500 crores. If you look at water business, that will be approximately about 125 to 150 crores. That is because of the nature of their business. Mostly, they do EPC business. So, therefore, the receivables are normally higher in this kind of an industry. Now, as far as the cash credit is concerned, You know, you must realize that there has been an increase in the gain price also. As a result of increase in gain price, you require a higher working capital. So that's why the short-term warrants is a little higher. Now, this is something which you would find from the month April onwards, it would very rapidly and rapidly start decreasing. So that by September or so, September or October or so, it would almost be at zero level.

Secondly, sir, this policy of maize versus broken rice, how do we eat it? I mean, you had earlier mentioned that because of maize prices falling, the ethanol profitability will improve, but that doesn't seem to be happening despite maize prices falling. So where is the guarantee that the government policy on rice versus maize will continue interfering with our ethanol levita in the future as well? Or if it could give us some color on the FY27 kind of grain?

So, in terms of the profitability of the distillery, it's gone up significantly, and that's also to do largely with the performance of the grain distilleries, which I just mentioned, wherein both the convergent costs as well as the raw material costs have come down significantly, and therefore enhance the profitability. And we have been doing, we have been very dynamically looking at all the feedstocks that are possible, and in terms of broken rice, we find maize far more competitive as of now. In terms of the EBITDAs going forward, it would all depend on what you are able to do in the next ethanol tender year, and that is something, and what are the conditions over there that we need to be aware of, and how much content. And having said that, let's say that base has the largest margin followed by...

And while Samir and I are trying to give you that rational explanation, November become most paramount. I've been in the newspapers about its massive number one rice, you know, And so, logically, it showcases to me that the push is going to be towards rice. Now, there is a huge difference in the margin structure, whether we look at SCI rice, or we look at broken rice, or we look at any other variant of rice. And frankly speaking, I think that is the nimbleness and the... The discretion that MOPNG and the various government departments that have an impact on the EBP policy will have in terms of pushing out the margins, etc. The good thing, the very good thing, is that unless a proper price increase is given, you're not going to see huge increases in available quantities as we start looking at massive quantities for E85. Will that happen for the ethanol blending year for 27-28? I think that's a bit premature, to be honest. But it will certainly be something to be considered for subsequent years.

And one last question from my side is, what is the export mix in the PTV business for the year? And we had earlier, actually, a related question, we had earlier been talking about the fact that after the technology tie-up with Lufkin, we have access to a lot of global markets, and the export share will continuously go up. So what has happened in this regard, and when do we see that kind of playing out in our numbers?

Rajesh, I am not going to answer your question. I'll tell you why. The real reason is because Q4 was not a good quarter for the PTP business. It is a blimp. It is a significant blip, but it is a blip of one quarter in time due to global changes where we had a lot of gearboxes that were scheduled to be exported that are unfinished goods in the business and are not exported and will be exported during this quarter and some in the following quarter. Now, the trend towards higher exports is certainly there. The inquiry book is massively skewed towards export orders. Both from domestic OEMs as well as global OEMs, taking product out of the country. And that has an impact on profitability margins, etc., obviously, and is an exciting growth trend for the business. But to reflect on the data of the year going by in terms of that increasing trend, unfortunately, does not give you the accurate picture because of the events of Q4.

Right. I mean, so how should we lead it going forward in that case? If we could give us some color as to what proportions, say, two, three years out, the exports would be as a percentage of sales from the PPP business, that could also be useful.

Yeah, I think the growth target says that exports, as far as original equipment is concerned, should be more than half in the very near future. A lot of it is going to come from Indian OEMs exporting their products. with the gearbox abroad, as well as deliveries of gearbox to in the very, very near future.

That's useful. Thank you.

Thank you. We take the next question from the line of Reishem Jain from VVD Asset Managers. Please go ahead.

Yeah, hi. So, I have three questions. The first one is, in the defense business, what kind of order size which we can have? Like, is it like a smaller, dismal kind of orders, or these are like typically larger orders? What is that we are looking for?

Okay. Resham, the orders in the defense business, I don't know what you would define as large or small, but if I look at it from the perspective of a gearbox, because that is the business where our defense business has been incubated and is growing, it is a much larger size than the value of a gearbox. Okay? So, from our perspective, it is a significant value and order business. Now, the orders that we've been receiving are in double-digit cross to triple-digit cross. The delivery of said orders is between one or two years, sometimes to three or four years. We are yet to receive orders that are part of the 10-year programs, etc., but I think we're well on the way in terms of getting those orders, and you can just multiply the size, frankly speaking. The good thing, of course, is that a lot of the orders that we're getting are repeatable. Which means that the government has, and that may be, has the ability, without a fresh tender, of assigning it to the person that has won it the first time over. That is why technical decisions that are being taken now under the latest PPP are very important, especially for a company like Treveni.

The second and the third question is with respect to the overall sugar business, where given the overall volatility in policies in the last two, three years, the tilt towards capex is more in the engineering business, while we are a little slow, I guess, on the sugar. But going forward, with the overall mix of ethanol changing from sugar towards grains, How are we looking at the overall capex, let's say, in the next two, three years, just from a thoughts perspective, and from where the growth can come in the sugar business overall?

Right. Okay, so there are multiple places where growth can come. Within sugar, of course, there's so much work that is happening on varietal replacement of 238, so adding the yields and therefore top-line growth by processing more cane. The addition of the Shamli factory and the return of Shamli to its crush levels that are expected by our management team is another area of increase. From a profitability perspective, the capexes that are presently being incurred is only to lower the cost of production within sugar. Turning towards the distillery business, I think the ethanol tender this year has been a huge disappointment. R2, R3, we should have been at R4. We haven't even had R2 this year. And so the growth organically in the ethanol business that should have happened has not actually happened this year. And I anticipate in future years you will see that. Having said that, for Triveni, we are seeing some capacities being debottled next. And most importantly, we have the distillery at Shambli, which has not operated since we acquired the unit, that will add to our capacity and top line. For the distillery business, and this is without incurring any new capexes for greenfield or brownfield expansion. So this is just organic growth. Of course, with the cash flows that the company is generating, you can look forward to policy-related, or favorable policy-related greenfield and brownfield expansions within our commodities business of sugar.

That's it from my side. All the best. Thank you.

Thank you. We take the next question from the line of Siddharth Shah from SRS Capital. Please go ahead.

Yeah, thanks. You know, I just had one question on the aftermarket business. I just broadly wanted to understand, why are the OEMs, why are the other manufacturers we are competing with letting this business go? And letting us kind of replace or, you know, refurbish their gears. Is it just a question of cost, or are there some other factors at play?

So, I'll answer your question in detail. It really depends on what the aftermarket solution is. Okay, so what exactly is aftermarket solution? It could be, and it's not limited to, is a gearbox that fails. Okay, so what you do is you get the exact same gearbox with the same dimensions and replace it. A second solution could be that your pull gear or some of your gear teeth get chipped off, and during the annual maintenance, you do some replacement of parts, or perhaps the entire gear train, or you do a bearing replacements, etc., or wear and tear. That's the second. The third could be a speed upgrade and a speed downgrade. The fourth could be a complete refurbishment because the footprint of where the gearbox actually sits does not change. It adds value. And you can go out and put in a much bigger gearbox in the same footprint designed by a company like Treleny, for example, as part of our compelling value proposition. And then there are other variants of aftermarket sales and service. What distinguishes us in each one of these various segments is different. Now, in the overall, in the classical aftermarket that you probably were thinking about, there... Thank you. the relationships. Which is why domestically we have such a fantastic market share, because of the service that we can provide. That is not product. Now I'm coming to the service side of it. Internationally, it's going to be a challenge. Obviously, because we're based in India, we don't have somebody sitting in Argentina, we don't have somebody sitting in South Korea, I'm just taking two countries' names as examples. And how we're going to develop solutions around that will be with local partners. And then as the business progresses with other remaining staff that sit in international locations, etc. But that is something that people have to bridge. So not just on the product side, but also being able to add the service, which then leads into guaranteeing product orders. But it's a complex arrangement. I think the fact that we can do it at a lower price point also plays a very significant part. of the value proposition. Sometimes we are a fraction of what is usually offered by the original equipment gearbox manufacturer to a client. A fraction. And yet, you know, it's a highly profitable business for us.

Got it. Sorry, just to clarify, you don't think our aftermarket time to delivery is one of, like, our competitive stress, the fact that we have, like, a dedicated aftermarket bay of facilities just focused on that where maybe some other people want?

I'm glad that you asked that question. Yes, the new aftermarket bay facility is to further accelerate the time for delivery. So, we are looking at further beating what we do well already. Why? Because today to be able to export an aftermarket solution needs even faster time because we can't do anything to accelerate shipping. So what can we do from a production perspective to be even faster? And we've done that already. So, you know, the team that runs the aftermarket part of this business is extremely entrepreneurial. They are constantly reinventing the product and the solution. And part of that, of course, was the infrastructure for that was in the new repair facility in Verso.

This is very helpful. Thank you so much for clarifying on this. Thank you.

As there are no further questions from the participants, I now hand the conference over to Mr. Tarun Thawney for his closing comments.

Ladies and gentlemen, thank you very much for joining us for this Earnings Conference poll. I think we've had a productive discussion. We're at a very important inflection point for Treveni. The growth trajectory for TPTL looks... Extremely robust. We're very excited about the new journey, as that company and that business also completes its 50th year, a year worth being celebrated. As far as Traveni Engineering is concerned, there's a lot of excitement in both the commodities parts of the business. I think it's unfortunate that El Nino has such a devastating impact, but for the sugar industry, it can only be considered positive in some respects. Distillery business is concerned. We've seen what's happened with oil power prices, with the rupee, and with the government's renewed push and look at higher blends and more ethanol. I'm personally very excited about the next path of that business as well. Our water business, too, continues very, very well in terms of its progress as well. I look forward to discussing. Both Traveni Engineering and Traveni Power Transmission with you separately.

Thank you. On behalf of Triveni Engineering and Industries Limited, that concludes this conference call. Thank you for joining us, and you may now disconnect your line.