TARIL — earnings call
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Prepared remarks
Moderator · Conference Operator
MR. DHIRENDRA TIWARI – ANTIQUE STOCK BROKING
LIMITED · Management
Transformers and Rectifiers (India) Limited August 01, 2025
Moderator · Conference Operator
Ladies and gentlemen, good day, and welcome to the Transformers and Rectifiers India Limited
Questions and answers
“Transformers and Rectifiers (India) Limited Q1 FY '25 Conference Call” August 01, 2025
Moderator · Conference Operator
The first question is from the line of Manish Ostwal from Nirmal Bang.
Manish Ostwal
Good set of numbers, another great execution in the business.
My question on our annual report, which we have released recently.
So there's a trade receivable in the non-current assets which is sitting INR336 crores versus INR2 crores last year.
So can you explain why the trade receivable is sitting in the noncurrent asset, basically, to understand because it should be part of the -- your current assets.
So why we have put it that way?
Chanchal Rajora
Manish, thank you for this question, and welcome on this call.
Manish these are the noncurrent nature receivables, which includes the retention money, which we are going to get from the utilities in 1 to 1.5 year time and also it includes the revenue debtors which are not immediately due for the payments.
So this classification has been done by our auditors on their advice to understand better the exact trade receivable cycle what company is having.
Manish Ostwal
So what is the typical time frame to receive this money of INR336 crores?
Chanchal Rajora
Look, this is not INR336 crores, out of INR336 crores around INR180 crores was around on the retention money, which we basically get in 12 to 15 months' time with the utilities.
And it is a continuous process, which is keep coming.
Next question please, Shruti.
Moderator · Conference Operator
The next question is from the line of Samarth Khandelwal from ICICI Securities.
Samarth Khandelwal
Sir, firstly, congratulations on the performance.
So my question is regarding what would be the size of specialty transformers for the company as opportunities?
Satyen Mamtora
Sorry, I didn't get your question.
Samarth Khandelwal
The size of special duty transformers that the company has.
So what would be the annual...
Satyen Mamtora
It's around 35% of the turnover.
Moderator · Conference Operator
The next question is from the line of Raj Sarraf from Finvetors.
Raj Sarraf
Congratulations first of all for posting once again very stellar set of numbers.
So just wanted to ask the margin which is bumped up if I compare the same from last financial year quarter 1.
So is it sustainable?
And what would be -- how we assess the PAT margin going forward keeping all backward integration keeping in mind, which is coming in the next 3, 4, 5 quarters?
Satyen Mamtora
Raj, yes the margins are sustainable.
Backward integration is going to help us in a great deal in terms of protecting our profits, but also with Mukul sir joining us, we are working towards operational excellence, and we are working towards how to grow operational profit.
So that is going to help us more in terms of -- not raw material cost, but in terms of how efficiently we run our plants now.
So that is going to help us a lot in securing our margins.
Chanchal Rajora
And Raj, just to continue what our MD has told just now, if you see that last 3 quarters, quarter- by-quarter, we are strengthening our margins.
And this shows the trend is sustainable and on the right direction.
Transformers and Rectifiers (India) Limited August 01, 2025
Raj Sarraf
Okay.
And just one other question.
Now if I see government of India target to have a solution of high voltage transformer that is going to be actually double than the last we have done in financial year '25.
So though we have targeted the number of INR3,500 crores that is very phenomenal, so what is the -- by seeing the execution capacity and the capacity which is coming on right now to execute, so is the execution can be in line with what is the country going to install the capacity going forward?
Chanchal Rajora
Every transformer manufacturer is trying to align itself towards the country demand.
And we are also working on that direction and we hope that we all will be able to cater the country's requirements pretty soon.
Raj Sarraf
Okay sir.
Any ballpark number, sir, if you can guide us for margin and PAT margins going forward?
Chanchal Rajora
We are at the levels which are already going on has been -- I have been telling throughout my call that around 17%, 18% is the numbers, which is a sustainable number and we are working on that direction and we are delivering that numbers.
Right?
Raj Sarraf
Once again congratulations and wish you best luck for the future.
Moderator · Conference Operator
The next question is from the line of Ashish Soni from Family Office.
INR18,000 crore order book, when do you expect and what percentage are we expecting to convert for next...
Chanchal Rajora
How much?
You have INR18,000 crore order book, right?
Chanchal Rajora
No, no. these are inquiries under negotiation.
Yes, yes.
So that one, how many are you expecting in the next 2 quarters or 3 quarters out of that?
Satyen Mamtora
So we should be closing our order book next year at around INR5,000 crores.
But I think you guided -- if I recollect last quarter, you guided...
Satyen Mamtora
The INR5,000 crores next year.
So on 1st April 2026, our unexecuted order book would be INR5,000 crores, and we are expecting around INR3,500 crores of turnover of this -- on this year.
So next year, you'll again start with INR5,000 crore order book, that's what you are saying because if I recollect...
Satyen Mamtora
Yes, that's what I am saying.
Last quarter, you told I think INR8,500 crores by next year order book wise, if I recollect.
Transformers and Rectifiers (India) Limited August 01, 2025
Chanchal Rajora
Look, Ashish, what we -- what MD is trying to tell you is that we are basically now working on the directions where we can have the high-margin order books and high-margin revenues and higher margin orders.
We are targeting that we should have the number of somewhere around INR5,000 or INR5,500 crores plus order book, which will give the high yield revenue instead of going for each and every order, right?
Yes, that's what we are targeting.
Moderator · Conference Operator
Your next question is from the line of Anupam Goswami from SUD Life.
Anupam Goswami
Sir, wanted to understand what is now if you can give us some color on the TAM offers like where -- which transformers level we are at and that capacity what is the TAM growing at?
And export any scenario or any color if you can fetch and after this tariff how difficult or any challenge we will face or not?
Chanchal Rajora
Anupam can you repeat the first part of the question again?
Anupam Goswami
Capacity of transformers we are in, in that, what is -- how is the macro scenario looking at?
How is the market looking at and what kind of growth you are looking and also in the export point?
Chanchal Rajora
The country is planning to expand a lot of capacity, almost doubling the power generation capacity.
So we -- I mean, like any other transformer manufacturer, we are also trying to add the capacity and this scenario is likely to remain there for at least 5 to 7 years.
That is what we also expect.
As regards to your question on exports, we are looking at certain areas for exports.
You know that we won an order from one of the major customer at USD17 million from Botswana.
But we are a little bit choosy because already with the existing order book we have, we have little scope for expanding on exports.
Satyen Mamtora
Our exports remain at 10%.
Anupam Goswami
Sir, any exposure to U.S.?
Satyen Mamtora
Not currently.
Nothing that we have in hand.
Moderator · Conference Operator
The next question then Ankur Goyal from Green Portfolio.
Ankur Goyal
Okay.
So my question is after all expansions are complete, how much revenue and order execution does management expect will come from each plant?
Chanchal Rajora
Ankur, if you remember that we have been in the last 2, 3 quarters, we have been guiding that we are working on a direction of $8 billion revenue -- $1 billion revenue, and this revenue basically includes the expansions that we are doing here.
So as we are targeting for next three year number, so this includes the revenue which is coming from the expansion also.
Ankur Goyal
Okay.
And sir, my second question is regarding receivable days.
As you know that from past quarter, receivable days are improved significantly.
How sustainable is this in the context of raising volumes and new client segments?
Transformers and Rectifiers (India) Limited August 01, 2025
Chanchal Rajora
This is a long -- this is a long-term sustainable figure what we are eyeing and the last 3 quarters, if you see that we are continuously delivering that.
Moderator · Conference Operator
Next question comes from the line of Samarth Khandelwal from ICICI Securities.
Samarth Khandelwal
My question is regarding recently government came out with that they'll be promoting -- coming out with a incentive scheme for producing in India high voltage related transmission equipment.
So do we see any opportunity there?
How do we think about this?
Chanchal Rajora
It is not for the transformers actually, but we are still exploring if anything something is there for us.
But it is not for us.
It is basically the equipment like RIP bushings and others.
Samarth Khandelwal
Okay.
Okay.
Sir, one more question, if I may.
This is with respect to the capacity -- expansion capacity we are undertaking.
Could you outline by when it will come live?
Satyen Mamtora
Sorry, which capacity are we talking about?
Samarth Khandelwal
We are undertaking an expansion of manufacturing.
Satyen Mamtora
Moraiya plant should be operational by end of quarter 2.
Samarth Khandelwal
The 15,000 MVA capacity?
Satyen Mamtora
The expansion yes, yes.
The expansion of Moraiya plant should be operational by end of quarter 2.
Moderator · Conference Operator
The next question comes from the line of Rajesh Vora from Saltoro Investment Advisors.
Chanchal Rajora
Shruti, I have a small request.
Please take the repeat questions at the last once all people who are in line are finished.
Please request participants to one question at one time.
Moderator · Conference Operator
Next question is from the line of Rajesh Vora from Saltoro Investment Advisors.
Rajesh Vora
Congratulations on a great set of regards.
I wanted to understand the competitive scenario.
So on one hand, the incumbents are raising their capacity given the demand.
And on the other hand, there are new players who are also trying who are in low voltage and entering into 400 KV and higher voltage class, so I want to understand how does it move from in a couple of years of time and for new players, particularly, how long does it take for them to certify and start competing with players like us?
If you could take through that kind of positioning ourselves to deal with the competition, that would be great.
Satyen Mamtora
Rajesh, see, currently, our unexecuted order book is INR5,246 crores -- live inquiries which are in finalization stage in the next 2 quarters.
And we are hopeful that we should be ending our year with at least INR5,500 crores order in hand executable for the next year.
New competition is coming, yes.
But at the same time, that competition has to have their PQs met.
As long as the PQs don't meet, which will take at least another 18 months for them to meet PQs.
So I don't see there any change Transformers and Rectifiers (India) Limited August 01, 2025 in the scenario in terms of T&R's orders.
And also there is so much business and demand in the market that even with the new players that are coming in, not much effect is going to be on established manufacturers.
Rajesh Vora
Yes.
So given the demand, how many players can it typically accommodate given the fact that it's a 7-year cycle as you're seeing and with new players also entering, how many players can it accommodate?
Chanchal Rajora
As many as new players are coming, demand is so huge right now not a problem.
Satyen Mamtora
And plus, Rajesh, you also have to understand that when T&R is looking now with all the expansion that we are doing and all the backward integration, we will have a certain advantage over the raw material cost of everything.
When we have that advantage on the raw material cost and also the deliveries of the raw material, definitely, we are going to be at a better advantage than them.
Moderator · Conference Operator
The next question is from the line of Rucheeta from I-WEALTH.
Rucheeta
Congratulations on a good set of numbers.
So my question was more on the gross margin side.
From the last 2 quarters, we've seen a bump up, right, from 30% to 35%.
So what has led to this?
And is this gross margin a new normal for us?
Chanchal Rajora
Rucheeta you can consider that.
Satyen Mamtora
We are on an ongoing process of constantly upgrading our manufacturing facilities.
We are in the process of manufacturing excellence.
So yes, you can consider this as a new norm, but things will change as we become more efficient in terms of manufacturing transformers.
Chanchal Rajora
On a positive side.
Satyen Mamtora
On a positive side, yes.
Rucheeta
Okay.
So as and when CRGO comes, our margin should improve even further?
Chanchal Rajora
Generally, yes, but there are always tailwinds to the business.
Rucheeta
Because if this margin continues then with operational efficiency and all of that...
Chanchal Rajora
Yes.
Operational efficiency improvement is an ongoing process, which we do continuously.
Satyen Mamtora
It is a constant ongoing process.
Moderator · Conference Operator
Our next question is from the line of Priyesh Babariya.
Priyesh Babariya
Sir, just one question on the order inflow side.
We are seeing kind of a 5% decline in terms of order inflow on a year-on-year basis, considering we have secured around INR700 crores of orders.
When we look at, let's say, our peers, specifically into this segment only, they are -- they have shown almost twice order inflow compared to us?
Transformers and Rectifiers (India) Limited August 01, 2025 And also when we -- the second question is when we look at, let's say, when we are targeting INR5,000 crores of order book and largely, we have secured approximately around INR525 crores for the domestic orders.
So we will need approximately around INR4,000 crores of orders.
So have we lost any market share, I mean, in the current quarter, considering peers are showing a very strong growth in terms of order inflow.
So just wanted a color on the same.
Chanchal Rajora
Priyesh, if you have been following us our earning call, in last earning call also MD sir has very categorically said that now we have become pick and choose in terms of the order.
We are choosing the order considering what is the revenue margins we are making as well as what is the delivery time is there.
So we are not going after every order, and we don't want to go that.
So whenever as and when good opportunity comes, we are taking into that.
As far as the INR5,000 crores, INR5,500 crores order book is concerned, please understand I have right now INR18,000 crore plus inquiries and which is every day is building up.
So if I take 20%, 25% of that, also I'm reaching to that numbers also.
And it's again on me that how much number we can take into that.
And please also understand that in this -- the distribution transformers, which our one unit make, we don't have any inquiry of that because that is a cash and carry order book.
So there's nothing like that, that we are losing to anybody.
Yes, we have become more smart in selection of the orders.
Priyesh Babariya
Okay.
Understood.
Sir, can I squeeze one more question, please?
Satyen Mamtora
Yes, tell me.
Priyesh Babariya
So this gross margin expansion that we are seeing for the current quarter, that is first quarter, approximately around 200 bps of expansion.
Is it a function of more of a, let's say, kind of a scenario of pricing power or the raw material cost has been declining?
Just wanted a color on the same.
Chanchal Rajora
It is basically the combination of various factors.
Price increase is also there.
Operational efficiency is also there and the better control on the raw material also there.
This is there.
Priyesh Babariya
Okay.
And incremental order inflows, how has been the pricing scenario as of now?
Chanchal Rajora
In same levels.
Moderator · Conference Operator
The next question is from the line of Bhavya from KRISS PMS.
Bhavya
Congratulations for the good set of numbers.
Sir, how much is the margins in the export orders that we just won?
Chanchal Rajora
Margins are at the same level nowadays, Bhavya.
Bhavya
Okay.
And sir, out of the INR18,000 crores inquiry, how should be the pipeline of exports in the inquiries?
Transformers and Rectifiers (India) Limited August 01, 2025
Satyen Mamtora
The size of the exports would be around 25%, but the orders that we would aim at would be only 10% of the total turnover next year.
Bhavya
Okay.
Understood.
And what geographies...
Satyen Mamtora
More than 10% of exports, Bhavya.
Moderator · Conference Operator
The next question is from the line of Sourav Khara.
Sourav Khara
Sir what gives you the confidence that you will continue the current growth trend?
Chanchal Rajora
Sorry, Sourav, I could not understand what you are trying to tell.
Sourav Khara
What gives you the confidence that we will continue the current growth trend?
Chanchal Rajora
Yes, sir.
We are fully confident in order book and inquiry reflects that also.
Sourav Khara
Sir, what is our current capacity utilization?
Chanchal Rajora
Last year, last year, when we ended up in March, we were at around 65% capacity level.
And this year, we are targeting to reach around 85% to 90% level.
Moderator · Conference Operator
The next question is from the line of Abhijit Singh from Systematix.
Abhijeet Singh
Sir, my question is on the new product introduction that we are planning on.
So in the last few calls, we are talking about the green hydrogen transformer.
And so one is how is that product panning out?
How is the market response for that product?
And how much sales order inflow and order book does it contribute to us?
And apart from the green hydrogen transformer, is there any other new product or a new category that we are planning to enter into?
Satyen Mamtora
See, the green hydrogen transformers are currently at the R&D stage because these are going to be large transformers.
So we are currently under R&D stage and to make them financially viable, that project -- to make them financially viable, such large transformers will still take some time.
But they are currently in R&D stage.
Abhijeet Singh
Sir, any TAM that you can give right now, I understand maybe for the next 1 or 2 years the market may be limited.
But going forward, let's say, because we are also anticipating strong demand for green hydrogen.
So in that context, can this be really big for us in the next 4, 5 years?
Satyen Mamtora
I seriously did not understand your question, can you please repeat your question?
Abhijeet Singh
Sir, my question is, what can the target addressable market for green hydrogen transformers in, let's say, next 4 to 5 years?
Satyen Mamtora
See the financial viability of the project is going to be the governing factor on it.
So we really can't estimate how big the market is going to be.
However, what we are planning and what we have been doing, we could touch around INR500 crores to INR550 crores in terms of hydrogen transformers.
Transformers and Rectifiers (India) Limited August 01, 2025
Abhijeet Singh
Right.
That's helpful.
So last on the export strategy, so if I'm not wrong, we talked about 10% of contribution from exports.
Is that correct?
Satyen Mamtora
Yes.
Abhijeet Singh
Okay.
So we are basically focusing more on the domestic market as of now because of the huge demand that is coming up.
Satyen Mamtora
Yes.
Moderator · Conference Operator
The next question is from the line of Aditya Agarwal from Finavenue.
Aditya Agarwal
Sir, I just wanted to ask that is there any slowdown in inquiries under negotiation?
Like in the Q4, we had an inquiry under negotiation of somewhere around INR22,000 crores, whereas it is somewhere around INR18,000 crores right now and also on the order...
Satyen Mamtora
It is 18,000 MVA -- INR18,000 crores, sorry, yes.
Aditya Agarwal
Yes INR18,000 crores.
And on the order inflow side, in the Q4, we had an order inflow of roughly around INR2,200 crores.
And over -- in the Q1, it is INR665 crores.
So is there any slowdown in the order inflow side that we are hinting in the overall space?
Or is it just the seasonal factor?
Chanchal Rajora
No, this is not a slowdown.
These are long drawn projects with a large gestation period.
So it is not that it will go on a uniform basis.
So some pluses and minus it can happen.
18,000 itself is a large number.
So I mean, beyond that, beyond 10,000 numbers, it is such a large number that some fluctuation can happen.
So this is no indication of slowdown.
Satyen Mamtora
And historically, if you see in quarter 1 and quarter 2, the order book is normally slow.
And once quarter 3 comes, order book starts picking up.
Aditya Agarwal
Okay.
Okay.
And sir, any plans for moving to HVDC, like in the previous con call, we said for that we are looking for 1,200 kVA side, so is there any progress?
Satyen Mamtora
Yes.
Still exploring, nothing concrete as of now.
Whenever we will have something concrete, we shall let you know.
Moderator · Conference Operator
The next question is from the line of Amit, an individual investor.
Amit
My question is like in our INR3,500 crores of revenue this year, how much will be coming from U.S.A.?
And we have a vision of $1 billion of revenue by FY '28, whether the tariff imposed by Donald Trump can affect our vision of FY '28?
Satyen Mamtora
We currently have no inquiries from U.S., and we are very wary of getting any inquiries from U.S. or -- so there is nothing that can harm us either way.
Chanchal Rajora
Amit, also just for your information, this transformer comes under the strategic list of everywhere in the world.
So nothing is going to affect.
Transformers and Rectifiers (India) Limited August 01, 2025
Moderator · Conference Operator
Thank you.
Due to time constraints, that was the last question.
I now hand the conference over to the management for the closing comments.
Over to you, sir.
Satyen Mamtora
I would sincerely like to thank each and every one of you for taking time to join us today for your continued trust in our journey.
We hope we have addressed most of your queries, and we look forward to many more meaningful interactions with you in the future.
Thank you.
Moderator · Conference Operator
Thank you.
On behalf of Antique Stockbroking, that concludes this conference.
Thank you for joining us, and you may now disconnect your lines.