TD Power Systems

Highlights of Q1 FY19 results

  • Standalone
    o Revenue grew by 24 % to 76.54 Cr compare to 61.7 Cr last year same quarter
    o PAT stood at 5.23 Cr compare to loss of 19.17 Cr last year same quarter
    o Manufacturing revenue stands at 61.9 Cr compare to 43.9 Cr last year same quarter
    o Exports and deem exports contributed 68 % of manufacturing revenues
    o Manufacturing order book stands at 1019 Cr in which exports and deem exports excluding the large delivery order of 59 %.
    o Order grew by 42 % to 106 Cr compare to 76.8 Cr last year same quarter
    o Order inflow from direct and deem exports grew by 15 % to 54.8 Cr compare to 47.6 Cr.
    o Project business revenue 6.78 Cr compare to 11 Cr last year same quarter
    o Order from the project business stands at 39 Cr
  • Consolidated Basis
    o Total Income 75 Cr compare to 61 Cr last year same quarter
    o PAT stood at (-7.9) Cr compare to (-21)Cr same quarter last year
    o Order book stands at 1057 Cr , breakup is as follow manufacturing is total 1019 Cr , large delivery order is 759 Cr, other manufacturing order stood at 269Cr out of which 59 % is exports , Project business is 38 Cr
    o Company was able to maintain a strong cash position of 178 Cr.
    Market Outlook and Guidance
  • Order inflow increase compare to QOQ basis . Pipeline of Q2 and Q3 is strong and this ensures company will deliver the projected results in FY19. See strong order inflow from steam turbine customers for the domestic market and order inflow in the export market are also growing on YOY basis
  • Hydro will be weak in this year in terms of sales but confirmed order Inflow has picked up and it is back to the trend line of sales in this segment for the next year . Orders have been received in the Hydro segment from South America , USA and Norway, there is a strong enquiry pipeline.
  • In wind company will deliver 100 MW generators this year and customer have order for another 500 MW generators and yet to see the firm execution plan for the 500 MW but company expect that 150 MW project will be executed on confirm basis.
  • Order and delivery in the railway business is proceeding as per the plan and requirement of delivering is 50 Cr worth machines till the next financial year.
  • Get 26 MW order in Turkish subsidiary for a Geothermal generator of the highest level of complexity and company become first to produce such complex machine in Turkey. Order book for Turkey stood at 1.4 Mn USD.
  • Company will at least book 2 orders in the 2 segments before the end of Q3 and both these machines will go for delivery next year.
  • Overall company see a much stronger domestic market and orde inflow in the domestic segment and receiving much deeper penetration in the export market where company is getting orders at the most precious level.
  • Company expect 405-415 Cr topline in manufacturing business within EBITDA margin of 7-8 %. Company will give profitable operating results because of initiative cost reduction and operating expenses .
  • Replace rupee loan with FPNR loan and this will help in decreasing interest cost very significantly this year compare to last year
  • Expect manufacturing revenue to be 180 Cr in H1 and 230 Cr in H2 due to lumpy delivery schedule of delivery of generators.
  • Expect topline of around 150 Cr including subsidiary
  • How is the US market shaping for the company ?
    o Company get some good order from US and expect to get reorder from subsidiary to deliver 4-5 Million dollars of business . The US market is little subdued for large markets but company have one big hydro order and also negotiating a large Gas turbine order. Business will come more from Europe because steam turbine business are getting shutdown in US .
  • Any chance of getting GE transportation back ?
    o No it has been sold out and company had already moved into machinery in line for the attraction in motors or railway project for India and company was not able to deliver machines for the GE and that decision was the right decision of the company.
  • Did company has added any new client in any segment ?
    o Yes in engine segment where company got trail order from engine company called Rolls Royce based in Norway they are the third largest engine maker in Europe. Company have a trial order for 2 machines and company will deliver it in December and if it pass then company will receive large order from this company in next year.
  • Any new or retain customer in Gas Line business ?
    o A customer from US that is a type of caterpillar organization where company had a trail order for 17 megawatt generator and company was able to deliver the machine in October this year it will reach US by December and then trials will start and they buy 60-70 machines in a year.
  • How will the order book related to exports will sustain as it is decreasing yoy ?
    o Last year company has large number of Hydro projects and at that time company was having more than 100 Cr business than today so this year the hydro sales is low and it is pitching up so from next quarter order book will increase so this year company will see more short cycle orders out of steam turbine business and Gas turbine business which are short Cycle . This the nature of the business where one sectors goes up and other goes down and waiting for the day for all sectors to fire.
  • How the climate work going forward in passing the price increase to the customers ?
    o The operational profit for the company last year was negative 15-16 Cr and this year company want to be operational profit positive so this movement from negative 15-16 Cr is because of two three movements.
     Pricing in term of company and realization in terms of Euro has gone up on exchange rate and company has secured much large orders for the next seven months up to march at around 80 Rs per Euro compare to last year average which was 74.5 so company is going to see better margins to about 6-7 % coming out of the Euro as well as US.
     Company will be able to get marginal price increases in domestic market not big but yet reversing the trend which yet steadily going downward from the last four years which has also dramatically affected company profitability so with increase in capacity utilization company would be able to get something from the domestic market.
     Very large effort by the company to reduce loss and that will be affected from H1 numbers in two or three quarters company would see reduction of cost showing up more strongly. This is how company is going to deliver profit going forward.
  • Is there anything which will impact business going forward ?
    o No there is nothing that is going to disturb company in coming 3-5 years.
  • Any new opportunity in railways in terms of metro for company ?
    o Yes the customer with whom company is working for railway is having a order for metro . In India they won the Bombay metro so company will see the business coming for the company. It will take time but the whole intention for the company was to tie up with the customer so that company will get other business also from them.
  • Kindly give outlook on steam for domestic and export market and in which sector company see revival?
    o In domestic company see revival across all sectors in steel , sugar , chemicals , fertilizers , waste energy also, captive power plant business and every company which are doing brown field or green field expansion have to put captive power plant because commercial power in the country is expensive for a power consuming industry like Cement and steel. Captive power plant is still more cheaper than electricity so that realization has come into industry and there is no looking back for the next few years on this so there is a strong demand and as CAPEX revival take place company will see larger demand in terms of megawatt it back to 1000 MW from about 700 MW last year. So there is 40-50 % improvement in demand in domestic side compare to last year.
    o On export side company get very good order from European market specially western Europe from mainly Garbage plants they got 20-30-43-50-55 MW orders . Company is really working with the top level of the business with best EPC contractors and first few machines are going out for delivery in next month and company have strong enquiry pipeline for next year also. Company have reach the top of the business in the Europe right now and value wise company would be at 15 % market share in Europe
  • In Hydro how much is in domestic market and how much in export ?
    o 90 % export and in domestic it base on government which is going very slow
  • How there was a reduction in working capital , rise in inventory and reduction in debtors ?
    o Because company had very huge collection in last month of Q1 and inventory is high because company expect higher billing in next quarter , debtor has come down because collections were good
  • How long will be the losses in EPC business will continue ?
    o This loss is just because of transportation that company has done as company have to pay vendors in dollars and the currency movement from march to June was from 64 to 68 Rs so that amount was equal to 1.2 Cr
  • What is the company market share in domestic as well as export ?
    o Very High in Steam Turbine it must be 85 % in domestic market , Internationally there is a low market share making good progress in Europe but overall it is still single digit.
  • Is there any change in the competitive intensity in the past six month ?
    o Yes there are people who are now out of the game , company is seeing large restructuring in companies and larger manufacturers are now shutting down the factory and now the game has become for second tier company and company is in the second tier but company is the only one who have manufacturing unit in the low cost country and has delivery high quality machines in the market. So from positioning point of view company is taking larger position for the future.
  • What about railway business orders ?
    o Company will do 60 Cr from railway business in next year and then 100 Cr but this year no and if this business remains same then it will reach to 500 Cr and EBITDA margins will go to 12-14 %.
  • Does company have price pass on clause for the railway contract ?
    o Yes any increase in raw material prices then company can pass on . It kicks in after the second year
  • Any other segment which can kick off revenue for the company going forward ?
    o It could be Gas turbine less than 50 MW will be refineries and that is the segment where customers buy together and BHEL has lock on it.
  • How much growth can been seen in steam turbine business in next 3-4 years ?
    o At least 40-50 % and there will be only 2-3 players in the market going forward and company want to be one of them. Advantage for the company is company is only the one who have low cost high quality production house and market it very tight relating to pricing and company pricing is unbeatable .
  • Did India and Europe makes 70 % of company business on geographic basis ?
    o Yes
  • What is the current capacity utilization of the company ?
    o 700 Cr plus so it could be 57 % to 60 % capacity utilization .
  • What would be the CAPEX for the year ?
    o This year company have put it into railway but next year there will be a maintenance CAPEX of about 8-10 Cr.
  • Did company has gain in Europe because of order coming or increase of market share ?
    o Company is well positioned in Europe and answering a lot of inquiries across the entire market so acceptance level is very high right now. Company have to win the order against competition . Potential to do better in next year is there. There is a potential to increase the market share next year.
  • On project side is there any opportunity to get more projects as company is very low on it ?
    o It is not a focus business for company as long as it makes money for company will do it and company don’t see a long term future for the company in this business. Company may exit it in next 2 years from now .
  • Did all the money related to EPC comes to company ?
    o Yes company don’t have any receivable and no payable
  • Did cost reduction initiative will be on material side or all the side ?
    o All the side.

Board will decide on buy back on 26th Sept.

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Board approves buy back at price not exceeding R’s. 256.00 a551ed13-33cb-4678-8432-76487d90f74c.pdf (137.0 KB)


Notes from TDPS AGM to shareholders queries. There may be mistakes while noting the ponts discussed. Request other VP members present at AGM to correct/add points.

Operating profit: We will deliver operating profit at PBT level in fy19.(revenue of ?470 cr.) We have taken huge cost reduction exercise which have yielded results will be reflected in H1 results. Once revenue reaches 500 Cr, EBITDA margins will be 12-14%.

Gross margins: Was all time low last year due to currency hit and increase in raw material cost.These two factors are favourable to the company in FY19. Current exchange is quite favourable to company. Raw materials have stabilised. We have taken steps to hedge raw material cost for FY19.

Working capital: presently around 140 days. As we export more,better payment terms have been offered to customers. It may come down by 15 days but will not reach earlier level of 75 days.

Order inflow: will be published with H1 results. It will show significant improvement in order for present and next Fy.This quarter order book is good.Pipeline for next year is also excellent.

500 cr of revenue looks achievable(?fy19…not sure) based on current order book.

Loan restructuring by FCNR has been completed. current cost of interest is around 2% against 11% earlier.

Domestic business: Domestic business has gained significant momentum. Outlook for next year is also much much better than what was witnessed in last few years.Good orders/ enquiries from domestic segments like cement/steel/sugar/ethanol companies for captive power plant. Investment cycle in capex goods has turned around. If political stability remains we should see record investment in the country.

Our customers having better capacity utilisation with better demand. Prices also firming up.Prices have bottomed out last year. _Price trend is witnessing improvement and trend seems to be sustainable in short term. After long time we are able to get price increase for domestic orders(2-_7%).

In Spite of high market share(75%) it’s not easy to get price increase as the competition (BHEL) may take market away from us.Presently we can’t afford to loose our topline/market share for taking price increase.

European market steam turbine business: We have taken very good orders for this year.orders are under execution. First machine has been delivered last week. Customer is quite satisfied with our machine.Indication is that we are going to get increase no of orders from same group of customers for next year business. US doesn’t have steam turbine manufacturer.European customer will supply everywhere.

Indian steam turbine business : 110 cr this year.

30 to 50 MW we have 15% market share. Overall steam turbine business in Europe we have 5% market share.Lot of scope to improve our business.

Hydro business: nothing much happening but we have good order pipeline for next year.

Business with Alstom: TDPS has excellent relationship with them.All future projects by Alstom in India and around the world, TDPS will get part of their business. We are the motor supplier to their business and we have to deliver. They are very aggressive in the market with indian railway and other countries as well. Govt plan of railway electrification provided opportunity for Alstom which should help us.

Waste to energy plants: increasing in India. Municipalities are putting up their plants. It’s going to be huge business for TDPS.

Two pole factory : total investment was 120 cr. 50% have been depreciated. Presently the utilisation is very low. Manufacturing just 1 or 2 machine in a year against capacity of 10 machines/yr.This segment does not seem to revive in near/medium term.

Competition: There are enough no of competitors running empty factories in Europe.we have to fight with them. With present exchange rate its difficult for them to beat us.Domestically we face competition from BHEL and…

ROE: target to reach 20% .it will take few years.

Project business: remains at 40 to 50Cr. It may reduce further.
Discl: invested.



Highlights Of Q2 FY19 and H1 FY19 Results


  • Standalone H1 Results
    • Revenue stood at 175 Cr compare to 198 Cr last year H1.
    • Loss after tax and comprehensive income stood at 3.25 Cr compareto loss of 12.53 Cr last year H1.
    • There was significant cost reduction in the area of operating expenses and improvement of the gross contribution is the main reason for this big change. Full impact in the exchange rate has not impacted the company gross contribution yet. There will be further margin improvement in Q3 and a larger impact from Q4 onwards. Increase in raw material prices could impact to some extent dampened the full impact of exchange gains.
    • Order Inflow was 238 Cr compare to 168 Cr last year H1 increase by 42 %. In particular order inflow from direct and deemed exports is 154 Cr compare to 102 Cr last year an increase of 51 %. There will be a strong revival in the domestic order inflow in Q3 and Q4 and this will positively impact company order inflow for the whole year. Exports and deemed exports order pipeline also continue to be very strong. At this moment company is looking at all time high order booking this financial year and this will drive the performance of the company in FY20.
  • Consolidated H1 Results
    • Revenue stood at 106 Cr compare to 195 Cr last year H1
    • Loss after tax and comprehensive income is 9.25 Cr compare to loss of 16.21 Cr.
    • Order book stands at 1086 Cr out which manufacturing is 1042 Cr and project business is 44 Cr.
    • Exports and deemed exports order is 192 Cr, domestic order is 73 Cr and railways order is 753 Cr.
    • Continue to maintain a strong cash position of 185 Cr.


  • Continue to hold manufacturing guidance of 405 Cr to 415 Cr with EBITDA margin ranging between 8-9 % as indicated in the previous call and 50 Cr for company project business including subsidiary .
  • All subsidiary including recently form TD power Turkeyare at break even or making small profits compare to DHPS which will show exchange losses due to restate of invested amount because of foreign lenders as a end of each reporting period.


On exports and deemed exports where company see some attraction on the order book in that which are the segments where company is seeing growth ? Which are the segments seeing highest order booking from where growth is coming and will it be domestic focus or exports coming ?

  • In past few years there were good orders from exports but the domestic market was shrinking YOY so company was not able to show overall growth so increase in exports was just compensating the domestic side . But now there is great increase in exports side mainly driven by Hydro in the first half and steam turbine business exports and this kind of trend is going to continue into H2 also . So increasing penetration of company product in all overworld is yielding results in term of increase market share and increase order book inflow. There will be change in the domestic order inflow so company have strong indications and strong order inflow in Q3 and Q4 mainly in the steam turbine business side. This is mainly driven by captive power plants for the domestic industry where company is seeing some minor CAPEX revival basically some in cement , some in steel , waste energy plant and to small extent in sugar co-chain.
  • How much is the YOY contract and tenders are with company already in the market compare to last year quantum of tenders and right now quantum ?
    • On an average order inflow will be 25 % more than last year.
  • In steam turbine is it waste heater or is it new small power plants which are coming up and the geographies where it is coming up momentum on the export side ?
    • On export side basically Hydro is across the world so there is no specific market. Norway is big market in addition to large machines from rest of the world and steam turbine business is mainly Waste to energy and to some extent there is also paper and biomass. All the orders are for insulation in countries like Germany , France and Spain.
  • Company have two manufacturing facilities as of now so how confident are company that company will be able to use both the facilities at decent capacity utilization so can company complete the order from one facility and shutdown the other just on operational front now because of cost reduction and what are the cost reduction measures that are further possible and how much company have reached ? What is the fixed cost on which company is running on ?
    • Company will not be able to significantly reduce the cost more than company had already done on the operational side. Company don’t see further reduction taking place . There can be further improvement on the gross contribution level. Now mainly the future will be coming out of exchange rates benefits which are for company in a much positive territory compare to last year. Company have to see the prices of raw material prices which are steel which is now in the upward movement. So the full impact has not been known but overall the net effect is that will be a positive gain for the company because the realization that company get from the market is because of foreign exchange rates will more compensate from whatever company have from raw material price increases. So that will straight away increase the margins keeping the cost under control.
  • Is there is some reduction in the competition intensity in the business or it remain the same as players are still remain same in the market because they had reduce their capacity or shut down so what is company thought on it ?
    • There is no capacity coming off the market but company have become stronger and company is doing much better than earlier.
  • From increasing volumes did company will reach to peak margins with supply getting shrink in international market like company can scale up their revenue to 500-600 Cr so is that a possibility or company is in a lower margin environment because of the competitive intensity and external factors ?
    • In FY20-21 company have 50 Cr firm volume from the railway business that will kick in next year and 100 Cr which is expected from FY21 so that is going to be at top of whatever company is doing right now. So this year other business like manufacturing grows and very good growth is expected to coming going forward . So 500-550 is possible because of on the back of business increase from the railway and margins profiles are gross contributions should be expected to remain stable. Company is not expecting it to becoming worst , it can only become better. 31-33 % will be the EBITDA margin range of worst case situation.
  • On the locomotive side how do company see the opportunity panning out and how large this segment can become ?
    • Company is bidding with partner and won some bids . Company expect this segment to keep growing so the size of opportunity will increase as company get information that its partner who was going to make 1000 locomotive will be manufacturing much higher quantity and government want to make more electric locomotive and reduce diesel. All discussions are going to increase quantity plus additional business so the 100 Cr which company is expecting in FY20 can go to 125 to 130 Cr.
  • Did the gross margin do not rise because of rise in raw material prices and depreciation of rupees ?
    • Full impact is still not come . Company was at 25 % last year H1 and this year it is something like 29.5 %. So company have already seen a 4.5 % improvement in gross margin. That comes partly through cost reduction exercises and partly through the exchange gains . Full impact will start coming in from Q4 onwards because company have also hedge Euro earlier this year and rate is not good now so the unhedge portion will get hedge at the new rates. So company will see the better realization coming from better exchange rates in next few quarters.
  • How is the competitive intensity now playing out ?
    • Competitive intensity is still very high but company is very strong and company is offering a very good price performance to customer and that is giving increase in market share
  • Any update on the two customers that company had acquire on the gas side ?
    • It will take time and it is progressing but it will take time. Company is definitely progressing step by step.
  • Will there be any other cost to look on lower than EBITDA ?
    • Yes it will be incremental but it will not be proportional. When revenue will increase by 25 % the cost will also increase by 25 % so that’s not company is expect to happenbut cost pressures are always there is expectation of company employee and company have to meet the expectation so there would be incremental cost YOY based from the current level.
  • Is there was loss on EPC side ?
    • Yes basically company have 21 Cr of payables in US $ and every quarter company have to reinstate the mark to market payables and company have to take 10 % mark to market hit on that while this is dispute payable and company don’t have to pay it got into us within next few quarters.
  • In the notes there is some provision that company has recorded about 14 Cr so some repair in Indian subsidiary so is it something which is new ?
    • It is there since last one year
  • What is the outlook on gas engine business ?
    • Company is doing than expected this year on the gas business engine business mainly because company big customer will have change of ownershipbut the forecast for next year is very good and company products are doing very well. There will be growth compare to this year but compare to previous year it might be flat in terms of what company expects in next year but still it is positive situation and healthy business for company an company is not worried about it. But they lost the large orders because end users were not known who will be the owner to be so they don’t want to take the risk to place the order with company gas engineer partner.
  • Can 500 Cr revenue can be expected in next 1 year from manufacturing ?
    • It is possible in next 2 years.
  • Does waste to energy is only a vision or is it happening in Indian market ?
    • It is actually happening the order are being placed and money is being made.
  • On buy back will company will go with amount of buy back or number of share for buyback ?
    • Company will distinguish on basis of quantity.
  • How do company see the situation currently and going forward in terms of pricing power ?
    • Pricing power in the sense that there will be big increase in the raw material prices so company have to get something from the market to compensate that but company don’t see further any major shifts to pricing. Now it is going to be a cost control game.
  • Does the EBITDA margin guidance of 8.5 to 9 % include other income ?
    • Yes it include some portion of other income related to manufacturing only
  • Does other income is from cash and cash equivalent only ?
    • No there will be some foreign exchange gain , other service related all those will be captured.
  • Does the increase in inventory is for the order only or company see the price increase in raw material so company is building inventory of raw material ?
    • Both
  • In the tractor motors is this is only to India or company is also eligible for global supply ?
    • Global and company don’t want to run too fast in this games . Company need to establish that company can really do a good job that company can provide these machines at the highest quality required. One the demonstration id done all business opportunities are available so company have to do step by step and make sure to make machines as good as others are making in the market. Than all opportunities are open. Currently they manufacture it In-house 100 %.
  • Does the domestic scenario will continue for next 18 months ?
    • There is strong order inflow and company customers are also seeing it and they have a very very positive order book right now . Indications are that there is good momentum in the Industry and momentum will continue for next few quarters. Longer term continuation will depend on the political situation next year by having a stable government.
  • Does company see attraction in captive power plant ?
    • Yes there is a demand increase by 5-6 % but there is no elasticity in demand . India is a power shortage country that’s why captive power plants so anybody using high amount of power will have to go for captive and liability issues are also there.
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  1. Significant cost reduction on the operational basis this should continue in Q4 and in the next FY as well.

  2. FY 20 is going to be the best year for TDPS in the history driven by strong order inflow in the domestic business

  3. Management guidance for FY19 is maintained- 400-410 Crores, EBITDA - 8-9% , Small operating income profit other than other income which is going to be around 7-8 Crores for this FY19

  4. Spent 18 Crores in the buy-back, maximum limit is 30 Crores. The intention is to utilize the entire amount. The deadline to utilize this amount is April 2019

  5. W.r.t to the railway order - INR 40 Crores in FY20 and then 100 Crores subsequently . Working with the same client on other projects for India and abroad. Expect to pick some projects but nothing as of now

  6. Pricing pressure has reduced in the domestic market. Overall, the company’s positioning in the export markets has become extremely strong.

  7. Total cost of the business is going to be 122 Crores - including depreciation etc. Gross Margins currently are 29-30%. This should improve going forward. Costs may not grow 3-4% . Also expect gross margins to improve. Commodity prices have been benign so far and so have been forex

  8. Next year revenues wil be 475-500 Crores including the 40 Crores for railway; There will be an even flow of revenues in the four quarters - indicative revenues - Q1 ~ 105 Crores, Q2 to be higher than Q1, Q3 may be tepid and Q4 to be the highest

  9. Steam turbines is doing well in the exports market - have delivered 4 engines - engines capacity ~ 45-55 MW

  10. 15 Lac shares bought back till yesterday, utilized to ~ 18 Crores so far. The maximum permissible limit is ~30 Crores. Intention is to utilize the amount.

  11. Added a big client- Caterpillar in Germany - second big engine client. Also looking to add 2 more clients

  12. Order inflow seems good and should sustain in Q4 and FY20 and FY21. Also optimistic about getting traction new orders

Discl : Invested in TD Power Systems

I am a SEBI Registered Investment Advisor (INA100008832) and it is fair to assume that I and my clients have a position in the stock and thus my views maybe biased. This is not an investment advise to buy/sell the stock, please consult your investment advisor/do your own research before buying/selling a stock.
These are my notes, and there maybe errors in my interpretation or noting down the management’s comments. Please use your own judgment


TD Power Ltd

Key Highlights Of Q3FY19 and Nine Month FY19 Results


  • Nine Month
    • Revenue stood at 267 Cr compare to 292 Cr last year nine month period
    • EBITDA stood at 8.4 Cr compare to 9.3 Cr last year nine month period
    • Gross Margins stood at 3.14 % compare to 3.20 % last year nine month period
    • PAT stood at -12.1 Cr compare to -18.4 Cr last year nine month period

Key Highlights

  • Order Inflow
    • Nine month order inflow grew by 39 % to 363 Cr compare to 261 Cr last year nine month period.
    • Particular order inflow from direct deemed export grew by 49 % to 244 Cr compare to 164 Cr last year nine month period.
    • Domestic order inflow stood at 219 Cr compare to 97 Cr last year nine month period.
    • Order book stands at 1019 Cr which includes manufacturing of 1071 Cr out of which generator is 317 Cr and 753 Cr is from railways business
    • Project business pending order is 48 Cr.
    • Company added Caterpillar as new customer from German for supply of Engines
  • Outlook
    • Continue to hold manufacturing revenue guidance to 400-410 Cr with EBITDA margin ranging between 8 % and 9 % as indicated in previous earning call and more operational profit other than other income.
    • Other income is expected to be in range of 7-8 Cr of FY19.
    • Project business topline is expected at 50 Cr including Japan subsidiary
    • All subsidiaries are expected to give break-even or small profit except TDPS and TDPS Japan WOS will have a small loss. TDPS will show exchange losses only due to re-statement of amount payable to foreign vendors at the end of each reporting period and TDPS Japan will show loss due to restructure cost of downsizing.
    • Next year railway business will be 20 % of company revenue

Employee benefits expense for the standalone co has increased from INR 37 cr FY11 to INR 65 cr FY18 while the revenues have shrunk from INR 467 cr to INR 418 cr in the same period. Moreover, approximately 12 cr was the payout to three wholetime directors In FY 11. In FY18, there is only payout to one wholetime director of INR 3 cr since the other two have retired. So, employee benefits expense excluding directors has increased from INR 25 cr in FY11 to INR 62 cr in FY18.

In the FY11 to FY 18 period, the number of employees has declined from 748 to 602 so this increase doesn’t seem to be attributable to an increase in head count.

What could be the expanation for this disproportionate increase?


Reviving this thread .
Company seems to have turned around as the same can be seen in march’19 results.
My gut feeling says that there is bright 3-5 years ahead for TDPS in the areas in which it operates.
Anyone with any more information/analysis please do post

I had attended TD Power concall. Some of the key points of the call are:
• Significant reduction in loss compared to last year. Our manufacturing order book stands at 1030 crore.
• Order inflow 474 crore vs 389 crore last year, increase in 21%. Order inflow – export - 295 crore, increase of 23%.
• Market situation – keen continuation of strong order inflow. Fy20 – best year for TDPS in terms of growth. Domestic revival is getting started – steel and cement. Captive power plant business in India. Waste to energy projects. Ethanol power plants doing well.
• Hydro – Norway, long term turbine market.
• Increase in traction engine business – market share increased by partner.
• Added new engine customer this year. Add two new engine this year.
• Railway business – on track – 45 crore of delivery this year. Next year is expected to be 100 crore on track.
• Generator – geothermal – 6 MW, 4 MW – 24 MW geothermal plant to be delivered this quarter – 2.5 Million Euro this year next to next year will be 3 times the sale.
• Project doing well
• Guidance for FY19 – manufacturing business – 475 – 500 crore topline, EBITDA – 11 – 12%. Project business 31 crore.
• Order book 280 crore plus 45 – 325 crore opening order book – booking will be around 150 - 200 crore going forward.
• Alstom – lost the order.
• Gas Engine – Caterpillar and Rolls Royce – all the engine makers delivering 5 engines this year. Engine – 2 new engine customer added – H2 will see traction this year from them.
• Manufacturing capacity is 700 crore including Alstom business. We could easily push capacity to 800 crore with small capex. Right now pushing sales this year, keeping cost under control and improving margins and getting more orders for FY21 is our focus right now.
• Revival in the market – Supportive role on pricing, margins will depend on capacity utilisation and internal efficiencies. Put lot of emphasis on pricing right now.
• Domestic – cyclical, export – stable. However, export order book has not moved much. We haven’t moved much on order book on exports per se. Largely driven by the fact that last 3 – 4 years has been extremely brutal in the market. Recently we saw competitors closing capacity. We are well placed in line to do well next year. Last year we had tremendous drop in hydro. If it had remained 80% of FY18, we could have still reached 450 crore in manufacturing business. Still a tough competitive situation in the market.
• Export – capex revival in export market. Demand increasing in the market? Difficult for supply to come back? Supply wont come back. Its shut permanently. More and more we are becoming a major supplier in most of the project. Still some of the capacity will taken off the market. Small players will go up. We have a larger addressable market.
• Domestic perspective – gas and hydro projects picking up? Domestic hydro is zero. No engine business in India. Other than large captive power plant, no business for us in India from other segments.
• We just turned the cycle right now. We should do better.
• Hydro – all time high segment next year. Growth projection is conservative this year. Our projections are definitely conservative. Any risk of decline in FY21 given high base? Coming back to where it was in steam. Atleast next year, it will grow on steam side.
• Geothermal – was there in Turkish subsidiary. Another geothermal order this quarter. Very good order enquiries in it. It will do well. Very good margins there also.
• Order inflow – 275 crore in FY19. How do you see that in FY20? We are seeing strong growth in domestic side and increased penetration in export side. Have to take it to 500 crore in FY20. We will do more booking on engine business. We should hit 600 crore revenue in FY21 itself.
• 140 crore of generator business this quarter. Q4 has been the largest quarter for us every year. Q1 has always been a terrible quarter and Q4 been the best. It will be the same this year also.
• Euro subsidiary made profit, US subsidiary had a small loss – interest cost on debt taken from parent, Japan operation made losses – higher – manly due to payable in yen leading to loss due to depreciation against dollar. Resize Japan and Project business going forward. Some small loss will come in FY20 also.
• Subsidiary – 20 crore of payables – accounted for. LD and short supply there. Next year, there shouldn’t be a difference in standalone and consolidated nos.
• Guidance – conservative given outlook we have. Risks we have currently? Risk for delivering less than what we thought. Prefer to be conservative and than increase in during the year.
• Engine business – moving up the value chain – more complex or higher wattage. Means higher margins for them? Projects that we executed last year were cream of the market. People are happy with the product and now we have to grow it. We have to keep fighting for it. We have taken away big market share. Lets see how they fight back now.
• Cash – 130 crore even after buy back. Any plan of doing further buy back? We will give clarification during the year. Lets have the conservation two quarters down the line.
• Alstom faced some issue during the trials? Alstom the final delivery of the engine have happened.
• Hydro – Strong opening order book in hydro and still some orders that we will receive during the year. Very strong hold on cost side. Last couple of quarters, there is not much scope for improvement in it. Lot of work done to reduce the cost and increase the productivity of people. Strict control on outflows. Marginal increase in employee related expenses.
• Gross margins – 30.4% full year – lower end of the guidance. Reasons for it? Better than previous year. Moving towards 31 – 32% this year. Better pricing, better cost control and good hedging for Euro that we have done this year.
• Orders from steel and cement plant for domestic market. Last quarter we got orders from cement and stell and this trend will continue. Government will make big spending in infrastructure. It will be a big change for India. Capex cycle has definitely turned now. Rate of increase is what we have to see. Its definitely on the way up.
• Operating margins to improve if we increase sales to 600 – 700 crore? Yes. It will happen.
• Investments on balance sheet of 10 crore – purchased NCDs of Tata Capital. Interest rate on that – 9.6%.
• CWIP increased from 6 million to 15 million – some automation capex
• Wont disclose on volume
• Receivables on year end have been higher due to higher sales in Q4. So it declines during the year. Some of our large partners get credit period of 120 days.
• Operating cash flows been negative – how do you think it will be going forward? Making efforts to reduce inventory. Project being delayed for some time. Nature of the business – have to be flexible with the customers. Will face external uncertainties for WIP inventory.
• Write off of debtors? No. Havent written off.
• Gross margins – sourcing of raw material. How do you see gross margins looking like in 3 – 4 given iron ore or steel prices moving up? Hard question to answer. If there is a big increase in prices of RM, we will increase the prices. Atleast want to keep the gross margins to 31 – 32%. We got price increases in FY19 from market. Don’t want to get bothered with RM price increases? Eventually prices will increase with lag. Have lot of steel in inventory and that will last this year atleast. We need to protect the margins and survive in the business.
• From balance sheet point of view, we are cash rich. Do you see credit period improving with cycle improving? When cycle improves, we have certain agreements for mid to large terms supply agreement. It takes time to renegotiate the credit period. If there is demand increasing, credit period will reduce but have to go back to customers when cycle turns negatively.
• Short cycle orders have better working capital cycle.
• Gross margins – better pricing happening now? Pricing full impact will happen in this year the increases we took last year.
• Mix going forward – higher complex product, will it improve in 2 – 3 years from now? Difficult to say that. Cant look at 2 – 3 years.
• Higher rated generators are better in margins. Constantly pushing for higher margins and higher pricing. We try to get those nos. Still a brutal market. Cant increase to such an extent that we become as expensive as European player. Don’t want customers to go to European brand. Its order by order and contract by contract, we have to ensure that we win orders and maintain margins. Takes more time and almost same costs for contract manufacturing. Immediately start production from contract manufacturing. 30 application pending before us for job work manufacturing. Quality issues with contract manufacturing? We only go to players which have good facility. Standard procedure for contract manufacturing. Its like our own manufacturing. We don’t just own the facility but its like our own facility.
• Last year steam did well for us in exports and domestic markets both. Don’t have the break up of it off hand now. Steam will grow this year also despite high base
• Hydro declined last year but this year we should see best ever revenue from the segment. Gas is also expected to grow with our customer expected to grow by 15 – 20% this year.
• Given steam will grow this year, hydro to have best ever revenue contribution and gas to grow as well along with 45 crore revenue from traction motors, do we think that our revenue guidance of 475 – 500 crore is conservative for manufacturing side? Yes. I think so. Logically, we should grow at much higher pace than this. We will revise our guidance as the year progresses but are conservative now.
(Disclosure: Invested)


I had attended the Q1FY20 concall of TD Power. Some of the points noted during the concall:
• 283 crore of order book of manufacturing business.
• Order inflow 112.3 crore this quarter vs 106 crore in Q1FY19
• Order book for project business is 39 crore.
• Market condition – domestic order inflow is down by 23% - 40 crore this quarter vs 52 crore of last quarter. Exports and deemed exports is up 53%. Absolute number for Q2 will be lower than last year due to lower domestic market. Expect government to improve the markets. Not concerned about process at TDPS this year and next year as we have very strong presence in exports. Not concerned currently. Railways will also provide good growth.
• Orders for TDPS Turkey
• Guidance for FY20 – outlook for FY20 is firm with 475 – 500 crore of revenue. Expenses will go up by 5 crore. Book and build target will also be met. Project business topline is 31 crore.
• Book and bill guidance of 175 – 200 crore for the year and opening order book of 300 crore. A part of the order book is for next year as well. 40 – 50 crore order is for next year for carried forward order book.
• What has changed in domestic order inflow? Slowing down in order inflow in domestic side. Business for next year might be affected. Don’t want to be too early. Things could change. Lot of business in the pipeline which will fructify. Delay in finalization of orders in domestic market. Not getting worried at this point of time. Waste to energy opportunity coming up – steady improvement in the nos and only going to get better. Steam turbin, hydro side, gas engine and gas turbine – they are doing well in exports – getting good export order inflow from it.
• No updates on railways side currently.
• Gas turbine – opportunity for the segment. Clients we are supplying? Opportunity for us? Gas turbine supplying to specific opportunity in shale gas energy in US. Mobile power units which are replacing diesel engines. Large opportunities. Don’t want to get over excited about it. Will put 20 units across the market by end of the year. Large opportunity – very exciting place to be about. This is still a new segment in the market. Rolls Royce has been launching the product and how the product is successful will be known in future. Large opportunity available. Only supplier to Rolls Royce and segment.
• Added two clients – when do we see them seeing giving us higher orders of 30 – 50 crore? Added Caterpillar and one more client in the segment? See improved business from them. Second client will take time to scale up.
• Steam exports – getting steady business in the segment. Last year we had lot of big machines coming up. Quite cyclic.
• Cost measures initiatives taken by the company? Last year we cut cost significantly. 395 crore last year to 480 – 490 crore revenue this year without adding much costs. Cost improvement and efficiency improvement next year.
• EBITDA margin guidance for this year? 10 – 15% guidance will stick to it.
• Railways – it is as per plan sales. 40 crore sales in the segment. Next year will be 100.
• Hydro – best ever revenue or close to that for FY20.
• Cant compare realisations on quarter to quarter basis
• Interest cost has gone up this quarter. Can it be annualized? 3.50 crore finance cost for the year – FY20
• Steam segment grew by 75% last year. Are we seeing growth this year also? This year there could be some flat or some reduction in the segment due to domestic side. Will not reflect guidance for full year. Break up of domestic and exports? Cant give that numbers.
• Employee expenses to increase by 4 – 5% every year.
• Waste management improvement in domestic market. Currently, it is mainly on export side but its increasing from domestic market. We have firm orders for domestic side and there will be deliveries this year. Size of the orders? Range from 10 MW to 25 MW.
• Timeline for reaching – 750 crore revenue? We will be close to 500 crore next year. Next year we will be around 550 – 600 crore. Then another year – we will reach may be next 2 – 3 years.
• Getting lot of export orders. Macro situation in US and Europe also slowing down. From where is demand coming from? We are relatively smaller player in the market. In general markets are shrinking, we are taking market share away from other players. Pricing pressure in the industry is there and we are more competitive. We already have presence in the market.
• Distillery business is seeing strong traction. If Triveni sees it, we also see it positively. Larger impact will be there next year and FY22. Take atleast 6 month time to produce boilers and turbines. Major impact to be felt next year.
• Current market situation? Not giving any negative guidance currently but will get back to you in November in next concall. Seeing some slow down across segments.
• Overall market share in domestic markets? 80% market share in domestic market. Global market share – 5 – 10% of market share for 50 MW. Global shut down taking place for large players in the segment – taking place slowly. Too early to talk about expansion currently.
• Railway opportunity – Nothing new to report on the railway side.
• Gross margins – will do better this year. Possible to go beyond 32 – 33% gross margins in future? We will break into 30s% this year compared to 29% last year.
• Cash – 148 crore. Debtors – 174 crore.
• Working capital commentary for next couple of year? This year (FY20) working capital cycle will be a bit extended compared to last year. Trying to tighten the conditions with our customers this year.
• Export orders and uptick in order inflow from from it might slightly compensate for slowdown in domestic orders, if any, next year.


TD Power reported a consolidated net profit of Rs 6.71 crore versus a loss of Rs 3.75 crore. Revenue was up Rs 134.5 crore in Q3 versus Rs 87.5 crore YoY.

1 Like

Is anyone still following it?

This company is into turbine manufacturing
The fund house Rajasthan Global Securities has bought 202553 shares on 18th December 2020.
The recent announcement of renewable energy park will definitely hep the company.

The company manufactures generators not turbine.

Yes I correct myself
They are into AC Generators

FY21 - Q3 Results and Investor Presentations.

Hello ,
Although the stock has posted good results last 2 Quarters
stock is not seeing much momentum
Technically i find its near to good breakout with good risk reward
details on chart , Breakout Above 170
With 150 as SL ( 200 weekly moving average )

any fundamental Inputs here would be useful .

lot of momentum in the market and we are finally seeing strong revival of long awaited capex cycle . very excited about sales growth in fy23” - Part of Nikhil Kumar’s opening remarks.

Things that stood out for me in the con-call

  • Revised Fy22 guidance to 650 cr (earlier 550 Cr) however Profits to be same as FY21 as commodity cost increases wont be entirely passed on to the customer to maintain long term relationships. however for all new orders booked this year will have a pass through mechanism hence not worried about raw material increase. Pass through Will reflect in numbers from Q4
  • Difficult to give guidance for fy23 right now but should do at least 720-750 cr. Will most likely upgrade this number later this year
  • Seeing significant demand from export and domestic market.
  • Secured 1st Large order for synchronous motors- 18 cr. Globally synchronous motors is more than a Billion dollar market
  • expanding into new business segments where we can utilize our technical capabilities(niche segments with higher margins) Have a very capable person leading new business development(hired from competitor).
  • Over the years have strengthened our position by being known as a quality manufacturer.TDPS brand is accepted almost everywhere now. Larger players are ceding from the below 50 MW segment as they are unable compete with TDPS.
  • can do 950-1000 cr turnover with current capacity. will spend 15 cr to do some de-bottlenecking in terms of automation and upgradation every year.
  • In railway business TDPS will essentially piggyback on Alstom’s strong growth in India
  • lot of potential in After Market business. very close to winning some orders here

Its been a long time since i heard the management being so upbeat about the future. Conservative management sounding extremely bullish. Company is set to Fire on all cylinders

Disc: Invested


Good numbers! Strong commentary on concall.

Heartening to see Expansion of margins despite sharp RM inflation. Management claims they ll be able to continue passing on the cost to end customer.

Interestingly Putins war has helped with demand from Europe and is likely to further increase as europe tries to Wean off Russian gas. Even in India there’s a lot of investment Happening in captive power plants. This Should augur well for their generator business. Valuations are still reasonable

Disc: Invested