U.S. Markets open in 4 hrs 17 mins

Edited Transcript of TRITURBINE.NSE earnings conference call or presentation 3-Feb-20 11:30am GMT

Q3 2020 Triveni Turbine Ltd Earnings Call

BANGALORE Feb 23, 2020 (Thomson StreetEvents) -- Edited Transcript of Triveni Turbine Ltd earnings conference call or presentation Monday, February 3, 2020 at 11:30:00am GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Arun Prabhakar Mote

Triveni Turbine Limited - Executive Director

* Dhruv Manmohan Sawhney

Triveni Turbine Limited - Chairman & MD

* Nikhil Sawhney

Triveni Turbine Limited - Vice Chairman & MD

================================================================================

Conference Call Participants

================================================================================

* Anand Bhavnani

Unifi Capital Pvt. Ltd. - Analyst

* Bhavin Vithlani;SBI Mutual Fund;Senior Analyst

* Harshit Patel

Equirus Securities Private Limited, Research Division - Associate

* Kirthi Jain;Sundaram Mutual Fund;Research Analyst

* Lalaram Singh

Vibrant Securities Private Limited, Research Division - Research Analyst

* Manish Goyal

Enam Holdings Pvt. Ltd - Investment Analyst

* Ravi Swaminathan

Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP

* Rishab Barar;CDR India;Executive

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Ladies and gentleman, good day. And welcome to Triveni Turbine Limited Q3 and 9-month FY '20 Earnings Conference Call. (Operator Instructions)

Please note that this conference is being recorded.

I now hand the conference over to Mr. Rishab Barar from CDR India. Thank you, and over to you, sir.

--------------------------------------------------------------------------------

Rishab Barar;CDR India;Executive, [2]

--------------------------------------------------------------------------------

Thank you. Good day, everyone, and a warm welcome to all of you participating in the Q3 and 9 months FY '20 earnings conference call for Triveni Turbine Limited. We have with us today on the call, Mr. Dhruv Sawhney, Chairman and Managing Director; Mr. Nikhil Sawhney, Vice Chairman and Managing Director; Mr. Arun Mote, Executive Director, along with other members of the senior management team.

Before we begin, I would like to mention that Stage 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 mailed to everybody earlier. I would also like to emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner. We will start this call with opening remarks from the management, following which we will have an interactive question-and-answer session.

I now invite Mr. Dhruv Sawhney to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [3]

--------------------------------------------------------------------------------

Thank you very much, and welcome, everybody, to the third quarter FY '20 earnings call. I'd like to begin by presenting you the 9-month consolidated key highlights. As we've been saying, operations of a business like ours are lumpy quarter-to-quarter, so I should concentrate on the cumulative 9 months results and then go into our feelings of the future both for the end of the year and for next year.

The net income from operations for 9 months consolidated is at INR 6.64 billion, a growth of 11% year-on-year. But our record is the PAT in the history of the company at INR 1.08 billion, a growth of 50%. Again, I would say that this is extraordinary for certain quarters and it's not something that happens every quarter. But we're very happy that the 9 months results have come out with such a good bottom line.

We have a strong outstanding order book at INR 7 billion -- INR 6.94 billion. The total order booking during the quarter in Q3 was good, and appreciably better than what it was in the first half of the year at INR 2.1 billion, a growth of 11% year-on-year. And this enabled us to bridge the gap, which was there in the first half, which I mentioned during the last conference call. The order booking for 9 months is just marginally lower than last year at INR 6.36 billion at -- versus INR 6.45 billion. We expect to end the year with the same, if not better, order booking than what we achieved in FY '19.

During the last -- during the 9-month period under review, the turnover was 11% higher than the last year's period. And here, the domestic side has grown very substantially by 24% and international was marginally lower.

In order booking, I would like to highlight that in Q3, our international order booking was very good. We started off the half year -- in the half year, we had a deficit of 63% versus -- 43% versus last year in the H1. That's comes out to 25% in -- at the end of Q3. And we expect good orders and we already have some in Q4, so we expect to end the year with -- at the same sort of order booking as we achieved in FY '19, if not slightly better.

In the international market, there have been a lot of turmoil, as you know. And for us, some of our key markets were affected, namely Pakistan, Turkey and the Middle East. But we are -- the future is looking extremely good because we have big growth of inquiries from Southeast Asia and from Europe. We have 42% of our inquiries are from Southeast Asia, 25% of them are from Europe. And here, we expect this good order conversion -- I mean, good inquiry conversion into orders. So FY '21 order booking also is looking up. And the mix is -- is what we are very encouraged on that where we are seeing domestic growth also and at least the same amount as international growth. So we have had a rectification of the situation that might have happened temporarily in H1 of the current year.

If we look at the 9-month period, net income, which was at INR 6.64 crores (sic) [INR 6.64 billion] an EBITDA of INR 1.49 billion for the 9-month period against INR 1.22 billion, a growth of 22%. And our PBT again has a growth of 28% and is standing at INR 1.38 billion. As I said earlier, the PAT was a very good 50% growth at over $1 billion and giving us an EPS not annualized of $3.34 per share.

I'll be going into the domestic and aftermarket in a few minutes and exports, but I'd like to just stress for a minute about our research development. The company has a long -- strong focus on technology development and -- through this very dedicated team of design and development engineers. And the push that we've had on efficiency of our products and making them more cost competitive has really borne fruit. And we are very encouraged now with proven results that we are at the front line of customer expectations on the value for the product looking at both efficiency and costs. And that is one of the reasons why we are encouraged by our order conversion -- inquiry conversion and the spread of our geographical inquiries and order bookings.

The company's efforts in design and testing is being closely supported by our collaborations with various international design houses and universities both in India and overseas. That's really the backbone of our support system. Our new test bed, which we put up and this is definitely the most modern test bed for a turbine facility globally, it has come into operation and it's already making the contributions of bringing down cost and time in our development cycle.

I think one of the points I'd like to mention in design and development is a new segment that we've got in order form, which is the Geothermal segment. We've received an order for a geothermal turbine refurbishment, which is very prestigious high-tech order. And here, the markets are in good growth both in Australasia and in Africa and good margins. So this is a good breakthrough that we've had in the last quarter.

The research that we are carrying out with the institute for the development of supercritical CO2 cycle turbines is carrying on and we've talked about it before. And we're very encouraged by the close cooperation that we're having both in India and overseas in this absolute frontline technology line. And this will continue for the next few years. But we are making good progress here and that's also a very encouraging fact.

A market which we have been talking about for some time is the oil and gas market, and we've developed new turbines for this market. I'm happy to report that in January, which is actually Q4, we've now received further breakthroughs in drive turbines. And -- so this is really -- it's taken a long time to get these breakthroughs. But the market, as you know, in the oil and gas for drives of small is very good. At the moment, we have just started. So the upside is big for FY '21 both in terms of margins and in terms of orders, even though the scale may be lower and the numbers are higher. But these are the developments that I'd like to share with you on the design and development.

I'd like to just quickly mention about our joint venture, GE Triveni, as communicated to you in June, Triveni has filed a petition with the National Company Law Tribunal and then this has now moved to the National Company Law Appellate Tribunal and the matter is [sub-judice]. It's reserved for orders. But this is not affecting our [turn-to] business. The JV has received orders of INR 830 million, and the performance of the JV in the quarter has been okay. It's achieved a total revenue of INR 1,170 million and a profit after tax of INR 158 million. So we are carrying on normally as we were before.

I just want to mention that in the domestic market, we are seeing, which may be a little different to what this renders, the situation is not bleak in the future. If anything, we have seen a slight upturn and we expect that to stay where it is in our segmented lines. They are coming from both the process co-generation, distillery segment, the biomass IPPs and the renewable space.

Comments on our aftermarket. At the moment, our percentage of aftermarket to total sales is down at 23% versus 27% previously. We expect in Q4 this to correct and we expect it to come back to 25%. And in H1 next year, we hope to be higher than 27% again. And so this is the encouraging order booking in aftermarket, both -- especially in the refurbishment international sphere. So this is the encouraging fact, which we've looked at. Now, we've got very hot inquiries and good traction in different geographical areas. So the aftermarket business is where we are seeing positive growth in FY '21 both in terms of execution of orders on hand and in terms of order booking for the balance -- and for the -- for '21-'22 and '22-'23.

On the export front, as I mentioned, we are expecting much better traction in Q4 and in FY '21, where we can see visibility in the first half. Again, it's the forefront that we've got in terms of our product. The acceptance of our new product in the market both in terms of efficiency and costs and the different geographical and product segments that we are catering to.

I would say that with our orders on hand right now, which are good, and more substantially the inquiry pipeline both internationally and for the aftermarket, we look forward to a very good performance in -- at the end of the year for FY '20 and a good performance going forward into the first half of '21, which we can see now.

The cost control efforts that we started last year have borne fruit and we are increasing these, and we'll be accelerating awareness initiatives in the next 6, 9 months. The new -- the penetration in new geographies are working and has strengthened the company's performance in the export market. We now have orders and installations in over 70 countries. And looking at future markets beyond the 70, the segments, as you know, are: Biomass; Paper, Process and Co-generation, Sugar Co-generation; Distilleries; Palm Oil; and the new segments of Waste-to-Energy; and the Oil & Gas.

We believe that this strong inquiry and order-on-hand pipeline, and the aftermarket business, which is picking up with the international market all goes well for Triveni Turbine into the next 6 to 9 months where we see visibility immediately.

Thank you. Open it to questions, please.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from the line of Ravi Swaminathan from Spark Capital.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [2]

--------------------------------------------------------------------------------

First question is regarding the drive turbine. You had mentioned that you had won an order in the fourth quarter. Just wanted to get a sense how large is the opportunity there? And what is the size of possible quantum of order that you had received in fourth quarter?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [3]

--------------------------------------------------------------------------------

Ravi, see, the point is that, as the Chairman said, the drive turbine market is a market where we have very low part -- installed base ourselves. So it's a market for us where we look at in terms of approaching it in a manner where we can expand a new product category and segment. So the fact that we are facing success in it, leave the matter of -- it is a large turbine order, let's not getting into the [details] of it, but we think that this proves our contention that we have a reasonable product for this line. We have products, which will sell well, and this is specifically into the Oil & Gas segment itself, which is a more lucrative end of the drive turbine market. So it's something that's very encouraging and it's something that we've been talking about. Yes, it'll take time for us to establish a good market share, but we're on our way. We think that we will get more traction as we go along.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [4]

--------------------------------------------------------------------------------

The oil and gas market is different to other markets because there they have -- they replace their turbines. These drive turbines are small costs for the oil and gas sector. So they are replaced very often in terms of the -- versus other power generation process industries. So that's why even though the oil and gas market may go up and down, the drive market for oil and gas is a fairly stable one.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [5]

--------------------------------------------------------------------------------

Got it. So I mean, is it like they replace pumps with these drive turbines or how is it?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [6]

--------------------------------------------------------------------------------

No, the turbine drives the pumps. The drive turbine drives the pumps. It drives the compressor. It drives the blower.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [7]

--------------------------------------------------------------------------------

Okay, okay. And that gets replaced often, you are saying?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [8]

--------------------------------------------------------------------------------

Yes, there has been...

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [9]

--------------------------------------------------------------------------------

And these orders are from the Middle East, mostly?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [10]

--------------------------------------------------------------------------------

Yes, they're. You got it.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [11]

--------------------------------------------------------------------------------

Got it. And in terms of exports, you had mentioned that there is a healthier pipeline -- inquiry pipeline. So basically, what could be the size of that pipeline? Initially, you used to give numbers in terms of gigawatt. How is it now vis-?-vis how it was last year for export and domestics? If you can give us some idea, it will be great.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [12]

--------------------------------------------------------------------------------

As I said, we are expecting order booking to be the same as last year. The inquiry from Southeast Asia and Europe is very good. I'm getting the figures of 2.5 gigawatts.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [13]

--------------------------------------------------------------------------------

Okay. And last year, how was it, sir, similar time? Should have been...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [14]

--------------------------------------------------------------------------------

About the same.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [15]

--------------------------------------------------------------------------------

About the same.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [16]

--------------------------------------------------------------------------------

But I'm telling you why we are more encouraged is because the areas that they are from are not the ones that went back.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [17]

--------------------------------------------------------------------------------

They're more diversified.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [18]

--------------------------------------------------------------------------------

You see, we earlier had orders from Pakistan and from Turkey and all, now those markets just -- they were not available to -- Turkey dried up and Pakistan went elsewhere, even though it was a very major market for us, and as you know, we had a major market share of sugar co-generation in Pakistan Triveni had.

--------------------------------------------------------------------------------

Ravi Swaminathan, Spark Capital Advisors (India) Private Limited, Research Division - Assistant VP [19]

--------------------------------------------------------------------------------

Got it, got it. And my final question is with respect to the JV. I mean, we continued to keep receiving orders from this, in spite of the case, which is going on currently. So is it like these orders are the ones which we had bidded for earlier during better times and that is getting converted into orders now? Or is it like -- so basically, joint venture continues to bid for order, in spite of the misunderstanding between the 2 parties?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [20]

--------------------------------------------------------------------------------

We continue to bid for orders.

--------------------------------------------------------------------------------

Operator [21]

--------------------------------------------------------------------------------

Next question is from the line of Bhavin Vithlani from SBI Mutual Fund.

--------------------------------------------------------------------------------

Bhavin Vithlani;SBI Mutual Fund;Senior Analyst, [22]

--------------------------------------------------------------------------------

Congratulations on good numbers despite [volatile market]. Just a clarification on the international. I'm looking at your press release, which mentions 28% growth in the order booking and you mentioned healthy inquiry, but you mentioned the order booking will be similar to the last year. So can you help us...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [23]

--------------------------------------------------------------------------------

But that's in the quarter, Q3 showed a growth versus last year. But for the 9 months, it's still a deficit over last year if you look at the numbers. What the Chairman was pointing to is the fact that for the full year, the international market, we would be meeting up with the numbers, at least from that front, while the domestic market, as you see, itself has grown quite considerably. So we're looking positively at the opening order book starting FY '21.

--------------------------------------------------------------------------------

Bhavin Vithlani;SBI Mutual Fund;Senior Analyst, [24]

--------------------------------------------------------------------------------

And you also mentioned about encouraging pipeline on the aftermarket, some color on -- some more color on that will be helpful.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [25]

--------------------------------------------------------------------------------

This is just because we're a month into Q4. So we have visibility on orders that we have placed. And so that's what he was saying in terms of being able to get a better order book and opening order book in the aftermarket segment as well getting into next year.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [26]

--------------------------------------------------------------------------------

But I can see one very encouraging, it's a bit of a long haul, but a huge market, is the refurbishment of other people's turbines, especially internationally, of other mix. And we have received orders, and we have -- some of the inquiries are very hot. And those are very good orders and good margin orders and good scope, where we were able to have -- where you're able to get growth in various different segments and various different industry segments and geographical segments.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [27]

--------------------------------------------------------------------------------

So you see the area of aftermarket stretches from 2, 3 areas. One is, of course, the parts for our own turbines, the other is a service for our turbines and then is for third party. For our own turbines, that organically is growing at about 7%, 8%, 10% a year based both on a larger installed base as well as certain inflation on the product -- on the pricing side. Service, similarly. And so organically, and these, of course, at good margins, and so we're able to get a good contribution from that. The refurbishment area is dependent on multiple different product offerings that we have, which stems from anywhere from overall to higher value addition services, such as reblading and upgradation of the power output from a turbine. Now -- so this all depends on where we sit and our proximity to customers and our relationship with customers. It's very difficult to provide you great clarity on how we can do this apart from saying that the conversation that we're having are such at an advanced level with customers that give us confidence and some of those already translate into orders. So it's a question of just moving ahead with this segment on a geographic basis where we can cater to customers' expectations better.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [28]

--------------------------------------------------------------------------------

But as you know, here, where the real breakthroughs have been for us. We've got people with other made turbines, who have agreed to air freight the rotor back to us and we refurbish it, we engineer it and give it back to them with a better efficiency and freight it back to them. That's a very substantial transportation logistic, which they feel we are still very, very competitive in doing it plus not having the turbine work for some time.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [29]

--------------------------------------------------------------------------------

And when we do this, we are looking at it as relationships with groups. So one of the large groups in India has placed an exclusive contract with us for aftermarket service of third-party turbines with some confidence, of course. But the fact is that this is -- we approached it in a -- we started approaching it from a basis where we can occupy our overhead better in terms of sales and support.

--------------------------------------------------------------------------------

Bhavin Vithlani;SBI Mutual Fund;Senior Analyst, [30]

--------------------------------------------------------------------------------

But this large group business, you're talking about internationally and not India.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [31]

--------------------------------------------------------------------------------

No, this is in India, but the approach is the same internationally.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [32]

--------------------------------------------------------------------------------

Internationally, also we have a good group from South Africa.

--------------------------------------------------------------------------------

Bhavin Vithlani;SBI Mutual Fund;Senior Analyst, [33]

--------------------------------------------------------------------------------

Sure. And given this, could we assume that a double-digit growth next year seems to be a higher probability?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [34]

--------------------------------------------------------------------------------

We were not wanting to put any forecast out. It's too early. But I can say that we are encouraged and we expect growth.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [35]

--------------------------------------------------------------------------------

We would expect that. And we are...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [36]

--------------------------------------------------------------------------------

I would like to say growth rather than putting numbers.

--------------------------------------------------------------------------------

Operator [37]

--------------------------------------------------------------------------------

The next question is from the line of Anand Bhavnani from Unifi Capital.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [38]

--------------------------------------------------------------------------------

I have 3 questions. The first question is, at early in the year, you had indicated that we have no offices set up overseas to run more business and we have been spending on it. So if you can update us as to how that is panning out? How many offices have been opened? And is there any business generated out of this initiative?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [39]

--------------------------------------------------------------------------------

I'll take all 3 questions. Give me the other 2?

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [40]

--------------------------------------------------------------------------------

Yes. The second is in terms of business this year, you indicated we lost quite a bit of business to -- which earlier used to come from Pakistan and Turkey. If you can quantify it as to what was our total, let's say, revenue contribution from Pakistan in FY '19, similarly for Turkey?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [41]

--------------------------------------------------------------------------------

No, no, we don't go into these commercial -- these are fairly sensitive commercial matters, which -- to give out such details. We haven't done that in the past also.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [42]

--------------------------------------------------------------------------------

And the third question was on capital location. Last year, you did a buyback, and it's -- the time period to consider buyback is, again, approaching. So are there any updates whether the buyback is on the cards?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [43]

--------------------------------------------------------------------------------

I can tell you, we finished our Board meeting, but nothing has been discussed. But we are sitting on about INR 150 crores of -- so the liquidity of the company is good and liquidity in the company is expected to be increased on -- good. So we are in a little different position to many other manufacturing companies in India, where we are having treasury operations. We have very conservative treasury operations and -- rather than anything else, and the balance, I would have to say, needs to be considered by our Board.

But I can take your first question, and I want to be a little bit open with everybody. We looked at our handling international sales through the offices and are handling them from Bangalore. And we found that the value-add from the -- having the quality and the number of people we have to send from Bangalore to support it was still quite a lot. So we were not getting as much value-add as we thought we were going to get, that we could do it just as easily and at a cheaper cost than as effectively but more from Bangalore. So while the travel costs may be sadly increasing from Bangalore, we were getting better coverage and the results have been good. So we have not -- we wound down -- some of the operations down slightly in the international share offices. That's all. But we are not looking at opening any new ones.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [44]

--------------------------------------------------------------------------------

And sir, in case of our existing setup, we are not anticipating any additions in FY '21. We have enough capacity, right? So there will be no CapEx, is that safe to assume that?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [45]

--------------------------------------------------------------------------------

No, we've got plenty of space in capacity utilization with the new factory. And CapEx is very small, similar to what was in the current year of

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [46]

--------------------------------------------------------------------------------

76...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [47]

--------------------------------------------------------------------------------

No 22 -- about INR 23 crores, which is not much. That is so some balancing and some testing and some R&R and some design software. And we are -- we've acquired a bit of CapEx, I mean, the figure is similar to this year, which is just around INR 20 crores, INR 21 crores. Automation, IoT, so we are growing very heavily. We're in a project management, Primavera. So we are more on the technology side, both in terms of design technology, automation, and speed of doing business.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [48]

--------------------------------------------------------------------------------

Sir, and if I may squeeze in one question, we had taken some cost control initiatives. So is there any benefit left or we have already gotten all the benefits from the cost...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [49]

--------------------------------------------------------------------------------

No, no, no. We have taken it, but we have looked at areas of further cost benefits. And we are even -- some of our design efforts are continuing to go in this direction. So we are spending money for cost reduction. And we will continue to do that. We feel we can still get more cost out in the next 6 to 8 months. Arun? Absolutely.

--------------------------------------------------------------------------------

Arun Prabhakar Mote, Triveni Turbine Limited - Executive Director [50]

--------------------------------------------------------------------------------

We'll continue to have the savings in Q1, Q2 and then further on.

--------------------------------------------------------------------------------

Operator [51]

--------------------------------------------------------------------------------

The next question is from the line of Harshit Patel from Equirus Securities.

--------------------------------------------------------------------------------

Harshit Patel, Equirus Securities Private Limited, Research Division - Associate [52]

--------------------------------------------------------------------------------

Sir, I had 2 questions. The first is, some time ago, there was an order from Central Pollution Control Board that even captive power plants will have to put FGD system. So if they do that, do their cost goes up, and consequently, their internal return ratios come down? So that -- does this affect any way the demand for our kind of turbines?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [53]

--------------------------------------------------------------------------------

No, one thing, let me -- to explain something, most -- no one is setting up a power plant, a captive power plant, to export to the grid. There may be a consequence if it's a biomass-based pipeline, which has a different sub-zero -- air pollution control. But from a cost economic perspective and steam is used as part of the process, the cost of that steam net will always validate the company to set up a power generation plant at site.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [54]

--------------------------------------------------------------------------------

But they don't have -- where -- what you're talking about is not really applicable to the type of power generation people we sell to. And so it's really not a consideration at all. People are happy to go for air pollution, they are going for zero discharge and things which is in boilers. And so it's not really -- the turbine part is very, very small, if at all.

--------------------------------------------------------------------------------

Harshit Patel, Equirus Securities Private Limited, Research Division - Associate [55]

--------------------------------------------------------------------------------

And sir, my final next question would be a bookkeeping one. So in our outstanding order book for aftermarket, sir, can you break that up between domestic and exports?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [56]

--------------------------------------------------------------------------------

I don't know what level of detail we gave, but I think the detail is in our investor brief. You can take it from there.

--------------------------------------------------------------------------------

Harshit Patel, Equirus Securities Private Limited, Research Division - Associate [57]

--------------------------------------------------------------------------------

Sir, that's actually not given in the presentation. Earlier, you used to give this detail. That's why I asked.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [58]

--------------------------------------------------------------------------------

Well, if you get back to us offline, we'll give it to you. I don't have it with me right now.

--------------------------------------------------------------------------------

Operator [59]

--------------------------------------------------------------------------------

Next question is from the line of Manish Goyal from Enam Holdings.

--------------------------------------------------------------------------------

Manish Goyal, Enam Holdings Pvt. Ltd - Investment Analyst [60]

--------------------------------------------------------------------------------

A couple of questions, sir. First, on -- sir, do you see any risk on executing the current order book or potential order inflow from the outbreak of the virus in China?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [61]

--------------------------------------------------------------------------------

No, we have no orders from China or...

--------------------------------------------------------------------------------

Manish Goyal, Enam Holdings Pvt. Ltd - Investment Analyst [62]

--------------------------------------------------------------------------------

No, not China, but say probably it's like Southeast Asia and...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [63]

--------------------------------------------------------------------------------

Southeast Asia, not really.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [64]

--------------------------------------------------------------------------------

Not much. We continue to export.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [65]

--------------------------------------------------------------------------------

Yes. They're not -- and the people who are chasing up and -- are not really -- I don't find anything. I myself, I'm thinking of traveling this month.

--------------------------------------------------------------------------------

Manish Goyal, Enam Holdings Pvt. Ltd - Investment Analyst [66]

--------------------------------------------------------------------------------

And sir, sorry to harp again, but just on your initial remarks in terms of order inflow, which was similar to FY '19, just back of the envelope calculation shows that the order inflow number would more or less remain between INR 210 crores and INR 220 crores, which will again be equivalent to number what we -- inflow number which we had in the Q4 of last year. And -- so ideally, what it implies is that the order book, which is already 8% down in the first 9 months and looking at Q4 execution, which is always the best quarter, my worry is that your order book may decline more than 10%, which in turn probably reduces the growth opportunity for FY '21.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [67]

--------------------------------------------------------------------------------

No, no, it doesn't matter what you're talking about.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [68]

--------------------------------------------------------------------------------

Yes, we have said that we hope to -- we expect to have an opening order book on 1st of April 2020, which will be...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [69]

--------------------------------------------------------------------------------

Same if not better.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [70]

--------------------------------------------------------------------------------

Same if not slightly better than what it was on 1st April, 2019.

--------------------------------------------------------------------------------

Operator [71]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is a follow-up from the line of Anand Bhavnani from Unifi Capital.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [72]

--------------------------------------------------------------------------------

Sir, I just wanted to understand for our domestic as well as international market, is there a threat of refurbished turbines of, let's say, Chinese mix being a more cost-effective option for customers and they're preferring...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [73]

--------------------------------------------------------------------------------

No, zero. We have refurbished Chinese turbine.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [74]

--------------------------------------------------------------------------------

No, no, no, they're...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [75]

--------------------------------------------------------------------------------

No, they are not able to -- let me tell you that in the power generation market in our range, the Chinese don't seem to be keen with their manufacturers at all. I mean, there are so many of them. They are -- they're quite happy to concentrate on the Chinese market and on the -- where there's Chinese-funded project. I wanted to also mention to you that from an international source -- international data source of steam turbines, in the first 9 months of FY '19, for which the data has been given to us by this -- when we are a subscriber to the source, in the 5 to 30-megawatt line globally, we are #2 in terms of number of turbines and megawatts of turbines...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [76]

--------------------------------------------------------------------------------

It's units sold.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [77]

--------------------------------------------------------------------------------

Units sold internationally. So that is, I think, a very commendable thing that we've achieved this -- we did that in FY '18 also. And there are no Chinese anywhere in the horizon in that. So that's why we know where they are.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [78]

--------------------------------------------------------------------------------

Sir, and just secondly, wanted to understand if you were to keep aside the loss of business in Pakistan, Turkey, any other significant disappointments for us in the first 9 months of the financial year?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [79]

--------------------------------------------------------------------------------

No, I mentioned it to you. These are the 2 places. And some parts of the Middle East, which we've also compensated now.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [80]

--------------------------------------------------------------------------------

Disappointment in Africa also.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [81]

--------------------------------------------------------------------------------

But Africa, I personally hadn't thought that it's -- but there are other parts of Africa that have picked up this Nigeria part, so that's total Africa though. But let me give you more is to say where we're finding encouraging inquiries and growth from, which is Southeast Asia. And I don't think that it's going to be affected by the virus. And Europe, there, we are seeing good traction in inquiries. But when I talk about inquiries, I talk about things that look like active inquiries. So we categorize our inquiries also into 3 categories of completely budgetary or active and very active.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [82]

--------------------------------------------------------------------------------

And sir, in terms of inquiries, any quantification, like are the inquiries same as last year or they are like...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [83]

--------------------------------------------------------------------------------

They are very diversified. But as you know this is -- we don't even want to speculate on that internally. It varies from country to country and segment to segment. So the risk mitigation for Triveni Turbine is to approach all.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [84]

--------------------------------------------------------------------------------

And in case of sugar distilleries in India, have we -- are we seeing any pick up further from the existing levels? Or is there...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [85]

--------------------------------------------------------------------------------

There is some pickup.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [86]

--------------------------------------------------------------------------------

Sorry?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [87]

--------------------------------------------------------------------------------

There is some pickup.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [88]

--------------------------------------------------------------------------------

Okay. So would you expect FY '21 to be better from a sugar distillery sector kind of perspective?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [89]

--------------------------------------------------------------------------------

It could be in terms of orders, but it's not very substantial, but it'll be about the same, if not slightly better. You see the turbine component is not a very large megawatt.

--------------------------------------------------------------------------------

Operator [90]

--------------------------------------------------------------------------------

The next question is from the line of Lalaram Singh from Vibrant Securities.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [91]

--------------------------------------------------------------------------------

Sir, my first question is on domestic market. Do you see any signs of improvement from the core sectors, like cement, steel?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [92]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [93]

--------------------------------------------------------------------------------

Yes, cement and waste...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [94]

--------------------------------------------------------------------------------

Waste heat recovery.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [95]

--------------------------------------------------------------------------------

Waste heat recovery. Good traction in waste heat recovery and cement and steel.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [96]

--------------------------------------------------------------------------------

Okay. But greenfield is still a long way ahead?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [97]

--------------------------------------------------------------------------------

Yes, yes. I -- but this is quite good. I mean, the history of capacity. And this is something that are more -- greenfield, they take a long time to plan and by the time of the financing and all, we don't even put that into. If an inquiry comes, it doesn't mean we know it's an active inquiry. But these are things that customers act on fairly quickly because for them, the ROI is quite fast.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [98]

--------------------------------------------------------------------------------

So within waste heat, cement is doing well. Even in steel, do you see positive traction?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [99]

--------------------------------------------------------------------------------

Less, but, you see, we achieved recovery, which we are saying is the recovery for the ROI for the person is quite good. So while cement, maybe they're not thinking of big brownfield expansion or greenfield expansion, this is a small brown -- this is a sort of a balancing pollution control cost. So it's -- because it comes into these fields, for the large cement companies, this is small CapEx.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [100]

--------------------------------------------------------------------------------

Got it. And is my understanding correct that steel has a lower penetration of waste heat compared to cement?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [101]

--------------------------------------------------------------------------------

No, it's the other way around.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [102]

--------------------------------------------------------------------------------

No, they...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [103]

--------------------------------------------------------------------------------

It's the other way around. Sir, cement has a very low penetration.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [104]

--------------------------------------------------------------------------------

Yes, so we're having more potential coming in cement.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [105]

--------------------------------------------------------------------------------

Got it, got it. Second question is on the gross margins. This quarter, we have done around 48%, and we have seen good improvement over the last 4 quarters. So do you foresee the gross margin to stabilize at these levels? Or...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [106]

--------------------------------------------------------------------------------

Yes, that's a correct statement.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [107]

--------------------------------------------------------------------------------

Okay. And we have also made very conscious effort to control the OpEx and I see that it has been pretty constant over the last 4 quarters. So do you believe -- are we doing any -- our employee base, has it gone down or is it constant? Because I don't see that employee expense going anywhere over the last 4 to 5 quarters.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [108]

--------------------------------------------------------------------------------

No, we are looking at it very...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [109]

--------------------------------------------------------------------------------

No, we look at cost at every level in terms of moving people around and reskilling, et cetera. But from a total overhead perspective, we have put a lot of control and focus on administrative expenses that include travel. You see, like the Chairman is saying, international marketing is being handled largely by Bangalore. So those will then reflect under administrative costs, and you also then have other overhead. So we're tightly controlling matters. People, we have always a need to expand higher value-added segments such as design engineering, R&D, and we keep expanding our personnel there, but we rebalance our requirements based on the situation as it exists today.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [110]

--------------------------------------------------------------------------------

But as you noticed, the OpEx is still fairly constant.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [111]

--------------------------------------------------------------------------------

Yes, that is very commendable. Okay...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [112]

--------------------------------------------------------------------------------

We want to keep this D&A, if not make it a little better.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [113]

--------------------------------------------------------------------------------

Sure. Next, which is on the Oil & Gas business, so you said that's a very lucrative business, that was because of its repeatability or lower product life cycle that is -- we had more repeat orders or is it because profitability?

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [114]

--------------------------------------------------------------------------------

Both.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [115]

--------------------------------------------------------------------------------

Okay. And why profitability higher there? Is it lower competition or...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [116]

--------------------------------------------------------------------------------

Exactly, and higher specifications.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [117]

--------------------------------------------------------------------------------

Okay. And what would be the motivation of the clients or customers to switch to Triveni, lower cost?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [118]

--------------------------------------------------------------------------------

And the design, infrastructure and the other -- we are a big global player in steam turbines. And so why would we not have the same expertise then. And lastly, it's -- I think we have an edge over others in service.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [119]

--------------------------------------------------------------------------------

No. But given that we have been in this business for last, more than, I think, many years, so why did it take us so long? I mean, is it because of a high switching cost is there, which took us so much of time? Or...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [120]

--------------------------------------------------------------------------------

There is a huge R&D cost to get it and a huge qualification. You know, to get registered with these oil companies is a long process. They're very, very -- Kuwait National Oil Company (sic) [Kuwait National Petroleum Company], Aramco are not easy to get registered with.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [121]

--------------------------------------------------------------------------------

Okay. So going forward, if I take a 5-year view, is it fair to say that this part of the business can be at 15%, 20% of the overall business?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [122]

--------------------------------------------------------------------------------

Well, we are going to have some brainstorming. It's a useful point you mentioned. But certainly, what we -- even we are -- actually, once we have a few more breakthroughs, I would say that's not a conservative figure. That's an easy figure.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [123]

--------------------------------------------------------------------------------

Great. Can I pull in one more question, please?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [124]

--------------------------------------------------------------------------------

Fine.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [125]

--------------------------------------------------------------------------------

Within Southeast Asia, what is driving the demand, which you're saying, the inquiry has been very positive?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [126]

--------------------------------------------------------------------------------

Sectors of process industry, biomass, waste-to-energy...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [127]

--------------------------------------------------------------------------------

Solid municipal waste incineration, waste-to-energy.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [128]

--------------------------------------------------------------------------------

Waste-to-energy and the process industry that are also still on the -- just like the cement plants and what's happening domestically are happening there. Small power additions they're doing and the returns are coming.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [129]

--------------------------------------------------------------------------------

Okay. In Europe, it is mostly renewable, is it biomass?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [130]

--------------------------------------------------------------------------------

The AI return, and municipal waste-to-energy

--------------------------------------------------------------------------------

Operator [131]

--------------------------------------------------------------------------------

The next question is from the line of Kirthi Jain from Sundaram Mutual Fund.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [132]

--------------------------------------------------------------------------------

Sir, congratulation on good margin performance, first of all, sir. Sir, secondly, on this sugar distilleries, are the ordering starting, sir, to come to us?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [133]

--------------------------------------------------------------------------------

I'm sorry, I didn't hear that, sorry.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [134]

--------------------------------------------------------------------------------

Sir, the sugar distillery, which had to be set up in the Maharashtra region, have they started to come up, sir? And...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [135]

--------------------------------------------------------------------------------

No, the distillery in Maharashtra, are we getting any distillery orders?

--------------------------------------------------------------------------------

Arun Prabhakar Mote, Triveni Turbine Limited - Executive Director [136]

--------------------------------------------------------------------------------

Yes, yes. We are getting orders.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [137]

--------------------------------------------------------------------------------

Our Executive Director will answer. Mr. Mote?

--------------------------------------------------------------------------------

Arun Prabhakar Mote, Triveni Turbine Limited - Executive Director [138]

--------------------------------------------------------------------------------

We are getting orders and they're from all over the country, not necessarily one area.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [139]

--------------------------------------------------------------------------------

Maharashtra, we are getting?

--------------------------------------------------------------------------------

Arun Prabhakar Mote, Triveni Turbine Limited - Executive Director [140]

--------------------------------------------------------------------------------

Maharashtra, we are getting. South, we are getting, North, we are getting. All over. There's no specific...

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [141]

--------------------------------------------------------------------------------

They are getting executed, yes. They have been executed also.

--------------------------------------------------------------------------------

Arun Prabhakar Mote, Triveni Turbine Limited - Executive Director [142]

--------------------------------------------------------------------------------

And that these are typically 4 to 8-megawatt orders.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [143]

--------------------------------------------------------------------------------

Okay. Sir, how is the potential going forward, sir, in the next year, sir?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [144]

--------------------------------------------------------------------------------

I think I've already mentioned that quite in detail both in the international sphere and also given you the strong inquiry base that we have. So it's very positive in terms of order bookings for next year and -- if that is what your question is. So -- and that is the growth potential for the balance part of FY '21 and going into '22. So we really look at order booking and that looks okay.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [145]

--------------------------------------------------------------------------------

Okay. Sir, lastly, sir, when we see our backlog, it's at INR 694 crores. And during one of the earlier questions, you had highlighted that our aspiration is to be flat on a Y-o-Y, that INR 723 crore kind of number. If we see -- and assuming even a flattish -- flat number Y-o-Y, which will mean INR 280 crores of revenue -- I mean, order flow ask, sir. Isn't it a challenging ask, sir, for Q4? It would mean a highest ever order...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [146]

--------------------------------------------------------------------------------

That is aftermarket. It include -- it is challenging. You've done the math right. But we're looking at both aftermarket and product.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [147]

--------------------------------------------------------------------------------

In Q4.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [148]

--------------------------------------------------------------------------------

Yes, but -- okay. So we're constant to -- I mean, do around that, sir, but...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [149]

--------------------------------------------------------------------------------

But you know, let me tell you, if suppose we get it in end of March or it goes into first week of April, the spreading out of quarter-to-quarter is good. We have to show the visibility going out into H1 of next year, not just the -- and the second thing, let me tell you that the execution period of order varies from 3 months to 14 months. So it's -- we really look at picking up orders to fill in our turnover requirements.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [150]

--------------------------------------------------------------------------------

Okay. Sir, we -- JV has been profitable on a YTD basis. How do you see for next year, sir?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [151]

--------------------------------------------------------------------------------

I -- we are looking at -- the business is normal.

--------------------------------------------------------------------------------

Kirthi Jain;Sundaram Mutual Fund;Research Analyst, [152]

--------------------------------------------------------------------------------

Okay. No, like last year was lost. Like -- next year also, will we be profitable company, sir? Like based on the order backlog...

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [153]

--------------------------------------------------------------------------------

We said -- when I say normal, if we've been showing profits, there's no reason why we shouldn't do that again.

--------------------------------------------------------------------------------

Operator [154]

--------------------------------------------------------------------------------

The next question is from Anand Bhavnani from Unifi Capital.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [155]

--------------------------------------------------------------------------------

Sir, on oil and gas, we have been having a conversation on these calls for 3, 4 quarters now. Wanted to get a sense as to how many companies in oil and gas space have we kind of applied?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [156]

--------------------------------------------------------------------------------

If you go to one company, let's take Pertamina or Petronas, there are 12 different divisions in the oil and gas company of Indonesia and Malaysia and Kuwait, so it's huge. And each one, when they prequalify you, it's a very big thing because then they have to send you the inquiry.

--------------------------------------------------------------------------------

Nikhil Sawhney, Triveni Turbine Limited - Vice Chairman & MD [157]

--------------------------------------------------------------------------------

And it's an expensive process for them also.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [158]

--------------------------------------------------------------------------------

And they just -- and their verification and their diligence is -- and these people, their eye is not on getting another person in. They're really not -- they say we already have 2 parties, why do we want another one. And it -- you need a lot of perseverance and our Middle East office is doing a lot in that. So is our Southeast Asia office. They concentrate on that. We deliver the (inaudible) in this and domestically.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [159]

--------------------------------------------------------------------------------

So currently, you mentioned Middle East and Southeast Asia, we have offices. We are not putting any efforts in the U.S. market?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [160]

--------------------------------------------------------------------------------

You have a good point. We are thinking of now.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [161]

--------------------------------------------------------------------------------

Okay. And in the Middle East and Southeast Asia, as of today, do we have any approvals to be a pre-qualified vendor?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [162]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Anand Bhavnani, Unifi Capital Pvt. Ltd. - Analyst [163]

--------------------------------------------------------------------------------

Okay. And would it be like fair to say that if we have, maybe 2 or 3 approvals by the end of FY '21, so over next 15 years, maybe 2 approvals, 3 approvals in, would it be a good situation from our perspective or would it be undershooting, overshooting?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [164]

--------------------------------------------------------------------------------

No, no. I would want more.

--------------------------------------------------------------------------------

Operator [165]

--------------------------------------------------------------------------------

The next question is from the line of Lalaram Singh from Vibrant Securities.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [166]

--------------------------------------------------------------------------------

Sir, sorry about my ignorance, but may I know what is the issue in Turkey?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [167]

--------------------------------------------------------------------------------

The issue in Turkey is the internal situation and the economy there. The people have put their projects on hold.

--------------------------------------------------------------------------------

Lalaram Singh, Vibrant Securities Private Limited, Research Division - Research Analyst [168]

--------------------------------------------------------------------------------

So this is a recent phenomenon or has it happened over the last 12 months?

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [169]

--------------------------------------------------------------------------------

Last 16 -- 15, 16 months, you've been reading about it. So we are -- their project, they have not lost their project, but they've just been put on hold.

--------------------------------------------------------------------------------

Operator [170]

--------------------------------------------------------------------------------

(Operator Instructions)

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [171]

--------------------------------------------------------------------------------

Okay I think we've -- should we wrap it up?

--------------------------------------------------------------------------------

Operator [172]

--------------------------------------------------------------------------------

As there are no further questions, I now hand the conference over to the management speakers for closing remarks.

--------------------------------------------------------------------------------

Dhruv Manmohan Sawhney, Triveni Turbine Limited - Chairman & MD [173]

--------------------------------------------------------------------------------

Thank you. Thank you, everybody. Thank you very much for the very interesting questions. And I'd like to end as we started the call that we've had an exceptional 9 months' performance. And going forward, we're very encouraged with the inquiry pipeline, the orders on hand, the new geographical segments that we've been able to attack. And we've talked so much about oil and gas and geothermal, in Southeast Asia and Middle East areas and Europe. And so we look forward to a bright future in -- not just in the last quarter, but in FY '21. Capacity is there, technologies have now -- are in the front line, and we feel that we -- our service element is really very big distinguishing factor for Triveni and its competition and also from the bottom line. Thank you.

--------------------------------------------------------------------------------

Operator [174]

--------------------------------------------------------------------------------

Thank you very much, members of management. Ladies and gentlemen, on behalf of Triveni Turbines, that concludes today's conference call. Thank you all for joining us. And you may now disconnect your lines.