1. Financial Performance
Standalone Q1 FY26 vs Q1 FY25
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Revenue: ₹3.63B vs ₹2.66B — +36% YoY
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EBITDA Margin: 18.7% (excl. exceptionals/treasury income) vs 17.17% — +153 bps
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PAT: ₹471M vs ₹312M — +51% YoY
Consolidated Q1 FY26 vs Q1 FY25
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Revenue: ₹3.76B vs ₹2.77B — +36% YoY
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PAT: ₹500M vs ₹356M — +40% YoY
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Cash Position: Strong at ₹2.3B
2. Order Book & Inflow
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Order Book (Manufacturing): ₹14.68B
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Generators & Motors: ₹10.8B
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Railways: ₹3.48B
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Spares & Aftermarket: ₹0.11B
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Turkey operations: ₹0.29B
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Order Inflow Q1: ₹3.92B (+32% YoY)
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Exports & deemed exports: ₹2.57B (66% of inflow)
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Domestic: ₹1.35B
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3. Segmental / Market Commentary
Steam Turbine (Domestic & Export)
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Steady growth of 10–12% in captive power, biomass, WHR.
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Strong Q1 orders for large 4-pole machines; robust Q2 pipeline.
Gas Turbine & Gas Engine
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US tariff issue:
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Additional 25% tariff (possibly rising to 50%) on Indian exports to US.
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Plan B: Shift part production to Turkey to qualify for 15% duty under Turkey-US arrangement.
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Impacted volume: ~4–5% of overall sales (direct US exports).
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Majority (75%) of US exports already routed via European OEMs (15% duty).
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Demand outlook from US & EU very strong, led by data centers & AI-driven power needs.
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Likely to exceed FY26 guidance (₹15B consol) & FY27 guidance (₹18B consol).
Hydro
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Record order inflow expected next year; large refurbishment projects in pipeline.
Motors
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FY26 target: ₹1.5B revenue
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FY27 target: ₹2B+
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Large synchronous motor orders expected soon.
Railways
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Orders for US, EU, Russia markets in FY27 + ongoing Alstom India supply → strong uptick next year.
4. Strategic Initiatives
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Turkey Plant: Already operational; will handle US-bound direct orders if tariffs persist. Minimal manpower addition (5–10 staff).
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UK Design Centre: Developing in-house large generator designs (50–150 MW) post-license agreement expiry. Target commercial rollout FY28 onwards.
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Data Center Opportunity in India: Currently small (diesel backup dominated). Large-scale AI server farms could drive future gas engine/turbine demand.
5. Guidance & Capacity
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FY26 Revenue Guidance: ₹1,500 Cr (with upside potential).
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Margins: Maintain at current ~18–19% ± 0.5%.
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Capacity: 3rd plant commissioning in Q2–Q3 → total potential ~₹2,000 Cr, scalable to ₹2,300–₹2,400 Cr without major capex for next 2 years.
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Capex FY26: ₹40–45 Cr (₹20 Cr maintenance, rest growth).
6. Other Points
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Working Capital: ~120 days; high billing at quarter-end.
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Aftermarket & Spares: 6–7% of sales; hydro refurbishment key driver; exploring export aftermarket growth.
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Promoter Holding: No plans to sell for next 24 months.
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Forex: Euro forwards booked for FY26; other income impact depends on quarterly FX movements.
7. Key Risks & Monitors
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US Tariffs: Final decision expected by end-August; could dictate Turkey ramp-up.
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Execution Risk in Turkey: Limited (low manpower need, prior experience), but currency stability important.
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Macro Demand Drivers: Data center & AI investments in US/EU, hydro refurbishments in India.
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Competition: Still maintains ~20% cost arbitrage vs European peers post-Turkey routing.
Verdict
TD Power delivered strong growth in Q1 with robust export order inflow and margin expansion. US tariff issue is being proactively addressed via Turkey operations, limiting revenue risk. Segment diversification (steam, gas, hydro, motors, railways) plus strong global demand drivers (especially data centers & AI) position the company for multi-year growth, with FY26 guidance likely to be upgraded.