TD Power Systems LtdQ1 FY25
TD Power Systems Ltd Q1 FY25 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Price: ₹1,255P/E: 85.8Market Cap: ₹20.5K CrSector: Electrical Equipment
Management growth scorecard
Revenue
Category 2
Margin
Category 3
Fundraise
No
Order
Yes
Capex
Yes
2 of 5 growth signals are positive.
Full analysisRevenue guidance
Category 2- →FY '26 revenue guidance is INR 1,500 crores with strong upward potential based on order inflows.
- →Clear path to INR 1,900-2,000 crores revenue in FY '27 driven by new products and export railway business.
- →Existing capacity can be optimized to achieve up to INR 2,200-2,300 crores revenue before new capacity additions are needed.
- →U.S. market expected to grow to 20-25% of total business due to private sector tech investments.
- →Export business remains backbone with 65-70% order share expected to continue.
- →Growth driven by large data center and AI farm demand, grid stabilization units, and traction motors for Europe, U.S., and CIS.
- →New larger generators (up to 40-45 MW) and motors support expansion in global markets including Middle East and India.
- →Hydro refurbishment and coal generator replacement markets offer additional growth opportunities domestically and globally.
- →Design center in U.K. to boost technology and competitiveness for larger machines.
Margin guidance
Category 3- →TD Power Systems projects steady revenue growth with a path to INR 1,900-2,000 crores by FY '27 driven by new products and export railway business.
- →FY '26 guidance is INR 1,500 crores revenue with strong upward potential as new orders and products come online.
- →EBITDA margin is sustainable around 17.5%, with profit after tax increasing 25% YoY to INR 1,530 million in FY '25.
- →Operating efficiency enhancements aim to push existing plant capacity utilization to generate revenues of around INR 2,200-2,300 crores before considering new capacity expansion.
- →Dividend payout is gradually increasing but not the priority currently, as internal accruals support growth and capacity additions.
- →Expansion into large motors, gas turbines, and traction motors for Europe, U.S., and CIS will further drive earnings.
- →Export markets, especially U.S. data centers and grid stabilization, remain key growth drivers for future profitability.
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Fundraise plans
No- →No specific plans for new fundraising through debt or equity were mentioned in the call.
- →The company currently has about INR240 crores of cash on the balance sheet.
- →TD Power Systems is focusing on heavy investments for future growth, including filling up the third plant.
- →They expect to fund future capacity expansions beyond INR2,200 crores revenue target through internal accruals.
- →Management emphasized optimizing existing capacity and conserving financial strength for upcoming investments.
- →Any new capacity additions will be planned well in advance to avoid lost opportunities, but no concrete funding route was disclosed.
- →Dividend payouts remain modest as the focus is on reinvesting for growth.
Order book
Yes- →Current order book of the Manufacturing segment: INR 13.68 billion
- → - INR 10.12 billion: regular manufacturing business
- → - INR 3.16 billion: railway business
- → - INR 0.11 billion: space and aftermarket
- → - INR 0.29 billion: Turkey business
- →Current year order book: INR 14.79 billion, up from INR 10.51 billion previous year
- →Export and deemed export orders (excluding railway) constitute 62-68% of orders
- →Guidance for FY '26 revenue: INR 1,500 crores with strong upward potential
- →Order inflow guidance for FY '26: INR 1,600 crores to INR 1,700 crores
- →Execution rate historically ~110% of order book annually, expected to continue
- →Third plant commissioning expected in H2 FY '26 to support order execution and growth
Capex plans
Yes- →TD Power Systems is commissioning a new plant with multiple sheds; equipment installation and commissioning started by May, with impact expected in H2 FY '26.
- →The company plans to optimize existing capacity and will not add new capacity until reaching approximately INR 2,200 crores revenue.
- →A design center is being set up in the U.K. with 2-3 highly qualified individuals focused on developing new large generators and motors (up to 100 MW) to compete in evolving markets, especially data centers.
- →Post the third plant filling up, the company will build cash reserves to fund further capacity expansion, planned beyond INR 2,200-2,300 crores revenue.
- →Investments to improve plant efficiency are ongoing to reach higher utilization without immediate new capital expenditure.
- →The company is also evaluating new product lines (large generators, large motors, rail traction motors) expected to drive growth into FY '27.
- →No mention of imminent inorganic acquisitions but strategic internal investments prioritized for growth.
How does TD Power Systems Ltd rank vs peers in Electrical Equipment?
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