TD Power Systems Limited — Q3 FY26 earnings call

Call held 30 Jan 2026

Management summary

TD Power Systems delivered robust financial performance in Q3 and nine months FY26, marked by significant revenue and profit growth. The company achieved record quarterly order inflows, driven by strong export demand and a healthy order book. Management provided an optimistic outlook for FY27, projecting continued growth and indicating effective strategies to manage rising commodity costs, despite an increase in Q3 factory expenses.

Highlights

  • Standalone Total Income for nine months was INR 11.94 billion, a 32% increase YoY.

  • Standalone PAT & Comprehensive Income for nine months was INR 1.54 billion, a 41% increase YoY.

  • Consolidated Total Income for nine months was INR 12.8 billion, a 36% increase YoY.

  • Consolidated PAT & Comprehensive Income for nine months was INR 1.66 billion, a 37% increase YoY.

  • Order inflow during the quarter was INR 6.56 billion, an all-time record, increasing 61% YoY.

  • Nine-month order inflow from direct and deemed exports was INR 12.05 billion, a 62% growth YoY.

  • Pending order for Generators and Motors (excluding railways) has more than doubled in the past 24 months.

Concerns

  • Factory expenses increased in Q3 due to manpower additions and shifting critical machinery.

  • Drastic increase in copper prices, necessitating renegotiation of prices with customers to pass on costs.

Key financials

2 periods

Headline

  • Cash Position
    ₹193 Cr

9M

  • Standalone Total Income
    ₹1,194 Cr
    YoY +32%
  • Standalone EBITDA
    18.3%
  • Standalone PAT
    ₹154 Cr
    YoY +41%
  • Consolidated Total Income
    ₹1,280 Cr
    YoY +36%
  • Consolidated PAT
    ₹166 Cr
    YoY +37%

What they filed

Q1 FY27: revenue up 72.0%, net profit up 72.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue306 350 348 372 452 +48%443 +27%589 +69%640 +72%
EBITDA56 61 65 69 83 +48%80 +31%98 +51%122 +77%
Net profit41 45 53 50 60 +46%56 +24%72 +36%86 +72%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Segment breakdown

Share of Order Book Value
₹1,927 Cr Total
  • Manufacturing Business (Order Book) ₹1,560 Cr 81.0%
  • Railway Business (Order Book) ₹285 Cr 14.8%
  • Turkey Business (Order Book) ₹72 Cr 3.7%
  • Spares and Aftermarket (Order Book) ₹10 Cr 0.5%

Order book

high confidence

Total value

₹1,845 Cr

as of 2025-12-31 quantified

Inflow this quarter

₹656 Cr

Composition

Mix 3 geographies
  • Exports and deemed exports (excluding railway orders) 75%
  • 9-month order inflow (Exports) 79%
  • 9-month order inflow (Domestic) 21%

Share of order book by geography· categories overlap, and sum to 175%

Pipeline

qualified rfp

New US market customer for gas turbine in engineering order stage, expected to convert to machine order in weeks with big forecast for next year.

The order book for the manufacturing segment is strong, with significant growth in order inflow, particularly from exports. The pending order for Generators and Motors has more than doubled in the last 24 months, indicating robust demand.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Investments for 2-pole generator production and motors
    However, investments will take place for 2-pole generator production and for motors, which will be a major thrust area for the company in FY '28 onwards.
  • Liquidity Cash ₹193 Cr The company continues to maintain a strong cash position.
    We continue to maintain a strong cash position of INR 1.93 billion.

Guidance & targets

Production/Sales

  • Quarterly Production and Sales Production/Sales · Q4 · High confidence INR 550-575 crores
    In Q4, we'll ramp up to INR 550 crores to INR 575 crores per quarter production and sales

    — Nikhil Kumar

  • Quarterly Production and Sales Production/Sales · Q1 onwards · High confidence around INR 600 crores
    and then move to around INR 600 crores per quarter in Q1 onwards.

    — Nikhil Kumar

Revenue

  • Total Revenue Revenue · FY26 · High confidence INR 1,800 crores
    General guidance, we will cross INR 1,800 crores this financial year

    — Nikhil Kumar

  • Total Revenue Revenue · FY27 · Medium confidence INR 2,200-plus crores
    and we give an upward guidance for FY '27 at INR 2,200-plus crores. This is a conservative guidance based on the ramp-up of the order booking that we're seeing, which is around INR 575 crores to INR 600 crores per quarter, we see an extremely high probability to increase our guidance further.

    — Nikhil Kumar

  • Motor Business Top Line Revenue · This financial year · High confidence around INR 150 crores
    This year, we will still be on track to achieve around INR 150 crores top line.

    — Nikhil Kumar

  • Peak Revenue (before FY28 bulk investments) Revenue · Before FY28 · Medium confidence INR 2,600-2,800 crores
    I think somewhere between INR 2,600 crores and INR 2,800 crores, we will not make any further bulk investments.

    — Nikhil Kumar

Growth

  • India Steam Turbine Market Growth Growth · Ongoing · High confidence 10-12%
    And overall, we expect 10% to 12% growth in steam turbine market.

    — Nikhil Kumar

  • Motor Business Growth Growth · Annual · Medium confidence 10-15%
    It will grow, but it is not going to grow at some exceptional rate, maybe 10%, 15% per year.

    — Nikhil Kumar

Capacity

  • Bulk Capacity Additions Capacity · up to FY '28 · High confidence No bulk capacity additions
    we will not add bulk capacity for sales up to FY '28.

    — Nikhil Kumar

Profitability

  • Gross Margin Profitability · Ongoing · High confidence 35%
    Yes.

    — Nikhil Kumar

What to watch in Q4 FY26

Q4 Production and Sales Ramp-up

next quarter (Q4 FY26)
Current INR 450 crores/quarter (Q3)
Target INR 550-575 crores/quarter

Why it matters

Verifies the effectiveness of new plant commissioning and capacity utilization ramp-up, crucial for meeting FY26 revenue targets.

In Q4, we'll ramp up to INR 550 crores to INR 575 crores per quarter production and sales

Risks & concerns

  • Commodity price volatility (copper)

    medium

    Copper prices have gone up drastically, but management is renegotiating prices with customers to pass on cost increases.

    Management acknowledged

  • Increased factory expenses

    low

    Factory expenses increased in Q3 due to manpower additions and shifting critical machinery, with an expectation of another 5% increase in Q4.

    Management acknowledged

Q&A highlights

6 direct
Impact of Chinese equipment relaxation on domestic market Direct
In the captive power plant business up to 100 megawatts, we don't see any impact of any Chinese equipment coming into the country. They can come into the country even now.

Clarifies that potential relaxation for Chinese equipment imports will not significantly impact TDPS's core domestic market segments.

Asked by Ganeshram

Mitigation of commodity price increases (copper) on margins Direct
We are renegotiating all our prices with all our customers, and we will ensure that we pass on the price increases or cost increases to our customers. We have absolutely no problem in getting the price increases to what we need.

Addresses concerns about margin pressure from rising raw material costs, indicating a clear strategy to pass on costs to customers.

Asked by Ganeshram

Impact of US AI investment slowdown on power sector demand Direct
Absolutely not. Absolutely not. I don't know how else to answer this question. ... I don't see any slowdown in any Al investments taking place.

Reassures investors that the strong demand from data centers and related power infrastructure, driven by AI investments, remains robust and is not slowing down.

Asked by Kiran

FX hedging strategy and its impact on margins Direct
We took a conscious decision to stop hedging about six months ago because we were seeing a rapid depreciation of the Indian rupee and we decided to stop hedging and that was a correct decision because we locked in rates that are the spot rates have now gone way below that. So, the correct decision that we took to stop and I think we're going to see the big benefit coming in from that.

Explains a strategic decision regarding currency hedging that is expected to positively impact margins due to INR depreciation.

Asked by Ganeshram

Peak revenue potential with current capacity and future investments Direct
I think somewhere between INR 2,600 crores and INR 2,800 crores, we will not make any further bulk investments. And then after that, around next year this time, we're going to be looking at what's going to be happening in FY '29 and FY '30.

Provides a clear revenue ceiling for the current capacity and outlines the timeline for future capacity expansion decisions, offering long-term visibility.

Asked by Ankur Kumar

Domestic hydro segment demand drivers and sustainability Direct
And there is a good visibility at least for the next two, three years in the hydro segment because these projects tend to be long gestation projects and there are a large number of inquiries in the pipeline. I'm not worried about the sustainability of the hydro order inflow at all.

Highlights a new growth area (hydro refurbishment) with good visibility, diversifying the company's revenue streams.

Asked by Garvit Goyal

2 min read 6 chapters

Detailed narrative

Strong Financial Performance and Order Book Growth

TD Power Systems reported a robust Q3 and nine months FY26. Standalone total income for nine months grew 32% YoY to INR 11.94 billion, with PAT and comprehensive income increasing 41% YoY to INR 1.54 billion. Consolidated figures also showed strong growth, with total income at INR 12.8 billion (up 36% YoY) and PAT at INR 1.66 billion (up 37% YoY). The company's cash position remains strong at INR 1.93 billion, underpinning its financial health.

Record Order Inflow and Export Dominance

The quarter saw an all-time record order inflow of INR 6.56 billion, marking a 61% increase YoY. For the nine-month period, order inflow from direct and deemed exports surged 62% YoY to INR 12.05 billion. Exports constitute a significant portion, accounting for 79% of the nine-month order inflow. The total manufacturing segment order book stands at INR 18.45 billion, with 75% of exports and deemed exports (excluding railway orders) on a pending order basis, demonstrating strong future revenue visibility.

Capacity Expansion and Production Ramp-up

The company's third plant became operational on December 18, 2025, though its impact on sales is yet to be fully realized. Management plans to ramp up production and sales to INR 550-575 crores per quarter in Q4, further increasing to around INR 600 crores per quarter from Q1 FY27 onwards. While no bulk capacity additions are planned until FY28, investments will be made in 2-pole generator production and motors, which are identified as major thrust areas from FY28.

Strategic Management of Costs and FX Volatility

Factory expenses increased in Q3 due to manpower additions and machinery relocation, with an anticipated further 5% increase in Q4. To counter the drastic rise in copper prices, the company is actively renegotiating prices with customers to pass on cost increases. Furthermore, a strategic decision to stop FX hedging six months ago, amidst rapid INR depreciation, is expected to yield significant margin benefits in Q4 and Q1 FY27, as spot rates are now below previously locked-in rates.

Segmental Growth and Market Outlook

The gas turbine and gas engine segments are experiencing the strongest growth, driven by high demand in Europe and the US, particularly from data centers shifting to captive power. The India steam turbine market is expected to grow 10-12%, with a strong export pipeline. The hydro segment in India is also opening up, with good visibility for the next 2-3 years, and the motor business is projected to grow 10-15% annually, aiming for INR 150 crores top line this year.

Conservative Yet Optimistic Guidance

TD Power Systems expects to cross INR 1,800 crores in revenue for FY26. For FY27, an upward guidance of INR 2,200-plus crores has been provided, which management considers conservative, with a high probability of further increases. The company anticipates a peak revenue of INR 2,600-2,800 crores with its current capacity before any further bulk investments post-FY28, and expects to sustain a gross margin of 35%.

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