TD Power Systems

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.

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.

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.

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.

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.

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%.