That this conference is being recorded. I now hand the conference over to Ms. Renu Baid from IIFL Securities Limited. Thank you, and over to you, ma'am. Very good evening, ladies and gentlemen. Today we have with us the management team of CG Power and Industrial Solutions with us, to discuss the third quarter FY 24 earnings call. From the management team, we have Mr. N. Srinivasan, Managing Director, Mr. Susheel Todi, Chief Financial Officer, Mr. Ramesh Kumar, President, Industrial Division, Mr. Mukul Srivastava, President, Power Systems, Mr. Ajay Jain, Vice President, Transformer Division, and Mr. Chidambaram Balakrishnan, Vice President, Railway Division. So without taking much time, I now hand over the floor to Mr. N. Srinivasan for his opening comments, thereafter which we can start with the Q&A. Thank you, and over to you, sir. Yeah. So thank you, Renu. Good evening, ladies and gentlemen. Let me first extend a warm welcome to you all for the Q3 FY 2024 earnings call. I am Natarajan Srinivasan, Managing Director of the company. I would like to introduce my colleagues who are with me on this call: Ramesh Kumar, President, Industrial Division; Mukul Srivastava, President, Industrial Business; Ajay Jain, Vice President, Transformer Business; Chidambaram Balakrishnan, Vice President, Railways; Susheel Todi, CFO. Company performance. Q3 FY 2023-2024 performance, sales grew year-on-year by 13%, and profit after tax, before exceptional items, grew by 13%. For the nine months ended 31st December 2023, sales grew year-on-year by 15% and profit after tax, before exceptional items, grew by 26%. Aggregate sales for the quarter were higher at INR 1,860 crores, recording a growth of 13% year-on-year. Profit before tax, before exceptional item, was at INR 282 crores, 15.1% of sales as against INR 274 crores, 16.6% of sales last year in Q3 of FY 2023. Return on capital employed annualized for the quarter was at 38%. Free cash flow generated for the quarter was INR 246 crores. Unexecuted order book as on 31/12/2023 was 34% higher year-on-year at INR 5,556 crores compared to INR 4,136 crores as of 31st December 2022. Segment-wise performance. Industrial systems: aggregate sales for the quarter were higher at INR 1,214 crores, recording a growth of 5% year-on-year. Profit before interest and tax was at INR 169 crores, as against INR 213 crores in Q3 of FY 2023. During the quarter, the demand for motors led to a price war, with everyone trying to sell their volume, poaching the customers to retain their market share. The company took a strategic call to sell equally aggressively to retain the customers and protect itself. This had the effect of dropping the margins on the one hand and a market share gain on the other. Unexecuted order book as of 31st December 2023 was 9% higher year-on-year at INR 1,982 crore vis-à-vis INR 1,824 crore as of 31/12/ 2022. Power Systems: aggregate sales for the quarter were higher at INR 646 crore, recording a growth of 34% year-on-year. PBIT was at INR 99 crore, as against INR 57 crore in Q3 of FY 2023. So the profit PBIT to sales was 15.3%, as against 11.7% in Q3 of FY 2023. Margins were higher year-on-year on account of execution of export orders with better margins, favorable product mix, and better operating leverage. Unexecuted order book as on 31/12/ 2023 was 55% higher year-on-year at INR 3,574 crores, as against INR 2,312 crores as of 31/12/ 2022. Consolidated results include the performance of operating subsidiaries in Sweden, Germany, and Netherlands, the Drives and Automation, Europe, CG Adhesive Products, India, and other non-operating and holding subsidiaries. Aggregate sales for the quarter were higher at INR 1,979 crores, recording a growth of 13% year-on-year. PBT was at INR 264 crores in Q3 of FY 2024, as against INR 285 crores in Q3 of FY 2023, and INR 303 crores in Q3 of FY 2024. Unexecuted order book of Drives and Automation, Europe as on 31/12/ 2023 was 4% higher year-on-year at EUR 17.2 million, as against EUR 16.5 million as of 31/12/ 2022. Key events in this quarter, in Q3: The company had filed an application with the Ministry of Electronics and Information Technology, Government of India, seeking approval to set up an outsourced semiconductor assembly test, OSAT, facility for the... and the grant of subsidy for the said project. The estimated investment on the project over a period of five years is $791 million, and the same is expected to be funded by a combination of subsidy, equity, contribution, and debt as required. The application preferred has been pending consideration of Government of India. The company signed a term sheet with K Raheja Group for the joint development of the company's property, CG House, situated on Annie Besant Road, Worli, Mumbai. Necessary approvals from the authority are being sought for the redevelopment. During the quarter, the company received orders from the National Company Law Tribunal, sanctioning dissolution of the company's wholly owned subsidiary, CG Power Solutions Limited. The company has given effect to the said order in the account. The accounts from the same is reflected in profit and loss account under discontinued operation. This is yet another legacy issue that is getting, that has been resolved. Between myself and my colleagues, we'll be happy to answer the questions. So on the whole, I think we had a good quarter. But I must also tell you this, you know, there has been a deferment of revenue of up to the tune of about INR 35 crore in the power systems business because of some inspection issues. Inspection got delayed, and then the, on 31st we could not dispatch, maybe on the next day also we could dispatch actually. So the, anyway, this, the revenue recognition on this could not be booked as revenue for this quarter or this month, at the December and then this quarter. And this had a profit implication of about INR 16-INR 17 crore. Similarly, there is a one-time expenditure on account of a transformer replacement, you know, for the pending insurance claim, we have booked a provision of about INR 10 crore. This is also one time. So these had, but for these our profit would have crossed about INR 300 crore for this quarter. We're happy to answer questions. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Ankur Sharma from HDFC Life. Please go ahead. Yeah. Hi, sir, good evening. Thanks, as always, for your time. Just a question, starting off on some of the motors business, you know, where you kind of highlighted maybe, you know, the demand environment and possible price war. So I'm just trying to understand, you know, versus when we spoke last quarter, you know, where are you seeing this weakness? Is it broad-based? Is it any specific segment which is kind of slowed down sharply? Is it, you know, government-driven orders? Just some color there. And when do you think you could start seeing some pickup also on this side? So there are two aspects to this question. One is, you know, in the motor, you know, there is a large industrial motors, and there is LT Motors, then there is HT. Sure. The problem, actually, the weak demand which I had mentioned relates to LT Motors. Mm. So even in the last quarter earnings call, in the television interview, I had mentioned that- Mm ... the stocking by the dealers, because there is a fear of inventory getting reduced because of weak demand, et cetera. The dealers have been stocking less, therefore- Yeah ... this will reflect for next couple of quarters. So in this quarter, what has happened because of the lesser demand and then aggressive sales by some of the small players and competition, who, I mean, who doesn't want actually the sales to go down, and therefore price actually took a beating. Mm-hmm. We also actually took a call. We could have remained without selling, and then, but we thought we will sell, and then strategy calls we take, we took, we took actually. Mm. On account of which, the margins and the MSR actually have not been as per, have not been normalized as it used to be in the earlier quarters. So, I think I expect probably the next quarter is generally, you know, this is normally a good quarter where everyone wants to achieve their budget sales, et cetera. Mm-hmm. Mm. Mm. Better than Q3 and Q4. Maybe post-election, things should become completely normal. Okay. Okay. And just to kind of clarify, the weakness is not as much on the HT Motor side, right? Which typically goes into larger, you know, cement, steel, et cetera. There, demand is better. Is that right? Correct. Correct. Okay, fair. And, and, okay, that's, that's good to know. And secondly, on the rail side as well, any update there? Because I remember we were looking to tie up with a few, rather to tie up on the, propulsion side for the Vande Bharat train set. Any, any update there? So, propulsion actually, you know, we already are having an arrangement with the for technology transfer. We are already working to one company in Korea. Okay. Propulsion probably will be self-sufficient by, you know, shortly, in about maybe about six months' time. Other than that, no other tie-ups happened. Got that. Okay. And just one last one on the OSAT piece, and congratulations on, you know, the group and your entry into this, you know, segment. Anything more you can share? So, you know, while we did read about the announcement on the exchanges, you know, which you plan to do, but any further details you can provide, you know, who have you tied up with or you're trying to tie up with, you know, the location of the plant, vendors? Anything more, which you can help us with? I think at this point of time, nothing has been firmed up, and all are under discussion. So we are under some kind of a confidentiality clause with respect... We are talking to, obviously, some foreign companies which are listed, which have also, also have their own regulatory requirements. So they need to get back, they need to get their internal approvals in place and then inform, and be ready at some point of time when we'll be able to share the... Unfortunately, today, we'll not be able to share much details. Anyway, you know, we have only submitted an application. Mm-hmm. The government will have to clear the application. Right. Thereafter, only the effective steps can be taken. So the moment we are able to have clearances from the- Mm ... partners with whom we are talking, then we'll be able to share more details. Understood. Got that. Great, sir. Thanks so much, and all the best. Thank you. Thank you. The next question is from the line of Nitin Arora from Axis Mutual Funds. Please go ahead. Hi, sir. Thank you for taking my question. You know, just continuing what Ankur was asking, let's say on the power side, the order intake and the order book is very strong. Can you touch base? Is it just, also you are seeing some weakness here because of the pre-election, or this is something the bidding is still very, active and bidding is still very strong here? That's my first question. And second, with respect to the strategic call, and you have been highlighting this to, I think on every call that, you know, pricing is something which can reverse any quarter, and you also don't know which quarter it will reverse. But here you think the reversion is in the base now from this quarter, or because the slowness might happen, as you said, post-election things should normalize. Have there been slowness just related to election, or you're seeing the clients also cutting budgets, the demand is a problem? How one should read this? That would be helpful. So I will answer the second question. First question, I want to understand little better actually. Second question, so we, so based on, we have extensive discussions with all top dealers in various locations. In October, November, our entire team, including me, actually visited all the markets and then held on discussions with dealers. So LT Motors, actually a large part of the sales takes place through dealers, through retail. So we don't get an impression that, you know, the budgets, they, everybody has slashed their budget and there is no underlying demand, et cetera. Underlying demand is there, but it is taking piecemeal. You know, normally, the dealer stocks for three months and then sales takes place immediately, and that push is not there. So a little cautiousness is there because the price, there is a fear of price getting lower or inventory getting stuck because of this. So we believe that this may be a one-off thing, and probably the worst is over. Even I feel the realizations will be better for the next quarter. Your inventory versus your peers, or let's say, in the market, how one should read this LT Motors inventory of yours in the market? Has it become lean now or is it still quite high? Our inventory, we have not, our inventory is normal. As we normally we keep the same inventory level, but peers inventory, we really don't know. What's your first question? Sir, on the power side, can you throw some light? I mean, because, this momentum has been still continuing a lot, and in this quarter also, order intake has been, pretty strong, margins have been pretty strong. Can you throw some light over the next, like, six to 12 months? How do you see this segment panning out? So I think, you know, the inquiries on hand is an indication. Yeah. I think the inquiries in transformer are close to about INR 10,000 crore, I said earlier. Mm-hmm. So, switchgear also there's a good amount of inquiry. I think I don't see any issue with respect to demand. It's a question of supply and delivery. So that means your new capacity itself will get pre-booked in a way once it comes on stream? Definitely. Definitely. Got it, sir. Thank you very much. I'll come back in with you, sir. Thanks a lot. Thank you. The next question is from the line of Rahul Gajare from Haitong Securities India Private Limited. Please go ahead. Good evening, gentlemen, and thanks for the opportunity. Sir, can you share the volume growth that you... On the transformer side? I'm sorry to interrupt. Mr. Gajare, we had lost your audio in between, so could you please repeat your question? Yeah. Yeah, Yeah, I will repeat, yeah. So, sir, my question is, can you share the volume growth, mainly in the industrial motor side and the power transformer? That's the first question. Power transformer, we cannot give you the volume growth. We have already stated the numbers, and then orders on hand. Ramesh, you can tell the volume growth on industrial motors. See the, as whatever IEEMA is declared, IEEMA is declared up to October, in, LT Motors, our growth is 29% in volume growth, and, in HT we are growing almost 33%, and fractional horsepower model also 19%. So this is, when compared to the total IEEMA growth, it's much, much higher. For example, AC motors IEEMA growth is just 10.8%, HT motors is, 1.3%, below actually what they have regarded, and fractional horsepower is, -24%. So when compared to the industry growth, we, our growths are much, much higher, actually. Sir, and this, this is basically October data that you are sharing or no? Month of October. Actually, month of October, because generally there's about one, two months lag in declaring the data, collecting the data- Okay. and data by IEEMA. Okay. So I don't see much difference going forward also because our sales is better in, better in, November and December when compared to October. Okay. So now the reason for that question was, you know, given that we've seen, you know, a limited traction and, in the revenue growth in this particular quarter, and as Mr. Natarajan also said, you know, that there is, price pressure on the pricing. That is the reason why I was thinking that, while the volume growth might be there, is there a, I mean, amount... Okay, fine. So that, this is the volume growth you think is there in November and December also. And can you share your, what is the market share that you have in the motors business right now? LT, we have 38.8%, and FHP we have 37%, and HT motors we are at 19%. This one published, no? Yeah, published data. 38%? Yeah, 38% is published data. Published, yeah? Yeah, 38.8%... Yeah. So my second question is, you know, this INR 550 crore of discontinued operation gains that you have booked in this particular quarter, is it fair to assume that all of this is coming from CG Power Solutions only, or there is something else also? And after this, what will be the cash balance at the end of third quarter? So this is the entire write back is coming from CG Power Solutions. There nothing is pending now, CG Power Solutions. We just closed down that entity now as per the NCLT orders. So cash balance at the end of the quarter is around INR 1,300 crore. It comes from solutions there. Okay. Sir, are there more entities in the process of dissolution? And if yes, could there be a substantial gain that one can expect from such? So the major, major entity, the, you know, major issue which was there from CG Power Solutions, that's where, you know, this gain has come. Now, there are no major entities which are left now. You can see in that segment reporting where we are reporting separately the discontinued operation, assets and liabilities. Right. Okay. Sir, and my last question is on the power segment. We've seen an increase in the capital employed in the power segment. Is it possible you can break this, item, you know, whatever content that you can provide? And is there any issue or delay in collections? That's the last question I have got. Thank you. No, you have to look at the ROC of the power system. So if you look at the ROC, we, we are well within that, better than the last quarter, if you look at it. Well, in terms of- Look at the ROCE number, right? The Return on Capital Employed. Yeah, yeah, I thought as much. You know, that this is basically the work in progress that is going on with respect to your execution. There are no delays in collection for sure? Okay, correct. Okay, fine. Thank you very much, and all the very best. Thank you. Thank you. The next question is from the line of Suraj Malu, from Catamaran. Please go ahead. Hello, sir. Thank you for the opportunity. My question is on the capacity utilization. So, could you give a sense of how our capacity utilization is across the board, both on the power sector as well as on the industrial motors side? So I think, if you look at the motor side, we are selling more, so we are at around 80-85%. In case of the transformers, the volumes are also increasing in that business as well, so we are testing around 85%. Right. And the new capacity which you had announced last quarter, how will... Would that come up in a phased manner, or is there going to be a delay before those capacities come online? So, for the transformer and switchgear, you know, they will come accepting. In switchgear, there are a number of projects there. But let me take transformer, transformer actually will be commissioned during this financial year, maybe in the last quarter of the current financial year. In switchgear, I think, you know, a couple of projects will go beyond the current financial year. Motors actually will do it in stages, one in 2024, 2025, and some in 2025, 2026. Understood. Thank you. That's all from my side. Thank you. The next question is from the line of Ravi Swaminathan from Avendus Spark. Please go ahead. Thanks for taking my question. My question is with respect to the supply in terms of motors. Have you seen over the past quarter or two more number of motor manufacturers coming into the market, looking at the positive demand which was there since COVID, and that had resulted in higher competition? Or is it that it's just the existing players who had been more aggressive in terms of pricing? So, the new entrants are still not made a big, you know, entry into the market. They're just working on it. It is the existing and especially tier two, you know, small players where they have grown during the COVID time when CG was not in a good, this one. So their volumes have gone up. Now, since the market has degrown, so they're trying to manage to retain their volumes, so they had to drop in the price. It is more of the existing players than the new players. Got it. And, in terms of pricing of LT Motor, probably in the past two, three months, that is October to December, how much would it have dropped? And was it just the drop was because of the competitive pricing or your copper prices falling off a bit and that also leading to pricing decline? It is a combination, actually. So- Mm. Exactly, it will be very difficult to say how much it has dropped, but, combination of, raw material drop, as well as some additional drop because of the, competition. Got it. The drop would have been year-over-year, something like a high single digit number or probably lesser or higher? Yeah, yeah, it's high single digit number. Understood. Understood. Thanks a lot, sir. Thank you. The next question is from the line of, Bhoomika Nair from DAM Capital. Please go ahead. Yeah, good evening, sir, and thanks for giving me an opportunity. Most of my questions have been answered, but just, you know, you made a comment that hopefully fourth quarter is typically better, and we can see an improvement in terms of both demand as also pricing, as we move ahead. Could there be, in view of the upcoming elections, a little bit of typical, you know, little bit of a weakness into the next two quarters and then normalizing post that? ... So that is a hope and that is a belief. Hello, Bhoomika, how are you? Good, sir. Good, sir. Yes. So I think, you know, my, I've been constantly in touch with my team, and today morning, actually, they have told me that the things are looking up, and then definitely what I said earlier, the realization is better than, will be better next quarter, is based on the feedback I received. Okay. And as our capacity comes up, right, in phases over the next two years, and is there—I mean, even the peer set kind of expands capacity, could there be that, you know, that, you know, that margins may not really come back to the earlier levels that we were at? Could there be risk to that number as demand normalizes into, say, down the line, two, three quarters? So just based on one quarter, one-off thing, I don't want to come to that conclusion. If you see the company as a whole also, YTD, if you see YTD nine months, our margins are even better than the EBITDA margin for YTD 16.1%, against the 2022-2023 EBITDA margin of 15.4% for the company as a whole. If you take similarly as industrial, so YTD margin is 15.3%, last year was 16.4%, year before was 12.7%, then PBT to sales. EBITDA margin, if you take for industrial, is 15.9%, compared to last year was 17.4%, year before was 13.5%. Last year, as you know, was an exceptional year. We got 19% margin in one quarter, et cetera, which may not get repeated. I think I would see, probably in this quarter itself, if you had held on to not to sell and then we just sell them. See, we are a volume player. When I sell more, the price will further decline. But, you know, but if I don't sell, then, you know, my market share may, can go up. In the weak market, I have increased my market share from 35%-38%. Therefore, I would think that this is just a one-off thing. There are several levers available for you to keep profitability and improve margins, and then keep the way that you have been performing. We will pull all the levers actually and do our best to retain margins, sir. Sure, sir. This is very helpful. So just on railways, if you can just give some color on how the revenues are, what the backlog is looking like, and what are we seeing the growth trajectory as we move ahead? If you can just comment on that. I will ask Mr. Chidambaram to respond. I think the going has never been as good as is now in respect of order booking, et cetera. Mr. Chidambaram, could you just answer this question? Thank you, sir. Thank you. We are into, primarily into the rotating machines, motors, which is different from the other motors. These are traction motors, which are used for pulling, and the control system, which goes with the locomotives. So to this year, generally, we are booking around 20%, on motors and also on the propulsion of the total order. This year, our order, our order books would be, almost 68% higher than the order books we had in April 2023. Okay. So, could it be possible to share the absolute number of revenues in the nine months and order backlog as we stand today? Yeah. If I say, if I say we started in March 2023 with an order backlog of INR 800 crore, we would start April 2024 with an order backlog of INR 1,400+ crore. Oh, okay. Okay. So that's quite an improvement in there. Yeah. This after completing the revenue of INR 1,200 crores, INR 1,200+ crores. We have completed INR 400 crore, and we will be carrying forward INR 1,400 crore. Wow! Okay, okay. So there is a lot of traction in terms of, the activity. Any, you know, large orders which are there in the pipeline that we are bidding for and, you know, are hopeful of getting any quantum that one can define, which can possibly get finalized? So, Bhoomika, actually, we can, we can disclose only when we get the orders, not on hopes. Sure, sir. Yeah. Sure, sure. Great, sir. This answers my question. Thank you very much and all the best. Welcome. Yeah. Thank you, sir. Thank you, ma'am. Thank you. The next question is from the line of Amit Mahawar from UBS. Please go ahead. Hi, sir, good evening. I just have one question on exports. Right, so nine months, how much have we done on new orders in export across motors and trans, you know, power systems? And FY 2025, if you can throw some color on, you know, how are you looking at exports growth between the two segments? Thank you. Yeah. So do you have the current figure for the entire? So we'll come back to you with the figure actually. The exports, we are taking steps, especially on the motor side, to increase our share of exports next year. We are appointing, we are in the process of appointing people, appointing dealers, stockists, et cetera. So I think many of the moves that we are taking now are expected to bear fruit by second half of next financial year. So far, I think... How much? 85% growth in exports in motors. What was the absolute amount? Absolute amount is, We earned about INR 250 crore totally, 100, 100+ in the—for the full year, we have done almost around INR 400 crore+, sir, at company level. So all put together. So we have done about INR 400 crore so far in exports between all the three divisions. Fair. Fair. So INR 300 crore last year has moved to INR 400 crore YTD- Yeah. If I'm not wrong. Yeah. And, yeah, second part of maybe my question was more on the transmission side, globally. We're getting a color, a lot of color about capacity constraint in power transmission equipment, and CG Power has a very significant cost advantage on, you know, transmission range. So FY 2025, what kind of growth or business can we look at, and maybe the power division people can help me? Thank you, sir. So I think you know, we, as you know, we are also expanding our capacities both in transformer and switchgear. But you know, these capacities will not be—increased capacities will be available only by the end of the year or the last quarter of the year. Therefore, we may not be able to get a full advantage of this. Nevertheless, I think we can target about 25% minimum growth on the top line in these two lines, both transformer and switchgear, power as a whole. Very helpful. But generally, unlike motors, in power, the orders are relatively medium cycle, so clients can always give you orders if you are ready to deliver beyond six, eight months. So I was just hoping that will help us. So we are, I mean, we, we agree with you. Some of the orders we got recently, we brought back some big orders also. We are working hard to just see how to complete this expansion fast. We are also looking at other opportunities to expand our operations. Got it, sir. Thank you and good luck to the entire team. Thank you. Thank you. you. The next question is from the line of Subhadip Mitra from Nuvama. Please go ahead. Good afternoon, sir, and thank you for the opportunity. First question is with regard to the railway business, where you did mention that you are looking at a tie-up with a Korean partner on the propulsion system. Am I right in understanding that once this tie-up is in place, you will be able to bid as a propulsion partner, and you may only require a partner on the wagon side? No, so, Chidambaram, can you answer this question? There will be, this is not that easy, it will be more, because you also need an experience for your... For example, if you want to participate in a tender, it is not enough you know things. You must have a demonstrated track record of having built a train and having run a train like that. Therefore, without a partner for bidding, actually it will be difficult to enter the tender. Understood. So any partnerships that are being thought of on that line as well, beyond the propulsion side? So I think that while there have been a lot of efforts, nothing has come to a stage where we'll be able to say anything big there. So, everybody is probably waiting in the wings, and therefore, a lot of efforts are going on. Okay, sir. Understood. Understood. And this will be for the propulsion system, both for locomotives as well as train sets? Train sets, mainly. Mainly on the train sets, on IEEMA sets. Okay. Secondly- We have the technology. I'm sorry, could you repeat that? Locomotive, we already have the technology. If you break the technology in two parts, the technology which fits on board and technology which is underslung, the technology we will have by March, April next year would be underslung. We already have the onboard technology for locomotives. Understood. And for the train sets, where the TCMS, et cetera, is concerned, that's where you will probably need a partner, right? No, we are buying the technology itself. So we will be manufacturing ourselves with our so-called own technology, brought out from a Korean partner. I see. Okay. Perfect. That, that answers my question. Secondly, on the power segment, now, clearly this has been a lower size as compared to the industrial piece, but with the way we are seeing high voltage transmission CapEx coming up at the macro level in India, and what we hear from Power Grid, et cetera, is that there is an 18-month waiting period for high voltage transformers. And, and there are some players who are even ordering out their high voltage transformers in anticipation of order wins. So are you expecting then that the inquiries and the potential order wins on the high voltage transformer side can at least start seeing a pickup, even though your own CapEx might take some time to come? So, Ajay? Yes, sir. Thanks for this opportunity. Yes, we see a lot of traction in this. The projects are already started coming in, and yes, we have booked some orders, anticipating the expansion in the capacity for delivery beyond 12 months also. So these projects are already coming now for this year. Understood. So in your opinion, how large can this market size be on an annual basis? We are expecting a CAGR of around 10%-20% in this. On the high voltage transformer side? Right. Okay. Okay. And for the rest of the business, so overall, if I have to look at the power segment, so what I understand is, the largest chunk of your business, probably going ahead, power and railways can overtake the industrial piece. So just wanted to get some thoughts from you that over the next, let's say, two to three years, how do you see both these, high growth pieces of power and railways panning out, and how large a piece can they become in the overall pie? Hello, can you repeat the question, please? Yeah. Sir, can you hear me now? Yeah. Yeah, yeah. So my question was that while industrials has been the larger chunk of your business, I think going ahead, it is the power and the railways piece which are probably going to see higher growth, at least based on the macro tailwinds that we are seeing. So in your opinion, can we see power plus railways becoming a larger chunk of your overall business, let's say, over the next two to three years or four years, vis-à-vis your normal, let's say, low voltage motors and the rest of the industry? So if you ask me comparing with industrial, I mean, motors means definitely motors also will grow. We have, as you know, we are doubling our capacity for motors. So once we start exporting and then operating the enhanced capacity, we are able to operate, motors also will grow much faster than the other two businesses. Okay. And the expected CAGR in motors would be 20%+? 20%, and then with the power business, maybe because the base is low, and then we are only just growing 25% in those businesses. So motors around 20%, and you're saying power can be 25% or thereabout? Correct. Okay. Lastly, on margins. Now, naturally, we've seen, you know, spectacular numbers in terms of margins versus peers. So are we anticipating that with, you know, higher top line, better operating leverage, can we go beyond this, let's say, 15% kind of barrier and look at a higher number on margins on an overall basis? So I think this is a stable level, anything higher... I think as I said earlier, margins are a combination of input costs, selling price, product mix, all the three put together. So, and then plus, there are internal efficiencies, what we try to get because of procurement efficiency or lean manufacturing. So I think, you know, we have come from a low level, we have come to about 15%, 15%, 15.5%. So I think, I think 15%-16% looks to me a stable range. Understood, sir. That answers my question. Thank you so much. Thank you. The next question is from the line of Harshit Patel from Equirus Securities. Please go ahead. Thank you very much for the opportunity, sir. I have just one question. You have highlighted about the increasing opportunities in the high voltage equipment space. So have we created a roadmap to develop a 765 kV GIS solution? Because we see very heightened tendering activities happening in this particular space. So either on our own or through a technology partner, just the way you have done for this propulsion systems, as you have mentioned, I believe we are already working towards that 440 kV GIS. You have mentioned that you plan to commercialize that in FY 2025. So is that on track and our plans on 765 kV? Jay? Sir, Mukul, Mukul. Yes, please. See, exactly, sir, our 400 kV GIS project development is on track. As of now, we are not targeting 765 kV because, the normal lead time for a product like 765 kV can be anywhere three to four years. So as of now, we have not, we are not targeting that part. Understood, sir. Thank you very much for answering my question. Thank you. The next question is from the line of Akash from Dalal & Broacha Stock Broking. Please go ahead. Hello, sir. Yeah. Hello? Yes. Hello, please go on. Hello? Yes. Yeah, sir. Yeah, thanks for the opportunity. So, my question was, basically, in spite of our capacity utilizations staying close to our peak levels, why are our margins going down, especially in the power segment of the business? The industrial system, we understood that we are trying to protect our market share there, but any guidance on the power side? Where are margins going down? On the power system side. Transformers. No, if you look at margins, against the last year quarter, we were at 11.7%, and this quarter we are at 15.3%. EBITDA to sales, if you see our press release. So from 11.7%, it is 15.3%. EBITDA actually from 13.5%, went up to 16.6%. No, quarter-on-quarter basis, sir. Huh? Yeah, quarter-over-quarter only I'm saying. Quarter-over-quarter, that's all. So last year was, so how much? 17.9% to 16.6%. You see, we can't just ideally compare, you know, it depends on product mix, input cost, what prevailed last year, we cannot say like that. I think this power actually is a very decent margin, and I'm, generally, I've compared, the, whatever the... I, I'm not able to see many other companies having this kind of margin. I looked at, numbers of other companies, players also. Exactly, we cannot, each order will be different. In a, in a transformer or a switchgear, et cetera, each order, pricing will be different because we're all tender driven. Prices are common for here. I don't get an extra price. Prices are because if we compete on tender, we get the price. How margins I get is how I efficiently manage my resources, what are my internal efficiencies, how do I procure? All these things will constitute margins here. Understood, sir. So any future guidance for the coming quarters, will our margins increase or will more or less remain at the same level? We don't give guidance to that minute level. Margins, you know, while we don't expect any margins to come down, but generally, we don't give guidance on margins. Okay, sir. Yeah. Thank you. The next question is from the line of Vikas Srivastav from RBC Financial Services. Please go ahead. ... Yeah, question was if you can throw some light on the consumer business, outsourcing new products, new tech, whatever. I know you're not in a position to share too much information, but whatever you can share on the consumer products. No, we are definitely working on these products, and we have launched geysers, even some new products in this season also in October, and we have done very well with respect to heaters. So, our focus is there, and even in pumps also, we are launching very soon for agriculture and industrial pumps, that is small range of industrial pumps. So our focus is there, we are steadily growing on this product. By when do you think in the next two, three, four years it will become material enough to be reporting separately, segment-wise? When do you think, do you think there's a possibility there? So, so one thing, you know, three, four years looks a, a good time for our whatever you said. But if, fortunately, if unfortunately, if other businesses grow bigger, and then, you know, then that 10% threshold which is required for separate reporting, we may miss. But anyway, our intention is to grow this business over the time frame which you had indicated. Any particular regions or products which is information in the public domain, which you could share with us now? In terms of Pan India, South, North, East, West, and any products which is information which is already available in the public domain. You are asking about our penetration? Yeah, penetration, geographical as well as product in various parts of the- We have taken a path for complete Pan India because, you know, we are, as a motor industry, we are well-known in the industry and, our products were there in the market prior to 2015. So, it is... We have not taken a route of, you know, because generally what happens if somebody who's newly launching the product, then it is they take some particular region and enter and test it and all. But we have not done that. We have taken the complete end because it's a re-entry for us. So we are Pan India, we are penetrating for both the products. The route to market is fairly well established now. Is there any confusion in the market with the brand name of another competitor in the market on this, or is it, or what are you facing there? Not to our knowledge. There is no confusion, not to our knowledge. The route to market infrastructure is in place, in terms of do you expect any major investments here going forward? As of now, fairly well, well placed, but if we have to grow much faster than what we are doing, and we, we will have to do that and which we are working on it. All right. Thank you. Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. Should you have a follow-up question, we would request that you rejoin the queue. The next question is from the line of Suraj Malu from Catamaran. Please go ahead. I think Mr. Malu, your line is unmuted. You can please proceed with your question. Hi, sir. Can you please let us know the order intake, segment-wise for this quarter? We don't provide the order intake. We have got the unexecuted order book, as on the last day we have already given. Other than that, we don't share details. Okay. Thank you. Thank you. The next question is from the line of Mohit Kumar from ICICI Securities. Please go ahead. Yeah, good evening, sir, thanks for the opportunity. My first question is, can you participate in the 6,000 HP locomotive tenders, do we need a partner to participate? And are we thinking of participating? Chidambaram? Yeah, we need a partner because this tender particularly asks for locomotive experience. We have all the products that goes into the locomotive, but not the locomotive experience persons. So you need a locomotive OEM to become eligible to participate in the tender. Understood, sir. My second question is, sir, are you looking, as you say, power system is going to stay, opportunity power system is going to stay for a much, much longer time. I think you mentioned that you're looking to increase your product portfolio. In your opinion, do you think you can develop something in the medium term or tie up with somebody to increase your opportunity basket? Opportunity basket in? In the sense that you can target a new area, something like you are developing 440 kV GIS, so something which is missing in our product portfolio as of now. So there are several initiatives in the offing, but, unless something takes shape, we cannot comment. Understood, sir. My last question, sir: how do you think the OSAT capital expenditure, which is talking about $791 million, will it be front-ended, or do you think this will be mostly spread out? The expenditures will be incurred over a period of five years. Disbursed out mostly. Okay, understood, sir. Thank you, sir. Thank you and best of luck. Thank you. Thank you. Thank you. The next question is from the line of Abhineet Anand from 3 P Investment Managers. Please go ahead. Yeah, thanks for the opportunity. Based on the current capacity that you have for your transformer, switchgear and motors, what can be the max revenue potential and the increased capacity that you are putting by 2025, let's assume, what could those potentials go up by? So we cannot answer this question offhand. This is only a revenue, an earnings call for this quarter. So this, I think we need some more time to... When it will come up and what kind of product, because it will be, again, what will be product mix, et cetera. So it will, we won't be able to answer. I don't want to give you any wrong answer. On the current capacity, if you can throw some light? The current capacity, you know, just we are currently operating the transformer, we are operating, let's say, 75%, and then you can calculate, you know, another 25% increase. We cannot operate at 100%. Some repair jobs, et cetera, will have to be done, et cetera. So year-on-year, I would say that, you know, 20%, we've already committed that 25% growth in this possible indicator. I think that you can take it as an annual sales that is possible at the current level. Okay, sir. Thanks. Thanks. Yes. Thank you. As there are no further questions from the participants, I now hand the conference over to Ms. Renu Baid for closing comments. Thank you, everyone. On behalf of IIFL Securities, I would like to thank the management for the time and, audience for being patient. Sir, any closing comments from your side? So, except that as what I have said, you know, we are working hard, and we will continue to work hard to bring the best, and we hope Q4 will be better than Q3.