Ladies and gentlemen, good day and welcome to the CG Power Q1 FY2026 Earnings Conference Call. As a reminder, all participant's lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then Zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Ms. Renu Baid Pugalia from IIFL Capital. Thank you, and over to you, ma'am. Thank you. A very good evening, everyone. We are here for the Q1 FY2026 Earnings Conference Call of CG Power and Industrial Solutions. From the management team, we have with us today Mr. Amar Kaul, Managing Director; Mr. Susheel Todi, Chief Financial Officer; Mr. Murli Nair, EVP, Drives and Automation and Industrial Motors Business; Mr. Gaurav Makhija, Vice President, Frontiers and ACB Business; Mr. Ajay Jain, Vice President, Transformer Business; Mr. Chidambaram Balakrishnan, Vice President, Railway Business; Mr. Jitender Kaul, EVP, Motors Business, India Subcontinent; and Mr. Sriram Rangarajan, EVP, Head Consumer Products Business. Without further words, I now hand over the call to Mr. Amar Kaul for the opening remarks. Thereafter, we can start with the Q&A. Thank you, and over to you, sir. Thank you, Renu, and thanks, everybody there. Good evening, everybody, and welcome to the CG earnings call today. Let me start with the summary of results. We have a very strong start of this fiscal year with all-time high quarterly standalone revenue and PBT. After accounting for exceptional items, further, we have also started seeing improvement in our operating margins. Our Q1 sales grew by 25% year-over-year, profit after tax grew by 23%, and order intake grew by 56% year-over-year, making it one of the strongest quarterly performances in recent times. Further, our order backlog remains robust at INR 11,971 crore and continues to be on the upward trajectory, giving us strong revenue visibility. Now, as I go deeper into Q1 standalone performance, we achieved aggregate sales of INR 2,643 crore, recording a growth of 25%. Profit after tax, as mentioned, was high with a growth of 33% at INR 286 crore, as against INR 232 crore. Q1 FY2025. Free cash flow generated for the quarter was INR 339 crore, which is about 119% of PAT, and return on capital employed annualized for the quarter was 35%. Order intake for the quarter was INR 4,764 crore, which is 56% growth, and our unexecuted order backlog as of end of the quarter, 30th June 2025, was INR 11,971 crore, which is approximately 70% higher year-over-year. Now, moving to the segment-wise performance, starting with industrials, aggregate sales for the quarter was higher at INR 1,574 crore, recording a growth of 16% year-over-year. PBIT was at INR 172 crore as against INR 182 crore in Q1 FY2025. Margin changes that you see there are due to rising commodity prices, which could not be fully passed on to the customers, and the increasing share of railway business, as well as a mix change there within the railway business, is what impacted it. Order for the quarter was at about INR 1,269 crore, and the unexecuted order backlog at end of the quarter was INR 2,920 crore, which is about 19% up year-over-year. If I jump to the power systems, aggregate sales for the quarter was at INR 1,070 crore with a growth of 43% year-over-year. PBIT was at INR 225 crore, which is 21% of sales, as against INR 149 crore in Q1 last year. Margins were higher year-over-year on account of better price realization driven by robust underlying demand and better operating leverage, and order intake for the quarter was INR 3,495 crore, 211% growth year-over-year, and unexecuted order backlog as of 30th June 2025 was at INR 9,051 crore, which is 97% up year-over-year. With that, we can do a deep dive into our standalone performance, and I now move to the consolidated performance. At the outset, I would like to share that our consolidated performance for the quarter, for the first time, includes the operational performance of Axiro, which, if you would remember, houses our radio frequency semiconductor component business acquired by us from Renesas and other affiliate entities during the last year. Aggregate sales for the quarter. Were up at INR 2,878 crores at a growth of 29% year-over-year, and profit after tax was 11% higher at INR 267 crores against INR 241 crores last year same quarter. Margin impact due to the investment in CG Semi, the impact was approximately INR 11 crores and also lower absorption on the fixed cost in Drive and Automation Business in Europe on account of lower sales during the quarter, even though the bookings are seeing the upward trend now. Operating cash flow generated for the quarter was INR 441 crores, which is 165% of profit after tax, and INR 383 crores CapEx done by the subsidiaries, primarily CG Semi. And the return on capital employed for the quarter was 33%. Order intake for the quarter was INR 5,138 crores, 62% growth year-over-year, and unexecuted order backlog as of 30th June 2025 was INR 13,072 crores, which is 82% up year-over-year. Now, moving to a few notable events for the last quarter, CG got a large order for supply and servicing of 765 kV transformer package from Power Grid Corporation of India, valued approximately INR 641 crores, making it the single highest single order received by transformer business in CG. The order is expected to be completed over a period of 18-36 months, even though I think we can do it much ahead of time. G.G. Tronics India Private Limited, subsidiary of the company, received a prestigious order towards a station train collision avoidance system and referred to as Kavach for about INR 148 crores. The scope includes supply installation commissioning of station Kavach and other associated systems in North Western Railway executable over a period of two years. CG secured the largest single order of INR 244 crores for ESP business from TechnoElectric for supply of packaging instrument transformers, circuit breakers, and also the lightning trucks. CG launched and successfully completed QIP of equity shares and raised about INR 3,000 crores, and the issue was opened on 30th June 2025 and closed on 3rd of July. It was oversubscribed by more than three times and saw the participation from Indian and global marquee investors. With this, I will conclude my opening remarks. Analytics differential statements with detailed notes are available as part of the stock exchange filing, as well as on our company website. Thank you for listening in, and over to you, Renu, for Q&A. 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press Star and two. Participants are requested to use hands raised 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 Ravi Swaminathan from Avendus Spark. Please proceed. Hello. Hi, sir. Thanks for taking my question, and congrats on a good set of numbers. My first question is with respect to the industrial segment. We have seen around 15% kind of revenue growth during this quarter. If you can give a flavor of how the growth was in certain key subproducts like LT Motor, HT Motor, and even within railways, the regular propulsion systems for locomotives, the ones for Vande Bharat, how the revenue has panned out, and visibility for Kavach orders and also exports. If you can give a flavor on how the growth is trending on all of these subsegments, it will be really great. Yeah, sure. Thanks for the question. On the industrial segment, if you see, the growth has primarily come from the railway side. Having said that, the good news for motors also, even though if you look at the indices for industrial, both for IIP as well as the EMAR data showed the negative trend for the quarter itself, which has been consistent for the last couple of quarters. The good news is that motors business went up. Of course, not on the very high digits in growth, but then yes, some decent progress on that. This shows that the efforts and the actions we are taking in the business, not only from the commercial point of view in the market, as well as the operational OpEx piece of work that we are doing, it started showing some bit of results on that. Drive and Automation Business, as I mentioned, for the subsidiary, the revenue numbers are not so good there, but the good news is that the bookings have started flowing in, which means it is just the execution now. Some bit of improvement you will continue to see there. Understood. With respect to the Kavach order, last year we got around INR 8.00 billion of orders, and this year first quarter, around INR 1.80 billion of orders we have bought. What kind of run rate should we kind of look at every year, annually, over the next few years for Kavach? Should it be in that INR 8.00 billion-INR 10.00 billion kind of range? See, Kavach, I think the focus, I would say almost 99% focus is on the execution piece of it. We are almost reaching that stage to start executing it now because the approval process is almost, I think all the test results have happened. Passenger trials are in progress right now. We are progressing fairly well on that. Having said that, I would expect at least every month, at least 100 Kavach installation commissioning happening starting in the next couple of months there. That is one piece of it. Second, of course, I'm not giving any guidance or forward-looking statement, but the point is the business opportunity is phenomenal. It's just the strength of our designing and executing these orders on track. The better we do it on time and at the lowest time of executing and commissioning the Kavach, both for loco as well as station, more and more orders we keep getting. With respect to the propulsion system for the Vande Bharat kind of train, we had last year won a contract from the RVNL JV. Is there more to come from that particular JV, and is there a possibility of securing orders from other people who are executing or other companies which are executing the Vande Bharat train? Yeah, of course. I think one is the order that we received, the train team is, Chidambaram Balakrishnan team, they are busy into designing and executing that order. Having said that, appetite is much bigger. We are also exploring other opportunities. Not only with Vande Bharat, yes. With other partners as well. Got it. My final question is, if you can give a broad split of the industrial segment. Sorry to interrupt, sir. May we request you to join the queue again for a follow-up question? Sure. 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 question to one per participant. The next question is from the line of Jonas from Birla Mutual Fund. Please proceed. Congrats, team, on a great set of numbers. Two quick questions. First, what explains, sir, the increase in the power inflows, the power segment inflows, which were trending more closer to INR 1,800 crore to maybe INR 2,000 crore quarterly? They seem to have come in closer to INR 4,000 crore. We do assume that this is in anticipation of the new plant going live probably during the year. If you can explain, given that you have outgrown the industry in terms of order inflows, at what incremental margin levels have these orders come? Yeah, I think good question on that. These are across power sector transformers as well as switchgear installed together. Why we are outgrowing is because we are expanding in terms of our pipeline. We go to market rather than being conservative on request for quote that we are getting. We are actually going out to the market to make sure that we are capturing and increasing the pipeline of orders. That's where the win percentage is also increasing. To a question specific to margins, yes, they are a decent margin that we would look forward to. We are not compromising on margins to get more orders. Just a continuation, what would be the mix of the power order backlog now between, say, PT and switchgears, roughly? Okay, the split we are not giving, but I can only say that both are trying to beat each other. So it's a good game to have. Understood. The second quick one is on the margins of the industrial system. Either on a Y-o-Y or on a Q-on-Q basis, we've seen a deterioration in margins. While you've elaborated what led to that, if at all you can give us a broad bridge as to if there was a 300 basis points deterioration on a year-on-year basis, how much of that came through the sales mix impact due to railways, and how much of it is because of this raw mat impact? Your question is specific to industrial or motors? Yeah, industrial. So we've seen roughly 300 basis points of margin deterioration. Yeah, yeah. Because it is on the railways. Yeah. I would say the majority of the impact is coming from railways because of this PVC clause, which is price variations clause, that is there. I think it's a bit complex for Indian railways. You really don't end up getting complete inflation back into your numbers. You keep on getting the impact. Having said that, what the railway team is doing is also they've worked on i2V, which is more of VAV kind of a thing. What can we improvise over and above what you are not able to pass on? As you know, it's a tender business. Back to your question, majority of the impact is from railways and a bit from motors side. In motors, as I mentioned last quarter as well, the action that we are taking, we recently increased our prices by almost 5% starting 1st of July. I think that will start showing us some results in the subsequent months. Not immediately because it will take about two to three months for it to show up, but yes. We are taking actions on the commercial side for the market and also what can we keep eliminating the non-value-added activity in the systems. Got it. Thank you. I'll fall back in the queue. All the best. Thank you. The next question is from the line of Ankur from HDFC Life. Please proceed. Yeah, hi, sir. Good evening. Thanks as always for your time. One question on the LT motor side, and I know you've been flagging the fact that the LT motor market has been kind of stagnant to maybe a marginal decline for maybe four, five quarters. One, are you starting to see any hints of a recovery? I understand we've been growing because of our own initiatives, but more from an industry point of view, when do you believe this growth kind of comes back? Which sectors do you believe need to start firing to get this growth back? Yeah. So I think LT motor. Important is. Hello? I can't hear you. Ladies and gentlemen, Mr. Amar line might have got disconnected. Ladies and gentlemen, we have Mr. Amar on the line. Yeah, coming back to the LT motor question that you had, yes, market has further deteriorated. We do not see that revival happening, but as I said, it is positive, but yes, a bit of impact on the margins, which, as I mentioned, we are countering by already increasing the prices in the market effective July. Okay. In your view, when do you believe we could start seeing some recovery? Is it going to be more second half? Are you seeing any signs there? Also, which segment and markets do you believe could drive that recovery? I don't think even the market recovery, I don't see again, market recovery, I cannot forecast. It purely depends on the way it works on the industrial piece. It is when these smaller CapEx start coming in. Now, that we are not able to see in a large way. Yes, a bit of activity we can see, but not too much of it. That obviously will depend on the sentiment and the mood and how this market will come. Having said that, we are not 100% dependent or. Important is to see which areas or verticals we are not there. That's where we're trying to penetrate into. That's where we see that we are doing better than the market. When the market is negative and we are still positive, I think that's where the growth is coming from. Sure. I get it. Just the second one on the power side, if you could help us on your current utilization level across your plants, and are you facing any capacity constraints there? On the power sector? That's right. On the power side, on the power sector. Yeah. I mean, the capacity is, of course, an issue right now across the globe, not only in India. That is why you see huge impetus that we have on increasing our capacity. Yeah. It is in a full acceleration mode. Yeah. Two things. One is the existing plant getting up to 40,000 MVA capacity that we had already mentioned. By September, we will be up and running to that from current approximately 20,000 MVA. Also, the 45,000 MVA, the work is already started, construction for the new plant. That has already begun. Fair. Okay. Got it. Good. Thanks. Thank you. The next question is from the line of Aniket from Motilal. Please proceed. Hello, Aniket, sir. As we have no response, we will move on to the next participant. The next participant is. The next question is from the line of Subhadip from Nuvama. Please proceed. Good evening, sir, and thank you for the opportunity. Just wanted to get a sense of if we have to take a view over the next 12 to 18 months, how do you see the longer-term margin stabilizing across power, railways, and the industrial piece? See, I think it can only get better, in my opinion. There, I think we can keep talking for the next couple of hours on why do I say that it's going to go better. Overall, at company level, if you tell me, I think at some stage we'll bounce back to 14-15% PBT margins. Understood. Do you see the current levels of margins, at least on the power side, which seems to be the highest traction, that continuing around this 20% odd level? It should go even better than that. My expectation is much bigger. Understood. Lastly, I think you had talked about some large potential for exports, especially on the motor side, I think in the last call. Just wanted to understand what is the progress on that side, where do you think you see things moving? I think it's progressing well. As I told you, we have been doing the foundational work, which JK has been increasing and improving on the capacity, working in collaboration with Murli, who has been making investments in terms of go-to-market, having our people in respective regions. Today, if you see, we have the presence in North and Central Africa, in Africa. Even Europe, some of the countries we have added some of the headcounts to increase on the channel. The action is on. Of course, as you know, to see the real effect, it takes a couple of quarters to reach there. Getting partners on board there, having our people footprint on the roll, and also having the manufacturing capability building. That all is going on. Good to share that, in fact, when we had the business review a couple of days back, I am happy to see the progress we are making in those areas. Yes, good day there. Understood. Last question from my side. On the semiconductor piece. By when do you expect to start seeing the larger ramp-up and meaningful revenues and bottom line coming from this? Thank you, Jay. So semiconductor. There are two portions to that. One is CG Semi, and one is Axiro. Now, CG Semi is absolutely on track. The mini plant, as we had projected, 2026, it will start production. And the main plant, which is the larger one, will start production in 2027. We reviewed the project, and I think they are, in fact, a little ahead of the target. That is going good. And Axiro, which is our radio frequency design chip designing facility, the business that we acquired, in fact, their revenue will start already flowing in. Because that was a direct movement and acquisition of this facility. So yeah. Understood. Thank you so much. 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 question to two per participant. Thank you. The next question is from the line of Richard D'Souza from SBI Pension Funds. Please proceed. Yes, good evening, sir. This is just a broad policy-level question because over the past few months, if you have seen Chinese actions, it seems that they are indicating that they do not want India to become a manufacturing hub. In light of that, I mean, has there been any change in the attitude of government towards companies which are specializing in manufacturing? That is the first one. The second one is what is CG's thought process about this? Because this opens up a lot of avenue for a company like us. Are we looking at the newer areas? Yeah. Thanks, Kai, for the question. First one, obviously, you see macroeconomic trends and the political discussion between the countries. Honestly, that will keep happening. We do not tweak our strategy every second day in line with that. If not China, if not others, you will have opportunity for the whole world. It does not change our manufacturing footprint strategy at all. We continue to progress on what we have planned for. To your second question, what is more on? On the same thing. What the companies are thinking about that if these things are happening? Yeah. I think we will keep on investing. One is the portfolio that we have across different businesses. I think that itself is a huge opportunity across the globe that we have, including India. Of course, as we move forward, anything on the adjacencies of each of the businesses that makes sense for it, yeah, we'll be open to look at those opportunities. Okay, sir. Maybe I will come back later. Thank you. Okay. Thank you. The next question is from the line of Bhoomika Nair from DAM Capital. Please proceed. Yes, good evening, sir. Congratulations on a good set of numbers. My first question is on motors. You spoke about the weak demand and how we've outgrown the industry for the last several quarters. Now, in this weak demand environment, we've taken a 5% price hike effective July. Is this something that the rest of the peer set has also seen? Do we expect that this could possibly impact our market share gains that we've seen in the last couple of quarters? Yeah, Bhoomika, thanks for the question. See, the point is. For the motors, LT motors, we are the market. So we got to define what should the pricing in the market. After we increase our pricing by 5%, the good news is a lot of competitors are following what we are doing. I think that's the way you actually continue to be the market leader. I'm happy with what I'm doing. It doesn't mean that when we increase by 5%, you will not have the yield of 5%. Even if you have a yield of 50%, I think from pricing discipline point of view, that's a good step forward. Sure. There is not a similar price increase in the HT motor. HT motor, the pricing has not been changed. HT motor, it's more of customized motors because every motor would be unique. It's like building a Taj Mahal. Every time you have to carve out a different design and then accordingly price it. Sure. I mean, how is the demand on the HT motor panning out with these new solutions? Our market share, obviously, there is, while it has increased, but not as strong as the LT motors. How is the demand and our share kind of increasing as we're moving ahead? I'll pass on that question. Jitender Kaul, if you are there, how do you feel about the HT motor market? Absolutely. Thanks, Ahmad. Thank you for the question. There is a big demand in the market, and right now also market is very small. We are serving a smaller portion of the market. We have plans in place where we are going to invest on the design, and we want to expand. We want to expand, have more verticals to work with. This is one of the priorities I am personally working on, is how to have a bigger market share and a better market share and expand the overall market, third market for us. This will be our key focus area. The demand there definitely is, there is a big demand, but we will have to have the right set of solutions for our customers. Sure. Sure. That helps, sir. Just secondly on power. May we request you to join the question queue as we have other participants in the queue? Sure. I'll come back. Thank you and all the best. Thank you. The next question is from the line of Renu from IIFL Capital. Please proceed. Yeah. Hi, good evening, sir. Just two quick questions. First, can you share updates on where are we with respect to commercial volumes for our EV motors? And secondly, on the export front for motors, can you also elaborate for what type of applications are we targeting the export and any particular region which are high-priority regions for us apart from Africa, Europe, where you mentioned you're setting up distribution and GTM? Thank you. Yeah. So Renu, I think on the EV motor, I would say we're still in the beginning of it. I would not claim that we have got the secret sauce. The first thing is for the three-wheeler motor and the drive, we are ready there. The motors have already been tested. They have passed the homologation for individual motor and inverter. They are at testing at the OEM level, at the auto company level. Hopefully, next two months, we'll get the approval, and that will start the supply piece of it. For others, we are actually still in the development stage for the larger trucks. The development of that is still in phase. Yeah, still a bit of a long way to go there. Sure. Can you elaborate the specific applications are we targeting on the export segment for motors, or these would be standard motors, LT motor segment only? You mean EV, or are you talking about industrial motor? No, conventional motors for export market. Conventional motors for exports will be the similar portfolio that we have. One is the industrial piece, which are those smaller LT motors, as well as the customized motors. As we get more and more experience into, we have the right skill set team sitting across divisions because when you're exporting motors, you also need to have service centers there. That's what the team, Murli and team, is busy setting up right now. It will be for both. Got it. Thanks, Renu. 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 question to two per participant. 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 one per participant. The next question is from the line of Aniket from Motilal. Please proceed. Hello. This is Bhalchandra Shinde from Motilal Oswal Agency. Sir, the recent order which we received of INR 400 crore from Konkan Railway, that we have started executing, and that is actually impacting our industrial system segment ordering, sorry, profitability, or it is yet to execute? No, no, I don't think so. I think execution has just started. The team has started working on it. I think that will give us good days ahead. It is the routine business and the mix that has changed, more skewed towards the traction electronic. That's where the impact on the margins has come. With our railways, whatever reverse auction that they do, that's where the impact has come. Yes, to your question, no, nothing related to Konkan. Okay. Okay. I mean, power, if you can provide insights that the kind of a trajectory which we are seeing in the order inflow, what kind of a visibility we see over the next one year, especially because of these key indicators going on, and how we see our capacities which are going to come will be utilized over the next two to three years? I think. For power, honestly, I'm very, very bullish for even the next five years. I will not worry about it. I think we'll keep expanding our capacity. Obviously, as we progress and keep looking at the market, get our feet on the ground, we'll keep expanding it further. I don't think with even 85,000 MVA capacity that we have invested, we'll be satisfied with that. Again, it will all be a knee-jerk reaction. As we get more strong hold on our pipeline, it keeps swelling, we'll keep adding capacity. Based on all the data that you see, all the forecasts, and what we see on the ground, next five years, nothing is going to happen. It will keep going up. There will still be capacity. The capacity versus the demand gap will always stay there. Got it. Thanks, sir. I'll come back first. 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 question to one per participant. The next question is from the line of Umesh Raut from Nomura. Please proceed. Hi sir. Good evening and congrats for the healthy set of numbers. My first question is pertaining to employee costs. We have seen a 52% increase in the cost year-on-year basis. Is it largely on the account of new operations getting started for Axiro or investment into CG Semi? Yeah. Hi. So you are looking at a total consolidated number. Am I right? Yes. Yes, sir. Yeah. Yeah. So it's coming out. To CG Semi, as well as that you know that we did the acquisition of Axiro. So that also is coming at a, in that business, the staff cost and the employee cost would be much higher. Any other costs you have incurred upfront for the Axiro? Because the margins for Axiro looking like are lower single range currently. So when we can expect stabilization for that particular business? Yeah. These are as a part of the transaction, the initial setup that we have put up there. I think that is what is showing there. Yes, first year, as you know, any acquisition that happens will be the transition year. You will see the upside going in. That is specific to Axiro. I think CG Semi itself, if you are looking at employee cost at consolidated level, yes, I think there are almost 170 people already on board and with no revenue. Again, we made that investment. It is more strategic investment because most of them have been trained right from operators to engineers in various plants of our partners outside India. Right now, they are on the job of learning. Our lead time from manufacturing start till you start the shipments will be compressed with the investment that we are doing now. Got it. Thank you. Thank you so much. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your question to one per participant. The next question is from the line of Atul Tiwari from JP Morgan. Please proceed. Yeah. Thanks a lot, sir, and congrats on a good set of numbers. Sir, in CG Semi, how much is the total CapEx that you have done so far? That's approximately around INR 400 cores. Between now and end of 2027, you will end up doing roughly INR 76 billion. The entire thing will happen now over the next two years. Is that right in the sense? 5,700 something. For all, including subsidy, yes, including subsidy, you are right. Or I would say the capital support from the government, not a subsidy. Our contribution would be around INR 1,700 crore. Okay. So. I thought the subsidy was 50%, right? So if the total CapEx is INR 76, then your contribution will be higher. Is there some change in that, or? No, sir. That we said. We initially have been talking about the 50%. It's a kind of a support, capital support from the central government, and between 20%-25% support from the state government. The rest would be given by CG and other partners of the CG. Okay. The support from the state government will also be available before the production start, or it will come only after production? The discussion is going on with the state government, and it might be on the similar line what the central government is doing. Okay. And in. Thank you. The next question is from the line of Harshad Patel from Equirus Securities. Please proceed. Thank you very much for the opportunity, sir. My question is on the Axiro. You have explained that given that this is the year of transition, the margins are slightly on the lower side over here. Over the medium to long term, what could be the stabilized steady-state margin for this particular business for us? See, as I said, first year for any acquisition will be the transition year. There will be some upfront costs, setting up, which are at the office in Bangalore with the lab there. All that is transition. It will not be apple to apple conversion. Yes, specifically, we are not giving any guidance, but the way they have performed before, it will be easily a double-digit margin. Understood, sir. Thank you. Thank you very much. Thank you. The next question is from the line of Aditya from Kotak Securities. Please proceed. Okay. Thank you for the opportunity and congratulations on a very strong set of numbers. I just want to get any color on the big uptick in inflows happening in the power side and the go-to-market strategy. Could you give us a sense of the splits of the orders that you have won between domestic and international? Any more color on what exactly is the company doing to gain market share would be useful. Thank you. That will be my only question. Yeah. I think the majority of orders won are all domestic. It's primarily from India. There's not a big skew that has happened before and after for exports. It's almost in the same proportion. Not much of a change here. Important is we will continue and we are continuing to keep building on our pipeline. Pipeline from where, obviously, that is a little bit company confidential. We will not reveal that too much unless it gets converted into the order. Understood. That will be my only question. Thank you. Thank you. The next question is from the line of Sameer Thakur from Ambit Capital. Please proceed. Hi. Thank you. I just want to ask if you can just elaborate on service business, what efforts you are taking there, and if you have any target in your mind, let's say by 2030. Thanks. I think very good question. And I love that. Service is my passion. As of today, if you tell me, give me a clear roadmap of service business till 2030, my answer is I'm not ready right now. But is that the business that will show us results in the future? Absolutely. And are we working on that? Yes. For at least three or four. Four business leaders in this call, they are actively working with their teams along with me and the strategy team to develop a model which will be unique. When I say service business, it's actually a multi-stage service business. It's not simple that you get a spare part order or you get a service order. I mean, that will continue to happen. What I'm talking about is full-fledged five-year, ten-year contract and taking the full responsibility of the products that we are supplying. Or also at some stage, we get into, for example, motors, like the way you have SaaS, we have Motor as a Service kind of a package where we make the investment for you and we sell you the energy efficiency. Those are the steps where we will get into. Yes, we are not prepared already on that right now because it requires a lot of hard work, which we are doing. Okay. Thanks. I'll get back in with you. Thank you. The next question is from the line of Shlomo from Jefferies. Please proceed. Hi. Thanks for the opportunity. Just wanted to get a bit more sense on the semiconductors incentive. I think it was really referred to in the previous question, but just could you clarify? The subsidies that you are or the incentives that you're set to receive, are they already being booked as received or only once the facilities are operational? Yeah, just if you could give some clarity on that. Okay. This is not a subsidy set support like capital support. Subsidies always come a little later once you invest it. It would be more like a pari passu, right? The money going into the pool and then coming from every stakeholder, and then it will go into the suppliers. This is the way it will enter. The model will work. It will come while you're investing, not necessarily only once the facilities are operational like the subsidy thing, but put the pool together from the start? Yeah. Yeah. You are right. Got it. Got it. Thank you so much. Thank you. The next question is from the line of Subramanya Yadav from SBI Life Insurance. Please proceed. Thank you. Sir, we have a strong inflow in the power segment in this quarter. Just trying to understand, have you started booking orders for the new facility which is coming in September for Transformer? Hello? I think that's a very good question. As I said, the construction has just begun there. Hopefully, in the next two months, we'll start booking the orders. Ajay, you want to add to that? Yes. Once the construction starts, we will start taking orders. Our focus is on taking short delivery orders there, so we can start delivering within 12 months. Okay. Sir, actually, I was asking about the extension of the existing facility, Transformer facility, which was supposed to come in September. Yeah. That is on track, as I mentioned. It will go to about 40,000 MVA by September. Okay. For the second line of. Thank you, sir. Can you just get in the question queue? Of course. Okay. Thank you. Thank you. The next question is from the line of Uttam Kumar from Avendus Spark. Please proceed. Thank you for taking my question. My question point is with power systems. Today, we have close to INR 9,000 crore of orders. We are continuously seeing strong traction in terms of order inflows. The first thing is I want to understand on this INR 9,000 crore order book which we have, what is the execution period for this? What is the kind of revenue which we are looking at for this full year? I mean, a rough range is also, I think, would suffice. The projections on the export market, so what's happening on the Transformer side? Because we have been stating that we have been also trying to look at the exports side of it for the Transformer space. Have you started any exports, or is it going to be at the later stage of the year? More clarity on those details. Yeah. Yeah. So the backlog that we have for Transformer specifically, I think with the latest order that we got, big one, it's up to 26 months. I don't think we have to really wait for that long. We should be able to execute everything in the next 18-22 months. That's the reason also why we have to keep filling up the pipe and bring it there. To your question on export piece of it, yes, the work is continuing there, what we have been doing. We are also looking at strategically how to play a bigger game in that market as well. That work is in progress. Got it, sir. Thank you. Thank you. The next question is from the line of Umesh Raut from Nomura. Please proceed. Yeah. Hi, sir. Thank you so much for just supporting Transformer. My one question is related to subsidy performance. Mr. Umesh, can you be a bit closer to the handset? Is it audible now? Yes, sir. Yeah. My question is pertaining to industrial systems and for subsidiary business. If I look at performance for subsidiary business for industrial systems, it has remained more volatile since the last few quarters. I think margins are also hovering in the range of negative to about, say, as high as 10%. We have done margins of about 10-15% a few quarters back in this particular business. I think now those are quite struggling. Any reason over here on how soon we can expect margins kind of reverting back to low double-digit range for industrial systems, export business, or subsidiary business? Hello? Am I audible? Sir, the line may have got disconnected. Ladies and gentlemen, we have the management again on the line. Yes, sir. You may proceed. Hello. Moderator? Yes, sir. Yeah. Should I repeat my question? Yes, please. Yeah. Sir, if I look at our business in the industrial systems, which is falling under subsidiaries, there we have seen quite a bit of volatility in terms of margin performance. I just wanted to understand this is also kind of impacting on the overall margins for industrial business. How soon can we expect more of steady performance from those subsidiaries? Yeah. From subsidiaries, yes, I think what we could control, that has been done in terms of cost and control. The good news is that the bookings have seen the upward trend, which means that we continue that momentum and it will show up in revenue in the forthcoming months. Fixed cost is already taken care of. Any increase in revenue will actually make sure that your margins are improving consecutively. That impact on the overall industrial business, I would say that is the third one, very, very small portion because the size itself is not very big. For us in terms of exports, as we have signed now. There is a probable engineering goods export opportunity for us from. Can you repeat? I lost you in between. I was asking about the free-trade agreement, which has now signed today between India and the U.K., and the possible engineering goods export opportunity because it is coming under zero tariff now. What are your views on this particular opportunity? I think we will have to wait and see what happens. We have to see what does it mean in terms of exports. Honestly, we are not very, very big. Yeah, we have to evaluate and then look at it. If you say honestly, this free-trade agreement and tariffs, etc., it does not impact us too much because if you look at our model for exports, it is mostly FOB or export kind of thing. It still goes to customer. When we interact with customers, most of them are like, "Any change that happens, we will have to pick it up." They do not dump it back on us. We will not be too worried about these macroeconomical changes. Thank you. Due to time constraints, that was the last question. I would now like to hand the conference over to Ms. Renu Pugalia for closing comments. Thank you, and over to you, ma'am. On behalf of IIFL Securities, I would like to thank everyone for the patient presence and the management for giving us the opportunity to host the call. Amar, any closing comments that you would like to make for the day? No, thank you so much. Thanks, Renu, and thanks everybody for joining us. Really appreciate and value your relationship with us. Keep investing with us, and we'll keep working hard to make sure your investments are secure and keep going. Thank you. Thank you. Thank you. On behalf of IIFL Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your line.