Ladies and gentlemen, good day and welcome to the Triveni Engineering & Industries Limited Q2 and H1 FY 2026 earnings conference call. As a reminder, all participant 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 call, please signal an operator by pressing star, then zero on your touchstone phone. I now hand the conference over to Mr. Rishabh Barar from CDR India. Thank you, and over to you, sir. Thank you. Good day, everyone, and a warm welcome to all of you participating in the Triveni Engineering & Industries Q2 and H1 FY 2026 earnings conference call. We have with us today Mr. Tarun Sawhney, Vice Chairman and Managing Director; Mr. Suresh Taneja, Group CFO; Mr. Sameer Sinha, CEO of Sugar Business Group; Mr. Rajiv Rajpal, CEO of Power Transmission Business, as well as other members of the senior management team. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature, and a statement to this effect has been included in the invite which was shared with everyone earlier. I would also like to emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner. We will commence this call with opening remarks from the management, following an interactive question-and-answer session. May I now hand it over to Mr. Tarun Sawhney? Over to you, sir. Thank you very much, Rishabh. Good afternoon, ladies and gentlemen, and welcome to the Q2 H1 Fiscal 2026 earnings conference call for Triveni Engineering & Industries Limited. The key numbers for this half-year are the revenues from operations increased by about 18.4% to just over INR 3,300 crore. The PBT stood at INR 32 crore versus INR 11.5 crore for the same period for the last half-year, and the PAT stood at INR 23.5 crore against INR 18.6 crore for the previous corresponding period. We have quite a lot to discuss on this call, and there have been lots of important announcements and movements in the markets affecting all of our businesses, and I hope to be able to cover all of that over the next 60 minutes or so. The net turnover for H1 increased, as I mentioned, by 18%, supported by a 21% increase in sugar and its allied businesses, and an 8% increase in the engineering businesses of the company. In Q2, the net turnover increased by 14%, which was supported by a healthy double-digit growth across both business segments. There is a healthy increase in profitability in H1 and Q2 Fiscal 2026, supported mainly by improvements in the distillery operations, which is something that we discussed on the last earnings conference call, which we have stepped right and managed to really emerge quite well as far as our distillery performance is concerned, and also encouraging performances from our engineering business. The power transmission business secured another successful, healthy quarter. The sugar business profitability remained a little subdued, however, in this quarter, in view of the major period of the half-year off-season and no manufacturing happening during the quarter under review. The gross debt of the company as of the 30th of September 2025 increased to INR 505 crore compared to INR 383 crore a year ago. The standalone debt for the period under review comprises of term loans of INR 310 crore, out of which approximately INR 160 crore are with interest subvention. On a consolidated debt basis, our numbers are INR 753 crore of gross debt compared to INR 536 crore on the 30th of September 2024, and our overall cost of funds stands at 6.4% in Q2 Fiscal 2026, which is about 30 basis points lower than the 6.7% in the previous corresponding period. That is quite a positive movement. Turning to the business-wise review, in the sugar business, the revenues for H1 increased by 22%, supported by a 14% increase in sugar dispatches and a 4% increase in realizations. For Q2, the revenue increase was 27%, supported by 15% volume growth and 5% in realizations. Both, of course, were very important for the performance of the sugar part of our business. The substantial period of H1 2026 and the entire Q2 Fiscal 2026 represents the off-season period, and no manufacturing operations take place during Q2 Fiscal 2026, and therefore all expenses relating to that have been expensed out. The results also include income of INR 16.81 crore in the sugar business arising from the upward revision of the power tariff announced by UPERC with effect for the 1st of April 2024. The increase in the cost of sugar sold could not be fully offset by higher sugar realization price and higher sales volume is the most notable point for the sugar business for this quarter under review. Our inventories on the 3rd of September stood at 16.9 lakh quintals, which was valued at INR 37.4 per kilo. Just to give you some data points, the previous quarter, 30th of June quarter, we had 44.55 lakh quintals valued also at INR 37.4 per kilo, and last year, on the 30th of September 2024, we had 20.6 lakh quintals valued at INR 35 approximately per kilo. The reduction in the inventory is in line with the reduction in the national inventory levels as well. To give you that comparison, on the 30th of September, we had approximately 8 million tons, and this year, at the end of September, we have 6 million tons of stock, so about a 25%. For us, it has been slightly lower than 25%, which is good because October and, sorry, yes, October and November, of course, have higher sugar prices, and all of our sugar from last year will certainly be liquidated by early January of this year. Everything in this particular quarter. Looking at the industry scenario, as I mentioned, we start this year with a 6 million ton opening stock and an anticipated domestic production of about 31 million tons. These are our numbers through the Triveni estimates. Domestic sales, we still believe that we will see some stockpiling and some build-up across over the course of the year, and therefore we assume sales of approximately 28 million tons, very similar to last year, and a closing stock of about 7 million tons. This considers diversion of 3.25 million tons of sugar into ethanol and about 2 million tons of exports. Broadly speaking, those are the numbers that we're looking at. We're anticipating that over the next few weeks, DPFD and the Government of India will announce an export program. As we're well aware, I will, of course, talk about global prices, etc., and the issues regarding Indian exports as we go forward. The UP government has recently raised the SAP by INR 30 for sugar season 2025/2026. This, very frankly, puts pressure on the profitability of sugar producers in Uttar Pradesh and necessitates a review, in our eyes, of the MSP urgently by the Government of India to bring it in line with input costs. We believe that MSP revision is being contemplated by the Government of India and could be—there are greater chances that that will fructify over the next few weeks, and this was, of course, a very different position than we were in last year. There have been many representations made by the State Millers Association as well as private millers to the Government of Uttar Pradesh for subsidies with respect to the enhanced SAP, a record SAP that has been announced by the UP State Government. One measure that we have already received is a reduction in the molasses reservation. On B, that is a reduction of 19% to 18%. On C, it works out a reduction from 26.18% to 24.84%, about a 1.34% improvement, and it's effectively just under INR 1 in terms of cane price impact. Not substantial, but something. We are also anticipating an increase in the transportation allowances, possibly up to INR 3 is what has been requested, which will equate to between INR 1 and INR 1.5 on cane. We're also looking at an increase in the country liquor reserved price, and that is something that is being contemplated over the next few months, and again, that will result in a few rupees on cane in terms of benefit. The industry has also asked for direct subsidy to help ensure that cane prices are paid duly and the farmers focus on plantation of sugarcane for the following season. I think this is something that the industry and the Government of India are very much aligned that they want all the marginal lands that were being diverted to other crops, including maize, frankly speaking, to be diverted back to sugarcane and work to be done very proactively in terms of enhancement of recovery and thereby impacting the farmer's take-home income, especially next year when we move into the election period as far as the state of Uttar Pradesh is concerned. Looking briefly at the international scenario, the latest estimates point towards an over 4 million ton surplus. In fact, it's pointing to an even higher surplus than that, and that has had a massive impact on international sugar prices. If we look at the March contract, it's at $407 per ton for whites, and December's at $412. These are multi-year lows as far as the market is concerned, and at these prices, Indian sugar being exported would be a great challenge. However, the requests that have been made to DPFD are that the industry be given a much longer period to evacuate the 2 million ton resumption that one has taken for the export of sugar. If that is granted and we do have the benefit of, let's say, three quarters to export that quantity, there is a very real likelihood that we will have an opportunity to be able to do it. Also, with an early announcement of exports, we may have factories in Maharashtra, if they so choose to, for cash flow reasons or others, export raw sugar if the market corrects ever so slightly from here. These are very definitive possibilities, etc., and we do see this as an essential component to maintaining sugar prices as we go forward. Despite the large amount of sugar being produced, the smaller diversion to ethanol that had been anticipated, and a challenging position to be able to export, I still believe that we will have moderate sugar prices over the coming years. I do not necessarily see any cause of any alarm, and neither do I see any 7 million ton opening stock on the 30th of September 2026. I think that will bode well, and we will perhaps be able to inch forward as we come towards the end of the next sugar year. It is an interesting scenario. I do not necessarily think that there is—I think all the bad news has been factored in. I think from this point onwards, we will certainly look at more positive news. Turning towards the alcohol business, the sales during the quarter were down by 6%. Consequently, the closing stock—and this was because of the supply disruption due to an export fee notification—the closing stock of alcohol stood at 167 lakh liters at the end of September compared to 62 lakh liters last year. We rectified a lot of that, and a lot of that closing stock has been evacuated over the last five weeks, and of course, a lot more to be able to return us to a position of normalcy. The average realization price during Q2 is lower due to an increase in the share of ethanol produced from FCI rice. We have registered a significant improvement in the profitability on the back of correction of input prices, particularly maize, and a much stronger focus on cost optimization. I'd like to give you just some comparison and some ballpark estimates. We started procuring maize from Bihar in April-May, and that was at a delivered factory gate average of approximately INR 22.50 at that particular point in time. The last few prices of UP maize, which rose, of course, we started procuring at a lower price, then it rose, but the last price was at about INR 22.30 or INR 23.30 factory gate delivered as an average across all of our distilleries. Right now, we're getting Madhya Pradesh maize, which of course has a better starch content and significantly better quality than UP maize, and we are receiving that at the factory gate at INR 20 per kilo. I do believe that with the 60/40 limits that have been placed by MoP&NG in the ethanol tender, we will continue to see softness in maize prices. In fact, we are already at international maize parity. I'm not sure if the government will look at export of ethanol, but if maize prices go down, I think that could be a very real possibility and something that the government could look at in terms of alleviating the pressure on standalone distillers, especially processing maize. I think that over the next few months, as the Madhya Pradesh crop looks very good with descending prices, and as we move towards the Bihar crop, which is important for UP-based grain procurers like ourselves, that will also start with sufficient softness. I think from a grain perspective or from an input cost perspective, I think we're looking pretty good. Ethanol constituted 92% of alcohol sales in Q2 compared to 93% in the previous corresponding quarter. The sale of ethanol ENA produced from sugarcane-based feed stocks constituted 46% of total alcohol sales in Q2, 44% in the previous corresponding quarter, while ethanol ENA produced from grain contributed to the balance 54%, which was obviously 56% in the previous corresponding quarter. Looking at the industry scenario for ESY 2025/2026 in cycle one, the OMCs have secured almost the entire amount, so 1,048 crore liters against 1,050 crore liters, which was the overall amount. We believe that cycle two, three, and four will have a minimum of another 200 crore liters, perhaps even more. Now, you may be wondering, what does that mean in terms of the overall blend estimate, and it points to a higher blend than 20%. Yes, I think so. I think that we will, even without noticing it in certain parts of the country, probably have a blend that is a little bit higher than 20%. However, the elephant in the room really is what happens afterwards because, as you all know, there was a massive amount of 1,776 that was tendered for the OMCs against the 1,048, and of course, that does not include the private parties, Nayara and Reliance, but that also means that we have a massive quantity. In fact, our estimates are that the country's production is north of 2,300 crore liters in terms of alcohol production, and that does not include distilleries which are nearing finalization or operational readiness, which there are several across the country. It is a positive number to that 2,300 crore liters. It means that we have to, of course, find a solution. The government is acutely aware of finding said solution, and I think it is a troublesome point, and it is difficult to ascertain where we're going to go, but certainly, the decisions have to be taken for this excess quantity that exists across the country. The procurement price for FCI ethanol in the last tender has been revised from INR 58.5 a liter to INR 68.32, in line with the increase of the administered price of FCI rice from INR 32.5 per kilo to INR 23.2 per kilo. The EOI for 2025/2026 had stipulated a condition that vendors should offer a minimum 40% of the total grain offered based on FCI rice Q1 to Q3 for this present ethanol supply year, and that is exactly why we have seen a great softness in maize prices, which will reflect in our profitability in this quarter and, of course, in subsequent quarters as well. Looking very quickly at what it means for us, we have been very successful in our secured quantities, but that does not mean that we are projecting a higher supply of ethanol to the OMCs and private marketing companies, and, of course, the ENA that we produce. The total quantum of alcohol produced by Triveni for this year, its ethanol supply year, is projected at higher than what we had last year. We do need to secure a few crores of supplies in cycle two, three, and four, which we anticipate, broadly speaking, equitably between molasses and grain, just north of about INR 40 million liters. It is not a huge amount, but it is an important amount that we need to secure and supply, and that will allow us to actually produce at the most efficient capacity, which is something that the units across the group are completely focused on and allow us actually to lower our cost of production and cost of conversion as well, which is something that, as I mentioned even in the last quarterly call, that we are looking at with a very, very fine-toothed comb for Triveni. Turning quickly to the power transmission business and the first of our engineering businesses, the order book during the quarter-end review was definitely a little subdued, but however, our visibility on inquiries has been quite remarkable. I think this is a little bit of an anomaly. I believe that it is an anomaly in terms of the particular quarter-end review. I think there was a lot of global factors that came to play, tariffs being one of them, also events that were happening in West Asia, events that were happening in Eastern Europe, events that are happening in other parts of the world that led to a little bit of uncertainty as far as our global customers are concerned. However, our overall numbers for the year still remain unabated. We're certainly looking at achieving a very robust double-digit growth in order booking turnover and profitability for this financial year. As I mentioned, despite the movement in this operating environment and after absorbing the incremental costs related to capacity increase, our PBT margins have improved by more than 400 basis points. This is essentially due to two very important factors. Number one, a very good product mix. The focus of the business in terms of really attuning our product mix and delivering the maximum profitability is something that has happened. The second is a very strong focus on cost optimization. When I talk about the future, I will talk about initiatives that have happened and that will happen in the future, which will allow continual improvement in both of these two levels and the emergence of other levels as well to ensure success of this business as we go forward. During the first half year of 2026, I'm delighted to report that we have registered nine new OEM customers in our product segments, and some of them are marquee industry names globally. This is very, very important to share because I've mentioned in previous calls that we're doing a lot of work in terms of qualification orders. This is the result of those qualification orders where we are now delivering those products and hoping that it will result in a significant increase as far as orders to new critical customers globally. With respect to the water business, the results on the consolidated basis, including ISPVs of Mackera, both ISPVs showed an order booking of INR 1,520 crore, which includes INR 1,092 crore towards O&M contracts over a longer period of time. The business actually has done reasonably during the quarter-end review. Again, we've focused very, very hard on reducing costs and ensuring the maximum amount of profitability of this business and execution as we go forward. Looking quickly at the outlook for the various businesses, because I think this is where I'd like to focus some of our time, I'll start first with sugar and then move to the alcohol and then to the engineering businesses. With respect to sugar, the overall cane crop seems very healthy for the state of Uttar Pradesh for 2025/2026. Last year, the state produced 9.27 million tons of sugar. This year, we're anticipating 9.6 million tons of sugar, an increase of 3.5%. Despite some flooding and waterlogging in the 2024 and 2025 Southwest monsoons, which were timely and well-distributed this year, significantly boosting the sugarcane planting and yields, especially in Uttar Pradesh, we have seen similar improvements in yields as well as potential recoveries in Maharashtra and Karnataka. In Uttar Pradesh, as a whole, we have seen continual varietal replacement, and the shift away from 238 at Triveni has been even more acute. I think other varieties are delivering promising results, perhaps not as magnificent as 238 in its prime, but pretty close. I think we are going to see a lot of change because there are so many varieties that are being considered right now, and there is so much promise, frankly speaking. I can say this for the first time. I've not said this before, but I'm very heartened to see the impact of some of the trial varieties, etc., and they will form a very important part of our development programs as we move to spring planting in February/March of 2026. With Diwali in October, the UP crushing season has started pretty much on time, perhaps a little bit early. As of today, Maharashtra and Karnataka, of course, will start a little late because of the delayed withdrawal of the monsoon. I guess this is a positive for UP Mills. Five of our sugar units have already started. That includes our subsidiary at Shamli. Last year, four units had started as of today. This year, it's five units. The balance of three units will start in a matter of just a few days from now. Certainly, by next week, everything will have commenced operations. The recovery for the factories that started early is pointing towards a positive increase, but it's very challenging to give you any real data estimates at this particular point in time because the real bagging has started across all of the units. The sentiment is certainly positive. The test data point towards a positive increase in recoveries, certainly this year over last year. In terms of availability of grain, we are happy to report that we're looking at a significant increase in the quantum of cane that will be crushed across all eight of our sugar factories. Each factory is looking at a substantial increase. Some of it is due to excellent reservations that we have secured from the cane departments and the government of Uttar Pradesh, and a lot of it has to do with the amount of development work that has happened at the units. In fact, the second is the most important point. That coupled with a projected increase in recovery, we're looking at a substantial increase in the total sugar this year versus last year. I'm hesitant to give an actual number in terms of the increase in sugar, but I would like to just share that it will be a very handsome amount in terms of overall sugar production. That would be very good because it will mean a relative lower cost of production and spreading out of our costs over a larger number of banks, etc. As far as the alcohol business is concerned, I've talked a little bit about the outlook already in terms of securing about INR 40 million liters of orders through cycles two through four, as well as through the private marketing companies as well. We're very confident we should be able to achieve all of that and have our distilleries run at peak capacities in this supply year. Turning quickly to the power transmission business, from an India perspective, we're looking at strong manufacturing and investment demand as of today. I think there's a broad feeling that on balance, we're seeing India incorporated move forward quite steadily. The inquiry book is looking very encouraging. In fact, it is far more encouraging than it was three months ago. I think that bodes quite well. On a global basis, I think we're a very small fish as far as our power transmission business is concerned, but we're seeing massive inquiries that are coming from all parts of the world. Europe is particularly strong. We're seeing other parts of Asia, both West Asia and Central Asia, inquiries that are ballooning, and we have started seeing very encouraging signs from North America as well. During the quarter, we continue to build our brand and participate in key exhibitions around the world. I think these new marketing efforts pay massive dividends in terms of our perception, in terms of forging new contacts, and managing to enhance our global footprint, etc. We are definitely recognized as a global competitor to other high-speed gear manufacturing firms. I had already talked about the very positive profitability performance in the quarter-end review, and that was primarily due to cost optimization as well as an optimal product mix. I think that realization is a very important one, and we're going to look at enhancing that and further improving that as quarters go by to ensure that we eke out our profitability levels very much in line with what I've been saying at these investor calls over the last few quarters and few years. Triveni Power Transmission Limited, a wholly owned subsidiary of the company, has acquired a 100% stake in Triveni Power Transmission GmbH, a Swiss company. With the said acquisition, TPT GmbH becomes a subsidiary of TPTL, which is effectively a step-down subsidiary of TPTL. As far as the outlook is concerned, what can I share with you that will, as I mentioned, there were the two levers, and there are several other levers that will play a very critical role. There is a concerted effort to focus on large gearboxes, and we're receiving fantastic orders in the steam turbine segment. Gas turbines, of course, are reasonably large, but in the steam turbine segment and compressor segment of larger and larger units. Now, this is where the technical competence, etc., of Triveni gets recognized by our customers. There is a concerted effort to focus beyond steam turbines and our focus on compressors, gas turbines, and other high-speed gearboxes has been critical in terms of diversifying our product scope and supply. Design and development has taken on a new form, and I think there's been a huge amount of work that is being done right now, which where we expect impacts in the next financial year in terms of cost improvements and also reduction in terms of time and standardized models, the development of more standardized models to be able to further improve the manufacturing time of a lot of our gearboxes. From an IT perspective, and this is absolutely crucial, and this is also for all of Triveni, but I'll talk about a few extra things that are happening at Triveni Power Transmission. There's been a significant amount of development in the last quarter. For the group as a whole, there's a massive migration in terms of our enterprise resource planning solution that is happening, which will be over. It will allow us massive in terms of our digital advocacy and migration initiatives. It will allow us to be able to use data in a very powerful form by Q4. It will start, actually. The migration will end, and so our usefulness will start in Q4 of this financial year. However, at PBT, sorry, at TTB, we have two other important digital migration initiatives with respect to CRMs as well as a digital factory and the creation of digital twins that are underway, which will allow us really to be able to create enhanced levels of stickiness as far as our global customer base is concerned, allow us to be far, far more proactive in terms of responsiveness to our customers all the way from inquiry all the way to post-installation and commissioning management, etc., and allow us to have complete control of the manufacturing process in a way that we've had pretty good control, but it allows us to continuously enhance that control over manufacturing at my source. Looking very quickly at our water business, we are looking at new opportunities emerging in recycled reuse and zero liquid discharge and on an EPC and HAM basis. There are new projects that we are tendering for, and we're seeing more traction as far as water is concerned, more positive traction intended towards conclusion. I think that bodes well because it's been a long time coming. It's quite exciting to see that the water market is turning quite exciting. We are evaluating international opportunities and intend on participating in several more tenders in water and wastewater treatment projects internationally. At an overall level, the company has implemented a series of strategic and well-considered initiatives to tackle the key challenges across all of our business segments. We remain optimistic about delivering an improved performance in fiscal 2026, given all the various situations that our various businesses are incurring. Lastly, I'd like to comment on the scheme of arrangement, the proposed amalgamation with SSCL and the demerger of the power transmission business. The proposed scheme has been approved by the stock exchanges, and the process is obtaining approval of NCLT. The meetings of stakeholders under the NCLT process have been scheduled for the end of November and early December for the two companies, and that means that we're very much on track as far as I had said for this culmination in Q4 of this fiscal year. With that, I would now like to pause my opening comments and open up the floor for questions. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask questions may press star and one on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. First question is from Sanjay Manyal from Dam Capital. Please go ahead. Hi sir. I have a few questions. First is about the ethanol part. You have mentioned that maize ethanol margins have improved significantly. Firstly, in the first cycle, what is the amount of volumes we will be means we have been allocated? And out of that, how much is from the maize? And also, if you can sort of specify, are we making EBITDA, INR 8 EBITDA a liter after the decline in the maize prices? So Sanjay, I must say we do not give a breakup of what we have got, maize versus rice versus ethanol. But in answer to your second question, yes, we are making a higher margin than what you are anticipating. I would say 30%, 40%, 50%, even higher. Okay. Okay. Right. So my question was. Okay. So I mentioned INR 8. So what you're trying to say is that we probably will be making anywhere between INR 11-12 a liter from maize. Okay. Perfect. So from my capacity perspective, or rather from the allocation perspective, my question was regarding because you mentioned that the total capacity of ethanol is now 2,300 liters, if I'm not wrong. And given the fact that 20% ethanol would require not more than 1,200 crore liters and maybe another 250 odd crore from the ENA. So total demand will be 50. So most of the industry-level capacity utilization will not be more than 65%-70%. That's what my understanding is. So can we assume that your capacity is 26 crore liters? In that sense, you will also be running at similar levels of utilization? No. I think that's not correct. I think that we will be running at, you see, the total capacity as far as Triveni is concerned depends on whether you use maize or don't use maize. You have to factor that out. It depends on the proportion of maize that we actually convert during the year because that has, as you know, when you're using maize, it is 20% lower. Your capacities are 20% lower. When you're looking at 26 crore liters, it is not with maize. However, whatever portion you use with maize reduces it. We anticipate functioning at 100% capacity utilization. However, the margins in maize are actually very attractive. Therefore, we will, with the 60/40 rule, try and maximize what we can do with maize as well. Does that answer your question? Yes, sir. That was pretty helpful. My second part is on the sugar recovery. Although you mentioned it's an early time, it's just a week that you started your operations. If you can get a sense from the fact that you have changed the sugarcane variety in your catchment area from CO023A to the other newer varieties, what is your sense or what is your understanding that what kind of an improvement we can see in sugar recovery? Also, you mentioned that there has been a reallocation of the command area. What kind of an increase can we see in the sugarcane crushing in the current season? Okay. It's actually a combination of the two things. Without giving you an actual number, which I think you're alluding to a number, without giving you an actual number, let me talk about recovery first. Recovery is impacted by three very important factors. Okay? The first is rainfall and water. Okay? The water is untimely rains, and it is also flood water that impacts us in certain factories. As you know, and I've talked about this on previous calls, when we stand today, we've had a reasonably dry last 30 days. Okay? That's been very good. The last two years, actually, before the factories have started, we've had rains in the last 30 days before the season started, which has led to a lot of soil moisture and has still led to a little bit of weaker poles as cane comes. By and large, the drier start, I think, has been very good, and this year has been relatively drier. That is a positive attribute. The second is with respect to disease. Last year, we had some amount of red rot at a certain number of our factories. I talked about three of our factories having been impacted more than others and the remainder having been relatively unscathed. A lot of work had been done in terms of not just roguing, but replacement and taking out all these red rot clumps and actually getting farmers to plant other crops in that area so that the soil received a break, which is technically the system. I mean, if you have red rot, you're actually not supposed to plant sugarcane. You're supposed to plant something else and then return to sugarcane a year or so later. A lot of that has already happened, which means that the diseased cane that will be coming to the Triveni factories is a massive, massive reduction. I'm not saying that we've gotten rid of all red rot because we do have 238. And the 238 is, I forget the total percentage of 238. It's just under 40%. It's under 40%, but that's not necessarily a bad thing. Let me be very honest, especially as far as the high-lying areas are concerned. It is giving great recovery, and it is disease-free. We will slowly replace that as well. Not slowly, steadily replace that as well. The fact is that diseased cane is looking much, much lower, and the possibility everything is looking well within our limits. That is extremely positive right now, Sanjay. The third thing is best. We had unseasonal broods of top borers, and that impacted the crop last year. This year, in the early part of the growth season, we had some white fly infestation in one or two factories in West Uttar Pradesh, but that was treated with pesticides. It was no longer after we recognized it. We actually did mass-scale treatment, etc., through drones, through all sorts of different mechanisms and vehicles, etc. We've not had that incidence across all eight sugar units of borers or flies, etc. A relatively disease-free, majority disease-free, and a pest-free crop is what we're expecting this year. From that perspective, the recovery looks pretty good. We need to get all the factories to start. We need to start getting sugar to be able to give you accurate estimates of what the recoveries are. By and large, they're looking positive. I'm very hopeful that Ratoon will give a good recovery. I'm fairly certain that plant cane will be a much better recovery than it was last year. That's very important. When you look at recovery, you've got to look at both parts of it. You've got to look at Ratoon. We've got a great Ratoon crop. What does that mean? We're not going to start untimely crushing of plant cane, which is something that happened last year, negatively impacting recoveries, which is crushing immature cane early. That leads to a lower recovery as a season. This year, enough cane means we have enough Ratoon, and we have enough plant. The work that was done on plant means it's disease-free, it's pest-free so far. I have to add that caveat. That bodes very, very well. That's very good. Season started pretty much on time, and we're looking at a higher crush rate for the group, which will mean that we're not looking at essentially extending and dragging on the season into the very, very hot month, end of May, etc. That, again, is another reason for better crushing, better cost of production, and of course, better recovery. Thank you. Before we take the next question, a request to participants to please limit your questions to two per participant. The next question is from Shailesh Kanani from Centrum Broking. Please go ahead. Yes. Thanks for the opportunity. A couple of questions with respect to our deck. You mentioned that broadly, more than 3 million tons will be dire in all. In light of the current. I'm so sorry, Shailesh. Shailesh, I'm sorry to interrupt. You're not audible. Can you speak a little slower, please? Yeah. Better? Is my voice not audible? Go ahead. Go ahead, please. Yeah. My question was with respect to our deck assumption where we have mentioned that more than 3 million tons of sugar would be diverted towards ethanol. Just wondering in terms of the SAP price increase, does it make economic sense to do that, especially considering that ethanol prices have not risen for sugarcane stock? What's your view on that? Okay. Good question. It's over 3 million. 3.25 million is what we're looking at in terms of the diversion of sugar. SAP, as you are aware, is only both of the dish. The 3.25 million tons of sugar that gets diverted is nationwide. It includes Karnataka, Maharashtra, other states which do not pay UP SAP. They pay FRP, etc. Also, there are very stiff penalties for non-compliance. The OMCs actually exercise those penalties rigorously. I see very little risk in this number going down. If anything, I see this number actually going up because based on the INR 200 crore liters of R3 to R4 tenders and the split between grain and sugary-based feedstock ethanol manufacture, it could enhance that 3.25 a little bit more for the season. Perhaps take us up to about 3.4, 3.5 million tons. If my head 3.4, I think it could be as high as 3.5. Just to clarify, there would be some portion of UP assumption as well in this 3.25 odd, right? Correct. I do not see any danger of that not happening because of very stiff fines that are imposed by all marketing companies for non-delivery of ethanol. Just to get it right, economically, it will not make sense, but because we have entered into the contract, we will be doing it. That is what you're trying to say? No, that is not what I'm saying. That's not what I'm saying at all. You see, because I don't know how people have quoted for juice as far as Uttar Pradesh is concerned. I can't comment on their financials. Therefore, I am not making any comment on anybody's viability. What I am saying is that the diversion of Uttar Pradesh of the 3.25 million is approximately 0.7 million tons in Uttar Pradesh done by a few groups in the state. I don't see them because they are also supplying C-heavy molasses. They are also supplying B-heavy molasses and ethanol made from other sugary feedstocks. I don't see them putting their ethanol programs at risk. Plus, they have operating facilities. To shut it down and not supply means you're still incurring a substantial fixed cost. Rather than look at it from a profitability perspective, I'd rather look at it from a cost perspective. This makes sense to them from a cost perspective, and I don't see them, and the significant penalties that will be imposed for this large quantum of 0.7 million tons is actually detract, I mean, is a disincentive to millers in terms of non-compliance. Okay. Just to kind of close this loop on this, in your estimates, what would be the EBITDA per liter? The way you have mentioned about maize would be somewhere in the range of INR 11-12 per liter. If you can just give a ballpark assumption in terms of working back of the envelope, seeing the season and seeing the SEP prices right now, what would be the EBITDA in, say, juice, B-heavy, and C-heavy? As far as juice is concerned, we're not making juice. I can't offer you the EBITDA calculations for juice since we have not tendered for juice. Neither have we tendered for B-heavy. I imagine that B-heavy is going to give you something a little bit lower than maize right now, maybe INR 9 or INR 10. C-heavy molasses will give you north of INR 6. Okay. Okay. That's useful. Yeah, that's useful. That's useful. My second question is on the PTB division. Yes. This is the second quarter where we have seen slight slowdown in pickup activity. Can you throw some light further on what has happened? Because last time, you had mentioned that there were some deferrals from the client side in terms of execution. Are we getting impacted because of any other reasons which you would like to know? If you track the last 20 quarters of PBT, because we've always given PBIT results for the power transmission business, and if you track the last 20 quarters, you will always see that Q1 and Q2, Q1 more than Q2, is usually a little bit weak. Q1, while it came as a little bit of a surprise, Q2 is actually better. It is not in line with what I would like to be delivering, and I've recognized that straight off at the very start of this call, but it is still better than the previous corresponding quarter. From a profitability perspective, it is actually pretty good, to be absolutely honest. I see that with the orders that we have planned for Q3 and Q4, we're very much on track. I mentioned during my opening remarks that I stand behind my internal estimates. I've not shared it with you, my internal estimates for growth for this business, for this annual year. I anticipate that Q3 is going to be pretty good, and Q4 is going to be absolutely fantastic. That is just the way that classically, every year, it follows that type of a cycle. I do think that when we have more export business, when it becomes a very meaningful portion, then Q3 will become even more substantial because the year-end for our global customers is typically the calendar year-end. The more domestic business we have, the year-end is Q4. Therefore, to capture depreciation, people want delivery of their gearboxes in Q4 of the Indian financial year, which is March. You may see that dynamic over the next few years that will change, but I'm not concerned about the performance of the business. Thank you. Next question is from Tanuj Nangalia from SKP Securities. Please go ahead. Hi everyone. Could you please provide a brief overview of the ethanol production in liters at Triveni through the B-heavy, C-heavy route derived from a kg of cane? I'm afraid we don't provide those details. Okay. Okay. That's it. Thank you. Thank you. Next question is from Maulik Chaudhari from Monarch Networth Capital. Please go ahead. Hello sir, am I audible? Yes, you are. Hello. I have a few questions on our power transmission business. Particularly on the domestic side, over the last two to three quarters, our order inflows have been subdued. Could you please provide some clarity on this? Second, given our H1 order inflows were subdued, what kind of order inflow are you expecting in H2, both in domestic and export market? Third question is, could you share the breakup of current closing order book between short tenure and long tenure? Within long tenure, how much is attributed to defense? Absolutely. Let me answer your first question. As far as you see, I think it is important to also note that our large domestic OEMs have, at least the two large domestic OEMs in the steam turbine space, now converted their business to supply to the world from India. As a result, while there may have been some softness in Q1 and Q2, and there definitely was with respect to domestic order build-up, I think from a global perspective, things were moving along a little bit better. I do not see that the case. We are almost halfway through Q3. I think there has been a real change in the last five-six weeks in terms of domestic order inflows for domestic customers. For global customers, I think that is moving along reasonably well and rather swimmingly, frankly speaking. We do not give real breakups as far as this is concerned. Frankly speaking, we only find out whether the gearbox is going internationally or domestically a little bit late into the process. It is not right up front. I think that we are seeing a change in domestic demand, certainly. Yes, we are seeing a change in demand. We're seeing a change in demand domestically as well. Of course, internationally, I've already spoken about. Your second question, could you remind me of your second question? The breakup of closing order book between short tenure and long tenure? Oh, no. Yeah. I thought that was your third question. In terms of the breakup of short tenure and long tenure, as of September 26, our short tenure is INR 210 crore and long is INR 185 crore. Total is about INR 395 crore. The previous corresponding year, the shorter was INR 239 crore. The longer was INR 106 crore, about INR 345 crore. There has been an increase in the total order book of about 15% from quarter to quarter. Sir, within long tenure, how much is attributed to defense? As far as the long tenure, as far as that is concerned, the vast majority of that is defense. In the short tenure, there is very little defense. The exact numbers, you can perhaps contact us offline and we will share it with you. It is just that I do not have it on hand with me right now. Okay. Sure, sir. Thank you. Thank you. Next question is from Sanjay Manyal from DAM Capital. Please go ahead. Yes, sir. Just one question I have on the PDC business. I think this quarter, you have seen almost 400 basis points plus kind of a margin improvement. You have mentioned that this is because of the favorable product mix. What could be the normative margin in this business, EBIT or EBITDA margin? Specifically from the defense part, you will be commencing your facility in December. What can we expect from this defense facility, say, in FY 2027? What kind of an order we have with a bigger order if we have from the defense? What can we expect in FY 2027? For the half year, the power transmission business has a PBIT margin of about 36%. I think it is part of our results. It is given in terms of the segmental breakup. As far as does that answer your first question? Your second question, as far as defense is concerned, yes. A lot of the long-term order books that we have will get executed. The facility will be up and running in December of this year, which is exactly what I had mentioned three months ago when we spoke. I think in terms of what you can expect in the following year, while I do not give estimates in terms of production, I think it will go a long way to have a facility on the ground showcasing not just to the Navy and to the armed forces, but also to partners around the world. In our presentations and in our participation in global defense events and exhibitions, etc., we are seeing a lot of traction. I think that the fact that the facility will be off the ground will be a massive sales point in terms of attracting partners to us. Now, in terms of what does that mean for financial year 2026-2027, I think that is a very difficult subject. It is very difficult because defense orders now, with the way the world is, some of it, you are seeing a little bit more urgency. You're seeing a little more advancement of orders. You're seeing a little more acceleration. It's not necessarily everything long-term. You're seeing a lot of short-term stuff that is also coming up. It's very difficult to ascertain. It's a business that, because it's a younger business for us as well, these numbers can vary quite, quite dramatically. I'd be hesitant to give a number. To have the facility off the ground is a very, very big step in terms of the credibility, in terms of the footprint, and the manufacturing capability of our business. Right. Right. Understood. What I meant by this first question about 400 basis point improvement, we have seen a 41% kind of PBIT margin this year. We should not take this as a normalized should be 35%-36%, as you have mentioned in the first half. No, that's not what I mentioned. That's not what I'm saying at all. You're taking quarter and half year. Yes, the quarter was very good. We would like to deliver the best possible EBITDA margins. I think we're very much on track. 41% is very, very high. Okay? I think that is a tough ask, to be brutally honest. We do not necessarily have to reduce 500 basis points. I cannot give you a number, but certainly not 500 basis points. I think that is the strength of what I have talked about, about Rajiv and his team in terms of looking at products and services and looking at what we're dispatching and looking at the types of orders that we're taking in and dispatching from quarter to quarter. Surely, sir. This was helpful. Thank you. Thank you very much. Thank you very much. That was the last question in queue. I would now like to hand the conference over to the management team for closing comments. Ladies and gentlemen, thank you very much for joining us for the H1 Fiscal 2026 earnings call for Triveni Engineering & Industries Limited. I think the last few weeks have been very, very telling. We've had a bevy of news, some negative, some not negative, not positive. I think that has been factored in by the business. We've hit the ground running. I think we have done a lot of work, and we are more resilient today across sugar, alcohol, and engineering businesses than we've literally ever been. I'm very confident that going forward, we will be able to deliver the best possible results given some factors are beyond our control. Given that, I think we are in the best possible position that we've been in years in order to be able to give exceptional results across all of our businesses. I look forward to discussing our Q3 results with you in about three months' time. Feel free to contact Himanshu in case you have questions that have not been answered in this call. Thank you very much, and have a great weekend. Thank you very much. On behalf of Triveni Engineering & Industries Limited, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect your lines.