CG Power and Industrial Solutions Ltd
NSE:CGPOWER
US |
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
|
US |
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
|
US |
Bank of America Corp
NYSE:BAC
|
Banking
|
|
US |
Mastercard Inc
NYSE:MA
|
Technology
|
|
US |
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
|
US |
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
|
US |
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
|
US |
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
|
US |
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
|
US |
Visa Inc
NYSE:V
|
Technology
|
|
CN |
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
|
US |
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
|
US |
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
|
US |
Coca-Cola Co
NYSE:KO
|
Beverages
|
|
US |
Walmart Inc
NYSE:WMT
|
Retail
|
|
US |
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
52 Week Range |
424.6
852.7
|
Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
Johnson & Johnson
NYSE:JNJ
|
US | |
Berkshire Hathaway Inc
NYSE:BRK.A
|
US | |
Bank of America Corp
NYSE:BAC
|
US | |
Mastercard Inc
NYSE:MA
|
US | |
UnitedHealth Group Inc
NYSE:UNH
|
US | |
Exxon Mobil Corp
NYSE:XOM
|
US | |
Pfizer Inc
NYSE:PFE
|
US | |
Palantir Technologies Inc
NYSE:PLTR
|
US | |
Nike Inc
NYSE:NKE
|
US | |
Visa Inc
NYSE:V
|
US | |
Alibaba Group Holding Ltd
NYSE:BABA
|
CN | |
3M Co
NYSE:MMM
|
US | |
JPMorgan Chase & Co
NYSE:JPM
|
US | |
Coca-Cola Co
NYSE:KO
|
US | |
Walmart Inc
NYSE:WMT
|
US | |
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Earnings Call Analysis
Q1-2025 Analysis
CG Power and Industrial Solutions Ltd
In the first quarter of FY '25, CG Power and Industrial Solutions reported robust growth with sales increasing by 19% year-on-year to INR 2,106 crores. Profit before tax (PBT) saw an impressive rise of 27% to INR 323 crores compared to INR 256 crores in the same quarter last year. This marks the highest sales, EBITDA, and PBT recorded by the company in recent times. Margins improved to 15.4% from 14.5% last year, driven by higher realizations, a favorable product mix, and cost efficiencies in the Power Systems division.
The Industrial Systems segment experienced a modest growth with sales rising by 8% to INR 1,357 crores. However, its PBIT declined to INR 182 crores, yielding a margin of 13.4%, down from 15.7% last year. This contraction was attributed to a greater mix of lower-margin railway division sales and competitive pricing pressures. On the other hand, the Power Systems segment showed remarkable growth with sales surging by 47% to INR 750 crores. Its PBIT doubled to INR 149 crores, resulting in a margin of 19.9%, a significant improvement from 12.8% last year. This segment benefited from higher realizations, favorable product mix, increased exports, and cost efficiencies.
An encouraging aspect for the quarter was the unexecuted order book, which increased by 44% year-on-year to INR 7,054 crores. This indicates strong future prospects for the company. Free cash flow generated during the quarter stood at INR 63 crores. The return on capital employed (ROCE) was annualized at an impressive 39%, showcasing efficient use of capital and strong profitability.
On a consolidated basis, which includes operations from subsidiaries in Sweden, Germany, and the Netherlands, CG Power reported sales of INR 2,228 crores, a 19% increase year-on-year. The consolidated profit before tax was INR 336 crores, translating to a margin of 15.1%, up from 14% last year.
The company is set to acquire a 55% stake in GG Tronics Private Limited, a specialist in embedded systems and railway safety devices. This acquisition is expected to bolster CG Power's capabilities in the railway sector, particularly with the Kavach train collision avoidance system. Additionally, under the new leadership of Amar Kaul as Managing Director and CEO, following Natarajan Srinivasan's retirement, the company appears to be in a strong position to continue its growth trajectory.
The management expressed optimism about sustaining high margins in the Power Systems segment, projecting margins in the high teens (16%-18%) due to robust demand and favorable pricing dynamics. However, they cautioned that expecting similar margins in the subsequent quarters might be overly optimistic. The expansion in their capacity for power and distribution transformers is expected to be completed by the end of Q3, which will further strengthen their market position. Moreover, the company's strategic involvement in growing markets like locomotive and propulsion systems indicates a potential 20% market share in these segments.
Ladies and gentlemen, good day, and welcome to the CG Power Limited Q1 FY '25 Earnings Conference Call hosted by IIFL Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Gaurav Uttrani from IIFL Securities Limited. Thank you, and over to you, sir.
Thank you, Neha. Good evening, everyone. On behalf of IIFL Securities, I welcome everyone to CG Power and Industrial Solutions 1Q FY '25 Earnings Call. We have the pleasure of having with us the senior management team of CG Power, led by Mr. N. Srinivasan, Managing Director; Mr. Amar Kaul, Managing Director and CEO; Mr. Susheel Todi, Chief Financial Officer; Mr. Ramesh Kumar, President, Industrial Division; Mr. Mukul Srivastava, President, Power Systems; Mr. Ajay Jain, Vice President, Transformer Division; Mr. Chidambaram Balakrishnan, Vice President, Railway division.
Without much of a delay, I will now hand over the floor to the management for their opening remarks, which will be followed by a Q&A session. Over to you, sir.
Good afternoon, ladies and gentlemen. Let me first extend a warm welcome to you for this Q1 FY '25 earnings call. This is Natarajan Srinivasan, Managing Director of the company. I would like to briefly mention that as you -- all of you may know that this is my last day at the company, I'm retiring at the end of the day. And Amar Kaul has joined us to be -- to succeed me, and he'll be the Managing Director and CEO from tomorrow. He is also with me -- along with me in this call. The rest of the executives who have been with me are Ramesh Kumar, Mukul Srivastava, Ajay Jain, Chidambaram Balakrishnan and Susheel Todi, and they have already been introduced to you by the earlier speaker.
Company performance. Q1 FY 2024/2025, sales grew by about 19% and profit before tax grew by about 27%. Aggregate sales for the quarter were higher at INR 2,106 crores, recording a growth of 19% year-on-year. PBT was higher at INR 323 crores as against INR 256 crores in FY '24, recording a growth of 27%.
Sales, EBITDA and PBT achieved in Q1 of FY '25 is the highest ever recorded in a quarter in recent times. Margins are higher year-on-year at 15.4% of sales as against 14.5% of sales last year on account of higher realization, favorable product mix and cost efficiencies in Power Systems. Free cash flow generated during the quarter was about INR 63 crores. Return on capital employed annualized stood at 39%.
Another highlight for this quarter is the unexecuted order book, which as on June 30, 2024, was 44% higher year-on-year at INR 7,054 crores as against INR 4,909 crores as on June 30, 2023.
Segment-wise performance, Industrial Systems. Aggregate sales for the quarter were higher at INR 1,357 crores, recording a growth of 8% year-on-year. PBIT was just INR 182 crores at 13.4% of sales up against INR 197 crores at 15.7% of sales in Q1 of FY '24. Margins were lower year-on-year on account of higher mix of railway division and prices awarded in tender being lower due to competitive bidding. Unexecuted order book as on June 30, 2024, was 20% higher year-on-year at INR 2,451 crores compared to INR 2,036 crores as on June 30, 2023.
Power Systems. Aggregate sales for the quarter were higher at INR 750 crores, recording a growth of 47% year-on-year. PBIT was about INR 149 crores at 19.9% of sales as against INR 63 crores at 12.8% of sales in Q1 FY '24. Margins are higher year-on-year on account of higher realization, favorable product mix, higher exports and cost efficiencies. Unexecuted order book as on June 30, 2024, was 60% higher year-on-year at INR 4,603 crores as against INR 2,874 crores as of June 30, 2023.
Consolidated financial results. Consolidated results include performance of the operating subsidiaries of Sweden, Germany and Netherlands drive such an automation Europe. CG Adhesive products India, CG Semi-private Limited India and other nonoperating holding subsidiaries. Aggregate sales for the quarter were higher at INR 2,228 crores, recording a growth of 19% year-on-year. Profit before tax was INR 336 crores at 15.1% of sales in Q1 of FY '25 as against INR 263 crores at 14% of sales in Q1 of FY '24.
Unaudited financial statements with detailed notes are available as part of the stock exchange filing in the company's website, www.cgglobal.com. Today, our Board of Directors also approved the proposal to acquire 55% stake in a company called GG Tronics Private Limited, a company specializing in embedded systems, safety and the supplier to railways. The company also has got 1 of the 4 companies which are approved for supplying Kavach. The Kavach system is just the train collision avoidance systems. We signed definitive agreements about the acquisition, and then we hope to complete this within a month's time.
Lastly, as I mentioned earlier, I am -- this will be my last day here. And the company is again in safe hands with Amar Kaul, who will sail the ship variably. I thank you for all your support to me and to my team, as always, and I am sure will continue to extend the same to Amar. Thank you. Me and my colleagues will be happy to answer the questions.
[Operator Instructions] The first question is from the line of Ravi Swaminathan from Avendus Spark.
Congrats on a very good set of numbers. My first question is, sir, if you could talk about more on the Industrial Systems business. How the performance was there during the quarter? I mean I noticed that there has been an 8% top line growth. And how the individual subsegments would have performed? Both from a volume-wise and realization-wise, how it would have moved? Individual subsegment means I am talking about the low-tension motor, high-tension motor, the railways portion of the Industrial Systems business.
In the press release, you had mentioned that there was a bit of competing in terms of pricing going down. So if you can talk about that more. And also how -- whether elections had impacted this quarter. And incrementally, how outlook is for this?
So, I think Ravi, actually you know that we don't give breakup separately for railways and motors and also the subsegment of the motors, how much is LT motors, how much is LIM, et cetera.
So probably now, as I mentioned to you, the railway business, our volumes have been good. I have also gone on record that this year, we will be able to grow at least 40% compared to last year based on the tender that has been awarded.
In the railway tenders, in some of the products, you may get a lower price. Some of the products, you may get a reasonable price. And then where due to competitive intensity, the price awarded was lower. This quarter has so happened that some of the products we, despite, I think, the margins were a little compressed because -- primarily because under the tender system, you have to match the L1 price if you are given the order.
On account of this, the margins are a little lower, a little lower compared to last year. Last year, Q1 and Q2 was very good for motors. Whereas this year, it is not so. That will explain the less than perhaps, I would say, a little bit of a sub-optimality in this performance of this division.
When the [indiscernible] motors will come back. This quarter, obviously, as you rightly said, this demand has been a little bit impacted on account of the elections. It is -- guess what, my estimation and our team feels that probably in H2, the business can do much better than what we are doing right now.
Okay. At the LT motor level, is it safe to assume that it would have been a double-digit volume growth and it's more of realization, which has been the culprit this time?
Yes, you are right. But [indiscernible] number, I will be able -- not be able to tell you because even not yet published the first quarter results. But if you see up to March, the market is also growing by double digit and we are also growing by double digit as far as volume is concerned -- volume in both quantity as well as kilowatt. But the price realization is the culprit.
Okay. Understood, sir. And in terms of efforts and drives, if you can talk about, will -- can that be a big driver of growth in the motor business?
[indiscernible] definitely can be a big driver. But all the growth cannot come in 1 year. We are taking steps to grow the business over a period of 2 to 3 years. At least 3 to 4 years, I think we want to scale up the business considerably. So I can't commit to any number.
The next question is from the line of Rahul Gajare from Haitong Securities.
Mr. Natarajan, firstly, let me thank you for driving the company to this level over the past few years. I really appreciate your contribution to the company.
Thank you, thank you.
So my first question is continuing on the earlier participant on the industrial business. Now this business has seen pressure on margin because of the price. While margin in Q4 and Q1 is at similar levels, so does that -- I mean can we incur that the price decline has stopped? Is that a right assessment of the performance in the motor business?
So, I think margin is a combination of 2 factors. One is the unit price realization. Second is the input cost. Either way, the margins can get impacted. As of now, I think we have been able to maintain more or less the margins we recorded in Q4 and generally feel that from here, margins can only look up. I don't see the reason for margins to go down from here.
Okay. So there is no further price decline, at least what we have seen in the first quarter. I think that is something which one can infer very clearly over here.
Yes, you are right.
Okay. Sir, my second question is on the railway acquisition of G.G. Tronics. Now, can you talk about the opportunity that covered system will throw for the company? And also if the the company, G.G. Tronics is already working on other areas besides Kavach? Or this is the only forte that this acquisition will help the railway business?
So, G.G. Tronics is one of the four companies, which have been approved for Kavach. Apart from Kavach, they are a very leading supplier of diesel axle counter for which -- in which they hold about anything between 40% to 45% market share. But the turnover of the company in that segment is only about INR 100 cr, INR 110 crores, but it was the profitable company.
But much of the big growth can come from Kavach. Actually, you must have seen -- you must have read the statement from the Minister, Railway minister, after the budget. In this budget, actually totally about INR 2,55,000 crores has been allocated. And the minister has clearly said that this money is going to come -- going to be allocated. Primarily, a large part of the chunk, there is also a specific statement saying Kavach will get a large allocation.
See, the intentions of the government is just primarily focused on safety with a couple of actions taking place. Earlier, they wanted to do about 5,000 kilometers in a year, probably that may get accelerated. So we see, going by this, I think this company can get about 20% market share. And with our -- joining them actually in terms of capability, financial support.
And then we also have some of our propulsion systems and whatever we have done through EPC, et cetera, have got some credence with the railway tendering system, our eligibility criteria. The 20% market share, I think if this company is able to get -- to start with, I think this can be a good opportunity. In addition to that, actually we like to work with them. The company has got a lot of capabilities in the embedded systems, power electronics. So we will -- going forward, we work with them to see what are the other areas we can do. But covers will be a March, which will be a big driver of growth for this company going forward.
Sure. Sir, my last question is on the OSAT business. Is there any progress that you would like to highlight to us on that particular business?
So what are actually right now, it is only in the stage of commencing the construction work. So, now only activities are picking up. We have appointed a senior team and then tendering, et cetera is being resorted to. Maybe it will take another one more quarter to start the project activities in full swing. Over 18 to 24 months, our target is to complete the project. I think it is a little early. Maybe by last quarter, we will be able to tell you some more progress and things like that.
The next question is from the line of Bhoomika Nair from DAM Capital.
Congratulations on a good set of numbers on the acquisition. So the first question is on the Industrial Motors. We were looking at exports and how is that progressing? Any initial orders that we've got, if you can just talk about that aspect?
Yes, Bhoomika. Ramesh here. See, actually, we try. But if you see, the Europe market has been a little sluggish now. So whatever we have been getting earlier, we are continuing to get that, but the acceleration has not happened to the extent what we have planned in quarter 1. And we are also now putting our people there in different locations and hoping that things will improve if market also improves.
Okay. Okay. Sir, the other part of HD Motors. We spoke about LT Motors. But can you comment about how HD Motors is progressing? We had got some NPCL related orders, et cetera, earlier on. How is the progress in terms of ramp-up? What is our market share now for HD motors?
The market share is that we are at 20% closing March last year. As I said earlier also, [indiscernible] first quarter figures have not yet been published. But I can say that HD motors' requirements in the market are the inquiries are much better than the LT motor. And if you see our performance in quarter 1 as far as order intake is concerned, percentage-wise, our HD motors is more than the LT motors. So 20% growth [indiscernible] seen in the motors compared to March last quarter.
20% order inflow in the first quarter versus March quarter, 2Q?
Compared to March.
For HD Motors?
For motors as a whole.
For motors as a whole?
Yes.
Okay. Okay. Okay. Because your order book seems to be more or less stable between March and now, so understood.
Sir, in terms of the power system now, this quarter was a very strong quarter, both in terms of top line has also margin expansion. Now, we've seen quarter-on-quarter improvement in margins going from single digits to about close to 20%. Now, how much of this or this something which is sustainable and for the operating [indiscernible] would be fairly high given high utilization? So if you can talk about what is our utilization levels on the current plan and some sense on margins, how one can look at once new plants are operational by the end of the year?
So I think we have talked about margins a number of times. Nobody can predict the trend of margins. And secondly, for you to expect this kind of margins to prevail in the next 2, 3 quarters is extremely optimistic.
This quarter, for various reasons, then all the factors seen -- we have discussed this earlier. In transformer and switchgear, each order will have a different margin. You'll get some export orders or something you supply suddenly in a very good delivery time, et cetera, you get some special price. Therefore, each order will determine the contribution and margins in this business.
So current quarter, everything has been favorable to us. Therefore, I don't expect this margin to continue. But nevertheless, margins will be good. That's all I can say. I don't put any number. Margins [indiscernible] the industry, both power and switchgear, the industry is in a very strong footing. Our overall order book has gone. Demand is good. Trains and railway stations are better. Margins are expected to be good. But I can't confirm that the same margins will continue.
Coming to your second question. The capacity utilization, of course, is to the maximum. We are operating at 90% capacity. And as you know, this -- both the business as an expansion. By the end of Q3, we hope to complete the power transformer and the distribution transformer expansion. Switchgear expansion will get completed in the next financial year. Therefore, capacity utilization even for the enhanced capacity, the order book seems to be good that we can easily service them, therefore, can maintain the capacity utilization even for the -- even post expansion.
Understood. Understood. And sir, my last question is on the acquisition. Quite heartening to see this new business line and if it really help in terms of the medium to long term. Sir, any numbers we can give in terms of its -- what is the development in order size? What is the current order book looking like? While obviously, the pipeline is very strong, any numbers on that aspect? And if also -- if you can get any debt numbers if it has any?
So the railways have not yet released the tenders for Kavach. We don't know what -- except the statement made by the ministers that Kavach will get a higher allocation, and then -- which means more stations will be covered, and then higher volume of tenders will be released. Without that, I'm not in a position to give you any number. But I already indicated whatever value for which tenders are released, we may be able to be targeting to get about 20% at least market share.
Sure. And [indiscernible] both loco and the track systems covered systems?
Yes, correct.
[Operator Instructions] The next question is from the line of Harshit Patel from Equirus Securities.
Sir, my first question is with respect to Power Systems. Almost all the major companies operating in the transformers and switchgears, they're expanding the capacities at the moment. So do you think favorable pricing scenario will continue next year as well when all this capacity will come on board?
So the orders are booked for power transformers one in advance. Whatever we want to supply next year, I must get the orders booked now during this year or the next one or two quarters.
Going by the present trend, the price realizations, whatever we are getting can continue. So if it continues and get the orders this year, then the realization will prevail for next year. Year after, we cannot say now, we'll take some more time. But overall, the demand supply mismatch and then more demand and lesser supply and then timing mismatch, et cetera, are there. So I'm confident that the industry will be able to maintain its profitability for the next 3 years at least.
Understood, sir. My second question is with respect to motors. What would be the share of IE3 and IE4 motors in our overall sales? And how are the margins were different, vis-a-vis, our standard IE2 motors?
So one thing, the [indiscernible] has not yet published the complete details relating to IE3, IE4. Therefore, we may not be able to -- we are not in a position to find out what will be our market share in these segments exactly. And we don't share margins, product-wise, IE3 how much, IE4 how much, IE2 how much, we don't. We don't share those data.
If not market share, if you could share that what is the contribution of these IE3 and IE4 in our own overall sales, then that will be also very helpful.
I think right now, it's about 15%.
15% in IE4 and about 35% in IE3.
Yes.
Close to 45% to 50%.
Between these 2, probably it's about 40%.
The next question is from the line of Subhadip Mitra from Nuvama.
My first question is you did mention that 20% kind of margins, which is what we are seeing in Power will be sustainable going ahead. But what we do understand is with the kind of pricing benefit that you see probably across the transformer space, would you reckon that a high-teen kind of a margin is sustainable? High teens, somewhere in the high teens.
So it's sustainable. I mean, likely, but I can't commit to a number. Then you will ask me, you said 18%. See, I told you there are a number of factors which influence margins.
As I said, in terms of exports, it depends on realization, then some orders we get price variation, plus we -- so therefore, we cover some orders, we don't get price variation class, suddenly prices go up. But overall I think -- so it's not this much, high teen. I don't know what you mean the high teens. It may be 16%, 17%, 18%. It's quite possible, I would say.
Understood. So sir, secondly, also on the industrial and the railway side, right? Like while the margins have been relatively weaker. And you also mentioned that you are anticipating that there will be some recovery in the second half. So can we assume that margins will probably start looking better? Or is this more of order inflow and revenues that [indiscernible]?
There are some disturbance in your line. I couldn't follow your question. Second, in H2, we are expecting recovery. So, what was the other part actually.
So, is the recovery expected on the order influence revenues or the recovery is on the margin, sir?
So I think once the demand picks up, margins will automatically improve.
Understood. And last question is on the railway [indiscernible] . I think you mentioned the 20% potential market share that you're targeting for covers. Can we anticipate that also for the larger locomotive as well as the propulsion system same-site orders that are supposed to come where now you have almost everything under one roof. Would you be looking at a similar market share there as well?
So that is our assumption. That is our assumption based on that we've evaluated. I think it is possible.
So where can the railway revenues grow, let's say, over a 2- to 3-year period according to you?
2- to 3-year period, it's all railways in every business is based on tender. How success -- railways normally give the tender only for one year. And then you know, so for next year, this year, we are able to comment that we grow 40% because of these orders we bagged. So how do you expect me to say for next year and the year after? I think the same trend continues.
I mean, normally, we're used to say 15% growth. But there are other things, various things we are working out. But if something clicks, we can grow better. So I won't be able to comment at this stage. So you understand now. So it depends on the tender, how much volume of tender, the railways quote and how much we are successful. So it's very difficult to say where the business can grow. But I think minimum worth 15%. And this year, we have done 40%. So we would like to keep quiet with just 10%, 15% and let us see how things pan out.
The next question is from the line of Mahesh Bendre from LIC Mutual Fund.
Sir, I just wanted to know what is the lead time for the...
Sorry, interrupt you, sir. I request you to use the handset, please.
Yes. I'm audible now?
Yes.
Sir, just wanted to know what is the lead time for 400 kv transformer right now? I mean, if delivery is placed today, in what period time it is being delivered?
So Ajay, are you on the call? Ajay?
Yes. Yes, sir.
Sir, please answer this question.
Yes. So the current delivery period for the 400 kV transformer is around 18 months.
So, sir, what was -- in this timeframe, maybe one year back, I mean, just trying to understand the delivery schedule.
Yes, one year back, CG was delivering in around 15 months. But the industry was still delivering 18 months only.
The next question is from the line of [ Umesh Valera ] from [indiscernible] Investing.
I want to ask what is the progress of camera lenses for Apple. There was 1 news. Is there any progress?
So this may be pertaining to your question relating to two businessmen sir, not us.
Because there was news that [indiscernible].
You have to ask two businessmen sir. We can only answer questions on CG.
Okay. Okay. And how much contribution from Vande Bharat train in railway business?
It's a very general question. So if you ask me anything specific, we have a trial order which we are executing. Other than that, no new tenders have come.
Okay. And what is the percentage of contribution from this power system? What is the transformer and what is switchgear?
We don't give this breakup.
Any growth number?
Growth. I think in the Power Systems business, in this quarter, have grown roughly about 47% in terms of sales. And in terms of EBITDA and PBT, we have grown year-on-year very substantially, more than 100%, both in EBITDA and PBT.
Okay. And last question, is there any plan for making 800 kv [indiscernible] in India?
So Mukul, if you want to answer. Can you answer this question?
Yes, sir. As of now, we are focusing up to 400 kv. 800 kv is not that higher demand. So we will evaluate it after 18 months.
[Operator Instructions] The next question is from the line of [indiscernible] Singh from ICICI Securities.
Congratulations on the great results. I have a couple of questions. I can be observed an unusually high current tax figure of around INR 50.6 crore, which as opposed to only INR 2.6 crores from last year. So what can this number be related to?
[indiscernible]. No, this is the -- you are talking about the current tax?
The current tax, yes.
Tax. So we are now till FY '23/'24, we had some losses. That loss is now getting absorbed fully for this year. So we'll start paying now tax for the shareholders after setting up all the losses.
Okay. Okay. Fair enough. And also, what would be your guidance for FY '25?
Guidance on what? We don't give guidance. Guidance on what you are expecting?
In general, with the synergy between your business, between your revenue and order books and all of that.
No. Order book is currently has grown by 44%. And then we are at INR 7,000 crores. It will take time. We can't execute all this in this year. Therefore, we are very comfortably placed in terms of order book, then the inquiries are very strong in power business. More than INR 13,000 to INR 14,000 crore inquiries are there.
And then railways have already said, they'll give tender -- they will decide the tender only for one year in advance. I will be going on record, we'll grow by 40%. So what else you require? For this year, we have already on the top line. You know our margins. We have discussed all this, then you can test of it, you can calculate for yourself.
Okay. And a follow-on question, judging by the order book mentioned in your results. Will it be fair to assume that the order inflows for your company are around INR 16 billion, that is INR 1,600 crores, for the Power Systems and around INR 1,400 crores for the Industrial Systems for a total of INR 3,000 crores?
For order inflow you're talking?
Yes, order inflow.
Inflow is right.
The next question is from the line of Amit Mahawar from UBS.
Congratulations on great results. Sir, I have two broad questions. First is maybe Ajay and Mukul also can help here. If you look at the global power transmission equipment cycle and even the market in India, we are hardly like 12 to 15 months into the order book buildup that we've seen, both globally and 4 to 5 large players in India, including CG.
You broadly announced the expansion of Transformer 6 years, which started in the next 6 months to 8 months. Do you think in the next 6 to 8 months, you have to review to the next round of expansion? Because as you take orders, you will have to basically project next 2 to 3 years. So, do you think there's a scenario where you will have expansions in the next 6 to 8 months? Next round on these capacity because this takes time. How much it take time?
If your question is that are we looking at any further expansion in these -- for the segments, am I right?
Yes.
So we are constantly evaluating this, and no decision has been taken. So without that, I will not be able to say anything. But we are constantly evaluating which segments, how much we should expand, whether we should look at, what are the opportunities, et cetera.
Fair point, sir. So broadly INR 500 crores, INR 540 crores is the exports that we had last year, and you have guided for like 20% of revenues in the next 4 to 5 years from export market. Broadly, can you help us summarize how much will be industrial export because [indiscernible] something which is the history in terms of export track record largely been transformed [indiscernible] years. So how will we look at both the segments in the next 4 to 5 years? And broadly, in terms of specification, which markets are you looking at?
So I think -- see, for transformer and switchgear, export will depend upon how much is the local demand? How much is the orders we have booked and where it is advantageous to sell? So we see domestic demand quite strong, and we have been very selective on export orders. We can't do exports at the cost of losing domestic market share. This is the position with respect to transformer and switchgear is concerned.
Even though there can be large opportunities for transformer and switchgear, several examples. So, for example, the Ukraine starts rebuilding, 100% of the production can be driven by them itself, that is that kind of an opportunity. But, the large -- on of the other also, I would say, which lists are the target, which we are working on is to the motors. When we complete the expansion of motors, then I think we would like to increase the share of exports in motors to start with for 5%, 10%, 15% and maybe up to 20% over a period of 4 to 5 years. This is the overall big picture to which we are working.
Well done. But if you talk about motors, say, IE3, IE4, without variable frequency trials, configurations, how do we strategize bridging book together? Will we have some expansions in the [indiscernible] portfolio or some tie-up globally? Any color from the segment had this [indiscernible].
So we are taking significant steps to increase our presence in price. It can be -- the exact strategy is [indiscernible], but this is a priority area for us. We are -- for the last few months, we have been working on finalizing the strategy to how to improve our volumes? How to increase our sales and the production. So, so many options are being worked out, but you will see some action here. As and when something is finalized and approved at the Board level, we will be able to communicate. But you can be assured that this is a growing drive business around with them also building it as a combo along with motors is one of the strategies, which certainly we are following.
Sir, if you allow me, can I ask one last small question on G.G. Tronics.
Yes.
Yes. Broadly, we have around INR 14 billion turnover on the rail portfolio, largely around professional equipment, not [indiscernible].
Hello? I think we have lost him.
Mohit Kumar, your line has been unmuted.
This is Mohit from ICICI Securities. My first question is on the railway systems. If I see the pipeline on the website, the tender pipeline is quite healthy for railways. In fact, we have transit commericial system, we have local, we have customers and we have [indiscernible]. So a lot of that. Good thing this pipeline is quite robust compared to the last year? And can we participate in the supply of the transit propulsion systems?
Yes. We already have a developmental order. We are almost ready with the prototype for the train sets, which will include transformer, motor and several other accessories along with the propulsion system. So we hope we'll be shipping it out to Indian railways in the first quarter next year.
No, my question was that there is a tender, which is out there. [indiscernible] for sleeper set of INR 32 billion. Can we participate?
Yes, we will participate.
And my second question is the pipeline for the propulsion equipment, traction electrics, transformers is looking very high. It's around INR 80 billion -- INR 8,000 crores. Do you think this number is much, much higher than compared to the last year at the same time?
Yes, it is increased because the volume of production they are planning this year is higher than last year. They were originally making 1,100 to 1,200 locomotives. This year, they are targeting around 1,500 locomotives.
Understood, sir. My second question is what is the breakup of current order book of past systems? I mean between power transformer, distribution transformer? And how is the inquiry in power transformer in particular, is it compared to last year? If you can give some color?
We can -- I can't give you the breakup, but the inquiries are higher than last year.
Sir, anything on the part [indiscernible] transformers separately?
We don't share this data.
[Operator Instructions] The next question is from the line of John [indiscernible] from 360 ONE.
First of all, congratulations on a great tenure. Sir, my question is regarding you mentioned 8% is the top line growth that we're expecting and 40% is based on the railway tender that was awarded. Am I right?
No. So you're not audible. Railways, we said in the beginning last call, I had said that we will be able to grow up to 40% this year. That's what I mentioned.
And what is the top line growth that we had in this quarter, sir, percentage?
For railways you are talking?
No, overall sir.
So Overall, we have given in our press release, we have grown sales by about 19% and PBT by 27% for the company as a whole.
The next question is from the line of Aditya Mongia from Kotak Securities.
Just wanted to kind of get some more color on this comment made on the number of locomotives going up from the run rate about 1,100 locos to about 1,500. What is driving this growth? And will there be further growth beyond this number? Is this number sustainable? Could you give some color on that?
So this is something, which you have to check with the railways. We don't get -- what is available from the railway sources, we have said. We can't have any further information on this.
The next question is from the line of Rajesh Vora from Jainmay Venture.
Congrats on a good set of numbers, and especially commendable performance by outgoing MD, Mr. Srinivasan. Under your leadership, company achieved terrific turnaround and was [indiscernible] Value creation for the public as well as shareholders. So, job well done. .
Thank you. The credit goes to my entire team.
I also welcome Mr. Amar, the new CEO. If he could give maybe a quick brief about how he looks at the CG Power? How does he want to sort of take it to next growth or [indiscernible] possible.
I think you know he's just joined only about a few days back. He joined on 9th, actually. So I think it's unfair to ask. He's very much there, but I can answer on this.
I understand. So I have one question on EV Motors. I find that CG Power has received IRQS certification [indiscernible] applications. So could you give some color on [indiscernible] Motors?
Those kind of certifications, we have started working at the back end. When our product is ready, we should be ready with our plant where we don't need to waste time. But at the same time, we have already started working on 2 products. One is 3-wheeler cargo as well as the LTV. We are in advanced stage of protos and testing.
Okay. So when do we see our motors being used on a commercial scale? Is it 1 year down the road, a couple of years down the road? Any rough idea?
Yes, approximately a year down the line.
Ladies and gentlemen, we'll take this as the last question. I now hand the conference over to Mr. Gaurav Uttrani from IIFL Securities Limited for closing comments.
Thank you Neha. On behalf of IIFL Securities, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.
Yes. Thank you so much to all of you. Thank you.
Thank you. On behalf of IIFL Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.