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CG Power and Industrial Solutions Ltd
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Ladies and gentlemen, good day, and welcome to the CG Power and Industrial Solutions Q4 FY '23 Earnings Conference Call hosted by DAM Capital Advisors Limited. As a reminder, all participants' clients will be in a listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions]Ă‚Â Please note this conference is being recorded. I'll now hand the conference over to Ms. Bhoomika Nair from DAM Capital. Thank you, and over to you, Ms. Nair.
Yes. Thanks. Good evening, everyone. And on behalf of DAM Capital, I would like to welcome you to the Q4 FY '23 Earnings Call of CG Power and Industrial Solutions. We have the senior management today being represented by Mr. Natarajan Srinivasan, Managing Director; Mr. Susheel Todi, CFO; Mr. Ramesh Kumar, President Industrial Division; Mr. Mukul Shiwaavar, President, Power Systems; and Mr. Ranjan Singh, Executive Vice President, Railways. I'll now hand over the floor to Mr. Srinivasan for his initial remarks, post which we'll open up the floor for Q&A. Over to you, sir.
Thank you, Bhoomika. Good afternoon, ladies and gentlemen. Let me first extend a warm welcome to you all for this Q4 and FY '23 Annual Earnings Call. I'm Natarajan Srinivasan, Managing Director of the company. I would like to introduce my colleagues who are with me on this call; Ramesh Kumar, President, Industrial Division; Mukul Shiwaavar, President Power Systems is on the call, Ranjan Singh, Railways Business; Susheel Todi, CFO of the company. The company performance. I will be covering both FY 2023 as well as Q4 FY 2022, '23. Stand-alone revenue and PBT before exceptional items recorded in FY 2023 is the highest in the last 11 years. All the businesses grew significantly over the last year with good margins. Order book on hand as on 31st March 2023 aggregate to INR 4,319 crores.Q4 performance. Aggregate sales for the quarter were higher at INR 1,288 crores, recording a growth of 27% year-on-year and 9% quarter-on-quarter. Profit before tax was INR 252 crores, 14.1% of sales in Q4 of FY '23 as against INR 131 crores, 9.3% of sales in Q4 of FY '22, INR 274 crores, 16.6% of sales in Q3 of FY '23. Margins were higher year-on-year on account of volume growth, softening input costs and procurement efficiencies. The free cash flow generated for the quarter was INR 263 crores. Order intake for Q4 of FY '23 was INR 2,073 crores. And our magical order book as on 31st March 2023 or INR 419 crores. This represents about 22% growth year-on-year. FY '23 performance. Aggregate sales for the year were higher at 6,580 crores, recording a growth of 28% year-on-year. Profit before tax was INR 97 crores in FY '23 as against INR 502 crores in FY '22. Margins were higher year-on-year on account of volume growth, higher sales revelation, procurement efficiencies, and higher other income. ROE for FY '22 was 47% against 34% in FY '22. The free cash flow generated for the year was INR 749 crores. Order intake for FY '23 was INR 7,848 crores.Q4 performance. Industrial Systems Q4 performance. Aggregate sales for the quarter was higher at INR 1,193 crores, recording a growth of 23% year-on-year and 3% quarter-on-quarter. Profit before interest and tax was INR 188 crores in Q4 FY '23 as against INR 135 crores in Q4 of FY '22 and INR 250 crores in Q3 of FY '23. Margins were higher year-on-year on account of higher volumes, softening input costs, and procurement efficiencies. Sequentially, margins were lower due to product mix, [indiscernible] orders, and higher input costs. Order intake for Q4 FY '23 was INR 1,436 crores, and unexecuted order book as on March 2023 was INR 2,040 crores. FY '23 performance. Aggregate sales for the year were higher at INR 4,538 crores, recording a growth of 25% year-on-year. Profit before interest and tax was at INR 438 crores in FY '23 as against INR 464 crores in FY '22. Margins were higher year-on-year on account of higher volumes, better price realization, softening input costs, and procurement expenses. Order intake for FY '23 was INR 4,763 crores. Power Systems. Q4 performance. Aggregate sales for the quarter were higher at INR 590 crores, recording a growth of 32% year-on-year and 23% quarter-on-quarter. Profit before interest and tax was at INR 75 crores in Q4 of FY '23 as against INR 27 crores in Q4 FY '22 and INR 57 crores in Q3 of FY '23. Margins were significantly higher year-on-year on account of higher volumes and a favorable product mix. Further, there are one-time warranty provisions in Q4 of FY '22. Order intake for Q4 of FY '23 was INR 637 crores, and unexecuted order book as on 31st March 2023 was INR 2,017 crores, 46% higher year-on-year. FY '23 performance. Aggregate sales for the year were higher at INR 2,023 crores, recording a growth of 33% year-on-year. Profit before interest and tax was INR 227 crores in FY '23 as against INR 145 crores in FY '22. Margins were higher year-on-year on account of higher volumes, softening input costs, and procurement expenses. Order intake for FY '23 was INR 2,865 crores, representing a 33% growth year-on-year. Consolidated results. Consolidated results include the performance of operating subsidiaries at Sweden, Germany, and the Netherlands, then mainly drives and automation in Europe and other nonoperating holding subsidiaries. The company has decided to divest its investment in a wholly on subsidiary [indiscernible] in U.S.A. and has engaged a third party defined as suitable buyer and personally expects to complete the divestment in the year 2023, '24. [indiscernible] non-current asset sales for sale and discontinued operations, the operations of the subsidiary, including its assets, liabilities, and net results, are disclosed as discontinuing operations. Q4 performance. Aggregate sales for the quarter were higher at INR 1,903 crores, recording a growth of 28% year-on-year, 9% quarter-on-quarter. Profit before tax was INR 262 crores in Q4 of FY '23 as against INR 135 crores in Q4 of FY '22 and INR 285 crores in Q3 of FY '23. Unattributed order books of drives and automation Europe as on March 31, 2023, was INR 138 crores.FY '23 performance. Aggregate sales for the year was higher at INR 6,973 crores, recording a growth of 27% year-on-year. Profit before tax was at INR 950 crores in FY '23 as against INR 504 crores in FY '22. Summary. FY 2023 was another record-breaking year, and the company built on its tills and delivered across financial and operational parameters. Several loan marks were achieved by the business, highest ever sales with the Motor Division, higher sales with the Railways Division, and highest ever order booking for the Transformer division. The company also during the year declared and paid interim dividends after a GAAP of 7 years. The company prepaid all its remaining term rounds of INR 100 crores and redeemed the non-CDs outstanding, and has become debt-free. The Board of Directors also approved a proposal to expand the manufacturing capacity of motors at its plants in [indiscernible] INR 230 crores and for transformers at its plant in Bhopal and Malanpur, an investment of INR 126 crores. The India ratings upgraded the company's long-term rating to AA and also the short-term rating to A1 plus. With that, myself and my colleagues will be happy to answer any questions. Thank you.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question-and-answer session.[Operator Instructions]Ă‚Â Take your first question from the line of Nitin Arora from Axis Mutual Fund.
The first question, if you can throw some of your comments on the order intake because when we met at the analyst meeting, which you conducted, you talked about order intake continues to be strong, and broad-based recovery is there. But when we look at the print, it's about just only 8% growth in order intake. So if you can throw some light and some orders, then get finalized. That's my first question. Then I'll come to the second question.
No, order book actually now compared to what it was last year, this is quite substantially higher. In fact, given the numbers for power division, actually, the growth is about 46%. The railway is actually what happened. The order book would have been much higher. So now the tenders which have to be finalized in March got postponed to the current quarter. So they will be made up in May. So Motors actually, we don't give an order get replenished month-on-month. So overall, I think the order book portion is comfortable.
Got it. And sir, generally, on the industrial and talking about the profitability on both segments, one segment, you have said that commodity softened, and it helped the margins. On the other segment, you said commodity went up. Can you throw some light in terms of profitability? What's the outlook on both the segments in terms of margin?
So if you analyze the last year performance quarter-on-quarter, if you see first-quarter margins have been lower actually. So I think the commodity, there are a number of aspects. So one is commodity prices prevailing at that point of time, commodity prices at which we book, we purchase, and then commodity prices, those when we charge it off the consumption, when we are using it, all these things matter. Therefore, so overall commodity, the fact remains that commodity prices went Y-o-Y, even though currently, and actually you see the last few days, the price of copper has been going up and down. So, therefore, there is no conflict or contribution to whatever we have mentioned. The quarters in which the prices were higher, we have stated so. At the end of the -- in Q3, actually, margins really were quite high, even in those calls I have mentioned because the prices, we booked the software prices at which they got charged to consumption. It is also because if it coincides with some of the high-priced orders that we have booked earlier got realized in those months, then it has both ways to our advantage. I hope I have updated myself clearly.
I got it. And sir, lastly, on the warranty provision, if you can throw why it was taken because we thought everything we are covering in terms of provision. And what is the overall exposure as a firm price contract in the overall order book? Those are my last questions.
So it will not be possible for us to, or we don't want to share how much is on account of orders which are not covered by price variation. So warranty actually, it is an estimate. When we feel it is -- we are a conservative company. We always would like to be consolidating provisioning, and we feel that it is really required to provide some more for warranty position that we provide. So that is the basis on which we take account.
I'll also note that this potion was made last year, that is in the FY '21, '22, not in this current year.
We'll take our next question from the line of Mohit Kumar from ICICI Securities.
My 2 questions. First is, sir, what would be the growth attributable to price? And what would be attributable to quantity, especially for FY '23 numbers in broad flavor?
No, no. We have 3 businesses. I don't know whether you're asking for the company or for any one of the business. It will not be possible to state for the company as a whole each business, each products are different. That is because we don't have this detail.
Okay, understood. The second question on the industrial motor market, sir, if you can highlight what is the kind of growth expectation going forward? Maybe you can split it also in terms of a low tension high tension motor? And what are the market share in FY '23, if you had?
Yes. In LT Motors, we have a market share of 35%. That is as per the EMA declared till January. And for HT motors, we have 14.5%. This is also as per EMA data declared after January. This is FY '23.
So growth for the future. This year value?
For this FY '24?
Current yes, almost all the segments are growing. Only steel was last year was very bad. Otherwise, wastewater and infrastructure farmers flat, but ethanol, sugar was growing very well. So last year. And this year also it continues to grow.
And lastly, sir, do you expect the railway tender will improve in the coming quarters as you said that something got postponed? It happened in Q4 FY '2023. Is that the right understanding?
Pardon me. Can you repeat it?
On the railways, you mentioned that some of the tenders got postponed from FY '23. Do we expect it to happen in Q1, Q2 FY '24, and do we expect the railways to be much, much stronger compared to FY '23?
In terms of the order book, it will be better when the orders will be finalized in the Q1, Q2.
What is the growth expectation, sir, we are looking at?
Growth expectation of the business during the year?
Yes?
We don't provide the details.
So we don't give a separate disclosure about it. But if you look at March, some of the tenders got postponed in the first fiscal update, and we've been awarded around some very high-value amount o[indiscernible]. But we can't disclose a separate number for the railway. But probably when we discuss the analyst call,Ă‚Â [indiscernible].
We'll take the next question from the line of Bhavin Vithlani from SBI Mutual Fund.
Congratulations for a great set of numbers. I have 2 questions, both pertaining to the industrial segment. If you could help us about the competitive landscape on both LT HT motors because we understand why incumbent like yours and ABB are almost doubling, but we see some of the recent entrants, like TMEIC, VEG, et cetera, also setting up significant capacities. So just help us understand about the competitive landscape. That's one. The second is on the railways front, if you can help us understand how does the changing landscape of the incremental growth shifting towards the 9,000 horsepower and 12,000 horsepower locos impact or benefit CG?
Yes. See, obviously, as you rightly said, we and these people are putting up the capacities. It is not just for the Indian market. And now, today, worldwide, people are looking at the Indian market. So people are shifting, whether it is ABB. I don't know where we'll be doubling, but definitely not in anti-motor or HT motor. They are maybe doubling over all their rotating business, which includes the automation. So definitely, the capacities are put up by the people. And as of now, if you see, the #2 is half of our turnover. So catching up time will take. And we are also, as Mr. Srinivasan said, that we are also planning for a capacity expansion.
Sir, if you could help us, how does this impact the margins? Because today, you're running almost at near-optimal utilization as these capacities come up, does this impact profitability?
See, these industrial products, mostly LT motors and the [indiscernible] motors, these are all commodities. Except for the time lag for passing on the material cost to the market that will take about 2 to 3 months. Otherwise, it is realized when the material cost goes up. And also, it will be passed on when the material cost goes down. So it will not have any impact as far as profits are concerned.
The next part you had asked is the competitive landscape is changing ABB procurement methods of the railway. This is on a PPP-type model where the companies would be asked to manufacture the locomotives in the railway premises. One of the tenders is out that is of 9,000 HPV Siemens has got 12,000 HP still postponed till August, and we still don't know when it's going to be finalized.Ă‚Â The supply would start to happen after 2 years, till such time we see a distinct continuity of policy of Indian Railways for a manufacturer of the current 6,000 locomotives, and we do not see too much of a change in terms of our outlook for the next 3 years.
You'll take the next question is from the line of [indiscernible] from IIFLEMC.
Sir, my first question is related to the Industrial segment, where our order book has kind of remained flattish 2% to 4% growth in the order book and order inflow. So is this reflective of the system-level orders in that segment? Or does this indicate the capacity lower, higher capacity utilization that we have in this segment and that's why we are not able to take the order inflow that we can?
Generally, I know if you have seen the volatility of the commodity happens too much. At that time, we also be very cautious in taking the orders as well as the channel partners. And now stocking also will be very cautious. So that is the reason it is shown as flat or maybe a small growth.
And given this backdrop, sir, how should we think about the growth in the segment, industrial segment?
So first of all, clearly, we don't give any guidance about the growth. So I don't think we are disclosing about the growth. But yes, we're always saying about the double-digit on the higher side.
And sectors are growing. All the sectors are growing. So investments are good. So we are hoping that things will be better.
Perfect. And sir, the second question is on clarification. The note that you have posted in terms of divestment investment in wholly owned subsidiaries, ILLC. So could you just help me understand this is a wholly-owned subsidiary of CG Power America? And we are divesting this step-down subsidiary. The line item that we have mentioned in the P&L, is that reflective of the fair value and the difference in the net book value, which is there as of March 23?
No, it is not reflecting that. It is just simply the performance of that entity.
And whether we should expect any interest impact of this divestment on India operations because of the selling of that entity, sir?
No, we don't see any impact.
[Operator Instructions]Ă‚Â Your next question is from the line of Rahul Gajare from Haitong Securities.
Firstly, congratulations on the strong overall performance and further strengthening of the balance sheet. Could you indicate the strong order book that you've got, how much of that comes from the international orders, if any, in the order backlog?
International.
Yes, sir.
It can't be significant, mostly all domestic orders only. Because we see railways at 11% generally, it's a domestic borrowing, very small portion of our exports of some railways, et cetera. The Motor is also substantially domestic. So while I'm not putting a number, you can say substantially they are all domestic.
Because I think in the third quarter, this number was around INR 146 crores. So that's what I was just trying to see whether there has been improved traction from the international market or more flattish?
So I think if you want, we have to just conclude and then let you know, but they are substantially all domestic orders.
So it is in industrial, there are mainly domestic orders. In power, we do that it at export, which is usually around 10% of the order book, you can take it.
Okay. Sir, my second question is, is it possible you can share the order intake for the fourth quarter of last year? And also connected with that, we've seen a significant increase in the allocation in the segmental performance. So if you can comment on that also.
So the last year quarter 4 number, you need the order intake number, right?
That's right.
That I think we can give two a separately.
We can take it offline. So we'll be able to share.
And with respect to unallocable expenses are you talking about?
Yes.
So I don't think so any increase in that number because last quarter, we had our interest reversal with regard to the NCD, so that it was around INR 18 crores, INR 19 crores. That is why it was minus in the last year. So this year, there is such other income. So that is why it is coming quartet.
Take your next question from the line of Mayur Patel from IIFL Securities.
Congratulations, sir. If you look last 2 years, the CG journey has been pretty phenomenal in terms of turnaround and coming back on the growth train. So strategically, what from here on, what are the top 3 or 4 areas of focus for the management to the fiscal '24, '25? And we have outlined CapEx of about INR 350 crores despite having a cash chest of INR 700 crores and generating almost a similar FPS annually. So how do you plan to leverage the balance sheet to drive the next level of growth?
So just to be brief. In Motor, if you ask, we have announced an expansion to double the capacity. So therefore, we would really focus on apart from the domestic market, we want to focus on exports. We also would like to look at some large event orders based on what we're looking to source from India based on the China processing strategy. Then we want to manufacture motors for electric vehicles. So these are the 3 or 4 directions we want to work on with respect to motors. Then if you look at power, the domestic demand is very strong. We have been setting the business both in terms of top line as well as the bottom line, in doing this business carefully to focus on margins.Ă‚Â And then also we have announced some expansion, which, of course, is not a great capacity. It will take a turnover down by 100 crores. If there are any opportunities, we are looking to further expand the transformer capacity here. The idea will be to position yourself to cater to the domestic demand, which in my view, is expected to grow at least for the next 4 to 5 years. And as far as railways is concerned, we have always been a product company. We are trying to fill the gaps and technology. For example, we are strong in propulsion.Ă‚Â There are certain areas in propulsion where we have gaps, we are trying to source technology for that. We also would like to see how we can, if not directly, to participate with other people in a constructive approach for the large tenders which are coming project orders. If that is not possible, then whoever is got the orders, whether we can work for them in a subcontracting manner. So internally, we are positioning ourselves with reciting ourselves with respect to the acquisition of technology and then skill gaps, et cetera. So all the 3 businesses have got good opportunities for growth. So this is how we are trying to step the efforts to increase our growth.
Got it. Any update on the ED side or the WIP and we need to see will take some more time?
WPMT. So it will take some time.
Got it. Sir, secondly, I mean last year, we had started on this journey of operational excellence, lean manufacturing, and factory productivity-related initiatives. So where are we with respect to this journey, are the benefits now fully accrued in the P&L, or do we think there could be some or more headway in terms of the operating margins from these initiatives?
So this journey has no destination. It will keep on going. There is no destination. We can't say we have completed everything and when we are finished. Of course, the major site, which we are starting, will still continue for at least one more there. Thereafter, whatever we have learned, we will continue to apply and operate. And some of the margins which we are seeing higher margins, at least a certain portion is attributable to all these games, either it's on account of operational excellence lean when the productivity increase, et cetera, it's certainly on account of this. So this will continue.
And also adding our capacity without incurring much CapEx. So that is also helping us.
Sure. And one last question, if I can ask. Would it be possible for you to briefly share how was the product category-wise growth number to transform years motors, railway in the consumer portfolio?Ă‚Â The growth rate should not be a problem. Thank you.
We'll take your next question from the line of Harshit Patel from Equirus Securities.
Sir, my first question is on our CapEx plan. Apart from motors and the transformers CapEx that we have announced in the first quarter, you had also spoken about doing some debottlenecking to release some 15% to 20% of the capacity at a CapEx of almost INR 230 crores. But sir, while we see our overall CapEx numbers for FY '23, that number seems very weak, visas that guidance. So could you please explain the gap in that?
No. GAAP it is taking time to implement the CapEx. We have taken more time either because we want to optimize looking further or because we want to combine it in some cases with the expansion proposals so that overall economics will be better. So that's it, actually. So it's nothing -- we have not done any CapEx, there might be in terms of timing, the best way of doing it in sort of today maybe interrupt tomorrow along with other CapEx, et cetera. So each SBU is taking their own decision. So it will happen.
Sir, my second question is on the railways front. Could you give us our FY '23 sales order and order book for the railways business?
We are not providing the same details because there are segments which are served by our segment as well as in the industry. So normally, we are not providing the breakup of railway order intake and [indiscernible].
No problem, sir. Sir, just lastly, sir, when I look at our overall liabilities front, the discontinued life and the liabilities for the discontinued operation is almost INR 714 crores. Sir, could you explain why this number is so high? Anything you think that we'll have to pay in the future? So is the INR 714 crores entirely pertaining to this UI LLC that we are going to divest?
No, it is relating to many other government subsidies, right? So those subsidiaries are under voluntary liquidations or are under [indiscernible] levels. So as of now, we do not see any liability or payable against that core. Okay. And we can share the numbers for the railway if you want, for the full year is INR 1,120 crores for the railway. It is part of the industry. Yes, it is for the '22 '23. So it's a part of the industrial systems. And our order book remains at around, including the order which we got it in the first week of April, it comes to around INR 970 crores.
Okay. So this is INR 970 crores are total orders for the outstanding order book?
Outstanding orders. So order book position.
Order book position. Okay. So this entire thing pertains to only industrial systems, right? And power systems would be on top of this.
Yes. This is only we talked about the railway orders.
So the total order book is the unexecuted order we have mentioned that INR 4,400. [indiscernible] And we mentioned in the press release.
[Operator Instructions]You'll take your next question from the line of Dhavan Shah from Alfa Qurate Advisors.
I have a question on the capacity of utilization for the LT and HT Motor. So you highlighted roughly 80% to 85% of utilization last quarter. So what was the number at the end of Q4?
It's almost similar.
It remains the same.
Okay. So on a quarter-on-quarter basis, we have seen the growth. So is that roughly driven by the realization of growth? Is that a fair assumption?
Volume and price both.
Volume and price and also product mix.
We'll take the next question from the line of Dhiren Merchant from Aurora Limited.Ă‚Â Our next question is from the line of Abhilasha Satale from Quantum AMC.
Congratulations for the boost of the numbers. So my question is regarding the Par segment. We have seen around a 33% increase in the order intake for this segment. And even the order book remains strong. So what has driven this kind of increase in the overall orders, how is the outlook for the current year? And what is your average execution period of the same?
So the reasons for the increase is actually purely investments that are being made in the energy sector. The power sector is witnessing a lot of investments. So therefore, as a result, demand for our products gain momentum. I think, as I said earlier, the demand will continue to be strong this year. What is the third question?
So average execution period.
See, it depends on the product. So some can be executed in 3 months and can be 7 months, depends on the type of products, we cannot generally say one time period.
We'll take our next question from the line of Mayank Chaturvedi from Equirus Securities.
Just wanted a clarification on the rail base number that you did say. So you said the railways business as a whole achieved a sale of INR 1,120 crores, or is it only from the Industrial Systems segment?
Yes, INR 1,120 crores out of the industrial segment, or it would be a bit more.
So in the last quarter, you feel that it would be an INR 80 crore revenue run rate from the power system. So would it be closer to that number?
Yes, yes. Right.
Okay. And sir, what was the orders intake for the railways business for FY '23?
FY '23 Order intake was INR 113 crores.
So this is only from the Industrial Systems business.
Yes.
Okay. And that does not include the orders actually seen in the LNS?
Yes. LNS was received in the first week of April.
Okay. And what would be the orders that we received in the Power Systems segment?
No, the order that we have received this year in railways FY '23 in the railway segment?
Yes.
It should be in the range of, I think, INR 200 crores.
So INR 130 plus 200. Right? For the ads business.
So we said sales were 1,123, and approximately INR 200-odd crores would be the sale that has happened extra from our side.
Thank you.Ă‚Â [Operator Instructions] We'll take your next question from the line of Sanjay Kumar from IoT BMS.
I just wanted to understand the end-user or the application for the transform or CapEx that we are putting up, the first question. So from the previous quarter, you released a presentation where you mentioned the trade wars of the Power segment, one was the TBCB projects or the transmission of the 300 gigawatts of energy. That should be roughly INR 20,000 crores opportunity, right? Just the transformer piece for translational gigawatts.
I'm not able to understand your question. Anyway, I will ask Mr. Mukul, our business head to answer if he has understood your question.
Can you repeat the question?
So for transmission of 300 gigawatts, the Ministry of Power came out with a detailed report mentioning the transition capacity needed. And you had also quoted that TBCB projects worth INR 2 lakh crores is expected in the next 5 years. Of this INR 200 crores, what will be the transformer opportunity?
Consumers will be close to around 10% of that.
Okay. No, that's what I mentioned. So INR 8,000 crores. But all of this should be 4000s, right? But we are putting up a capacity for 220 kV, is what I understand at C3.
No. We are putting a capacity for consumers, which can make 20,400 give you all transformers because this is a way in which our valuing machines are there, and this can hitherto all 3 engines. Firstly, the second thing is TBCB projects are also in [indiscernible].
Okay. And sir, the second CapEx is at Malanpur, there's the PPD states that the capacity addition is to 1450, what would be the -- which sector will be the driver for this segment, sir, the low-powertransformers?
See, actually, low power transformer. I mean, this is our internal composition of unifying it as low power. But actually, this goes up to 50-way customers up to 145 KV. And these are largely used by the utilities within the district or the community work of the state. So this is a large driver.
Okay. And second on motors. So I heard that NPCA Sarosh vendor for primary coolant pump motors. Is that true?
You are right. We have been approved as a second vendor. So BHEL has been supplying or has been asked to supply so far. What has been the opportunity for us in the nuclear sector, from TCL?Ă‚Â The opportunity is big because of the first order, which we have achieved for 10 numbers last year, by the end of the year. And it will be at least 40 to 60 numbers are likely to -- tenders will likely to come in next maybe 2 years' time.
40 to 60 and 1 motor will be approximate value, sir?
We can't share that.
We'll take the next question from the line of Vikas Srivastav from RBC Financial Services.
Just wanted to get a flavor again on the consumer product. If you could get -- I know you won't give any forecast, but when do we expect this to get into our segmental reporting turnover cross 5%? And a general outlook for the next 2, 3 years in terms of how material or substantial can come for the overall CD business, whatever the best you can share and what are the reasons we have introduced our products? So whatever is there in the public domain in terms of the introduction of consumer products and how has been received in the market?
See, the purpose of launching this is to be a well-known brand and a well-known brand in not only industry, but on household brands. So that is the reason. And we know this business very well, and we had channel partners who were doing this business earlier. So that is the reason we have launched. And we can't give you the exact numbers, but we have done significantly well in the last year for 2 products which we have launched, the pumps and the fans. And maybe we will be adding some more products -- expansion of this product range, and we have big plans for this business going forward.
[Operator Instructions]Ă‚Â We'll take the question from the line of Manish Dhariwal from Fiducia Capital Advisors.
Sir, as you rightly noted, that Company is a very, very strong brand and is also one of the most acceptable brands even in the households, and you have tried to grab the opportunity. Then you must have obviously observed that the consumer side of the business, which was earlier held by some private equity players, they are undergoing huge problems. And the management of your company has also stated that you have a very strong inorganic acquisition appetite as well. So given these kind of market scenarios, can you throw some light on how your growth aspirations will be met by, say, inorganic line? By inorganic, by maybe acquisition, or some sort of some acquisitions.
No. So I think one thing is the philosophy, very inorganic or organic opportunity, we evaluate. If it makes commercial sense, we go ahead. That is the simple logic. Even CG itself acquired opportunity. I don't know whether I have answered your question. We have to evaluate the commercial sense. And if there is an opportunity, we can pursue that.
The second question would be like on a little strategic perspective of maybe about a 3- to 5-year outlook. So basically, your case study in how a turnaround can be done in a successful manner. And I think all the losses that the organization had undergone because of its wrong management practices have been kind of recovered. Now sir, I guess, in some level, it was the low-hanging fruit. Now so going ahead, sir, it would be very helpful if you could share as to how you are looking at the future and what kind of share of the revenue can be contributed by the new initiatives. So over a period of 5 years. So I'm not doing a short-term thing, so we are long-term investors. So you would like to understand.
So this is actually a Q4 earnings call. So you are asking me to answer some questions for.
But this is the only opportunity you give us now to connect with you.
I know I have some time back to answer the question.
What about the growth areas? How are you looking at, et cetera?
What we are trying to do is I have said that. At this point in time, we are not doing anything. We are really trying to consolidate and strengthen our core. We want to consolidate our industrial systems, railways, and power systems in all the businesses there are big opportunities. The first initial attend to us to regain the market share which we lost, which we have done. So now we are trying to see how we can consolidate and strengthen our portion. If there are no opportunities here, we should look for them immediately. So this is what we are doing at this point.
[Operator Instructions]Ă‚Â We'll take the next question from the line of Mayank Chaturvedi from Equirus Securities.
I just had a question on the Motors business. So with the softening commodity prices, have we passed on that price benefit to our dealer network?
Yes. I told you that there will be a time lag. When the price goes up, recovering will take about 2 to 3 months' time. And obviously, when the price goes down drastically. So again, as I said, it is a commodity product, there is competition. So we need to pause it very carefully. But our realizations will be protecting our margins. Realizing our passing on will happen.
And sir, why I asked this question is because I was going through the price list that CG Power comes out with their dealers and the size that's been coming for April '23. What I can observe is it's 10% to 15% higher than what was in effect for FY '22 or FY '23. So that's why I asked this question. So is it that instead of revising down the prices, we have increased our prices or something like that has happened?
In quarter 4, if you see the prices have gone up, copper has crossed $9,000 even it went up to 10,000 and now it has come down. So generally, the practice in the industry is that every year, the price list is revised, and the discount is what we pass it on based on the commodity price.
Okay. So all in all, the prices have been revised upwards, and the discount to dealers remain the same?
Yes. I think I answered your question, right? That's too much of volatility in the commodity prices. So it depends on the situation, we decide everything. So I think we have answered your question. So as of now, the price revisions are not there. Whatever prices were there, those are there for the '22, '23.
We'll take the next question from the line of Bhavin Vithlani from SBI Mutual.
The question is on the consumer products piece. If you could help us with the market share that we would have at the exit quarter for the pumps and the fans business? And how do we see the growth given that we are a smaller market share?
So Mr. Vithlani, please go ahead and ask your question again.
Okay. So the question is on the consumer piece. Could you help us with the market share in the pumps and the fans in the exit quarter of March? And given that you are much smaller and starting, what's the kind of growth we see, and are we incurring losses being the initial stages?
We are not incurring losses. Growth, obviously, it is multifold because we are a very small player. And as you rightly said, we are just big enough, we are at the single-digit market share as of now.
Is it possible to highlight the market share for the pumps? Is it like 7%, 8%?
No, not up to that level. It is a little less than that, and finances also. Both are below 5%.
Okay. And would you be able to share a 3-, 4-year perspective? What's your aspirational market share in each of these products and the efforts we are taking to achieve that?
No, I think we have been telling that 3 to 5 years, our target is around INR 1,000 crores in the absolute numbers.
We'll take our next question from the line of Alok Ranjan from IIFLAMC.
Sir, just one question related to the 2 industrial and the Power Systems segment. Is it possible to help with the replacement order and the new project product, like the growth that we have in FY '23, the 2 segments? Is it possible to give some sense of how much we generally get from the replacement demand and how much from the new project demand?
There is more of new projects only. The replacement is because you see motor's life is almost about 20 years, okay? So the replacement market is generally catered by the channel partners. So we will not get to know exactly how much is going for the replacement market. But to the best of our ability to estimate is about 20% to 30% is the replacement. The rest of the market is for the new projects. New projection, new OEMs who manufacture the equipment.
Got it. And can we infer that, sir, in that case, for our company, the services portion will always be kind of very low like FY '22, I think it was closer to 1%? So it will remain kind of maybe low single-digit kind of.
Service revenue you're talking about?
Yes, yes.
Yes, generally, yes.
Thank you. Ladies and gentlemen, we have reached the end of the question-and-answer session. And I'd now like to turn the conference back over to Ms. Bhoomika Nair from DAM Capital for closing comments. Over to you, ma'am.
Yes. Thank you very much. On behalf of DAM Capital, we would like to thank the management for giving us the opportunity to host the call and also the participants for being on the call. Thank you very much, sir, and wish you all the very best.
Thank you.
Thank you. Ladies and gentlemen, on behalf of DAM Capital Advisors Limited, that concludes this conference. Thank you for joining with us, and you may now disconnect your lines.