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Triveni Turbine Ltd
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Ladies and gentlemen, good day, and welcome to Triveni Turbine Limited Q4 and FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr. Rishab 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 Q4 and FY 2022 Earnings Conference Call of Triveni Turbine Limited. We have with us today on the call, Mr. Nikhil Sawhney, Vice Chairman and Managing Director; Mr. Arun Mote, Executive Director; Mr. S. N. Prasad, President, Global Sales Product; Mr. Sachin Parab, President, Global Sales aftermarket; Ms. Surabhi Chandna, Investor Relations and Value Creation, along with 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 mailed to everybody 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 start this call with opening remarks from the management, following which, we will have an interactive question-and-answer session.
I now request Mr. Nikhil Sawhney to share some perspectives with you with regard to the operations and outlook for the business. Over to you, sir.
Thank you very much, Rishab. A very good afternoon to everyone. I'm very pleased to take you through the business updates and the earnings for FY '22 for your company Triveni Turbine. FY '22 has been a year of many milestones with Triveni Turbine. The company has achieved its highest EBIT turnover of INR 8.52 billion, which is a growth of over 21% over the previous financial year. Similarly, on the order booking front, the company has reported its highest ever order booking of INR 11.8 billion, which provides very good visibility for growth in FY '23. This is also coupled with the opening order book that we had for FY '23 as of the 1st of April, which is a growth of over 52% over the previous financial year.
The company's domestic enquiry book has shown an increase of 57% over the course of this year compared with the previous financial year. And this has been led by sectors such as co-generation, food processing, distillery, pulp and paper, chemicals and a variety of different sectors, including cement, sugar and oil and gas. International enquiry generation increased by 25% compared to FY '21 and geographies which generated increased demand were from Southeast Asia, followed by Europe and variety of different sectors, including renewable energy-based IPPs as well as certain process industries led to this growth in enquiry book.
The total enquiry book has seen a growth of over 36% over the financial year '21 and is skewed to about 60% of the enquiry book coming from the international market. Triveni Turbines has currently orders -- has installations in over 75 countries and enquiries from over 110 countries, and so it is looking to expand its reach continuously to better service its customers. The company's product portfolio is also well poised in the near term, with growth in both the 30 to 100 megawatt segment, which it is revisiting with renewed vigor as well as the API market segment in which it offers energy-efficient drive turbine technologies and products.
The aftermarket segment is also showing good growth, both in terms of being able to have installations in a variety of new markets, be it in terms of large ultracritical and supercritical technologies, large utility turbines, including applications such as geothermal and a variety of specialty applications and other rotating equipments. The company is also adding capabilities across a variety of different internal functions, including human resource, manufacturing as well as technology, and I would be happy to take you through these during the course of our interaction.
As far as the financial performance is concerned, the revenue from operations for the financial year were at INR 8.52 billion, which I had already stated, which is a growth of over 21%. EBITDA for FY '22 was at INR 1.92 billion, which is a 15% growth and at a margin of 22.5%. PAT for the financial year '22 is at INR 2.7 billion, an increase of 164% year-over-year, which was aided by an exceptional item of income, which we have accounted for in Q3 of this financial year. During the current quarter, the company acquired 70% stake in TSE engineering (pty.) Limited in South Africa for a cash consideration of ZAR 11.9 million, which is an equivalent of INR 57.6 million to further strengthen the company's position in the aftermarket business in the South African development community region.
The Board of Directors has also recommended in this previous Board meeting a payment of a final dividend of 85%, which is INR 0.85 per equity share of INR 1 each, and a second special dividend at 70%, which is INR 0.70 per equity share of INR 1 each for the financial year '21 - '22, subject to shareholders' approval. The EPS for the financial year stands at INR 8.36 per share. For the quarter in specifics, the revenue from operations increased by 33% over the previous quarter, the same of the FY '21 to INR 2.37 billion, and EBITDA came in at just shy of 50 -- of just shy of INR 497 million at a margin of 21%, which is an increase of 71% over the previous financial year. Profit before tax at INR 441 million was an increase of 87% over the previous financial year and profit after tax at INR 330 million was an increase of 42% over the same quarter the previous financial year.
I've already taken you through the order book and the outstanding order book, but I feel it's important to stress on this again. The total consolidated outstanding order book stands at INR 9.7 billion as of the 31st of March 2022, which is higher by 52% when compared to the previous financial year. The domestic outstanding order book stood at INR 5.4 billion and the export outstanding order book doubled in FY '22 and stands at INR 4.3 billion as of March 31, 2022. The export order booking during the quarter, the details are part of our investor brief was at INR 740 million, which is higher by 2%. And during the full period of the financial year stood at INR 4.7 billion, an increase of 122% as compared to the last year. The company achieved I've already said a total order booking of INR 11.8 billion in financial year FY '22, and it is the highest ever in its history as against INR 6.4 billion during FY '21, which is an increase of 64%, which has been driven primarily by the export order booking, which is, of course, as you know, with a higher margin.
On the product side, the order booking during the quarter improved significantly to INR 2.2 billion, which is 75% higher when compared to the corresponding period of the previous year. And the product segment turnover was INR 1.7 billion during the quarter, an increase of 32% over the previous year. Aftermarket segment registered an order booking of INR 639 million during the quarter, grew by 57% when compared to the corresponding period of the previous year. The aftermarket turnover was INR 619 million during the quarter, a growth of 35% over the previous year. Aftermarket has contributed to 26% of the total turnover in Q4 FY '22 and 27% in FY '22, which is largely similar to previous year's levels. Despite the growth in turnover of products, aftermarket has equally kept pace, and we believe that this to be the trend going forward as well.
Enquiry generation during Q4 FY '22 remained strong in both the domestic and international markets on a year-on-year basis, and we believe this will lead to very good visibility of orders in the coming year, which would give visibility for turnover in FY '24. The total investments of the company as of 31st of March 2022 stand at INR 759 crores with INR 7.59 billion. This is versus INR 3.41 billion as of the 31st of March 2021. The net working capital for the company is at a negative INR 1.53 billion due to higher customer advances of INR 2.88 billion versus INR 1.68 billion in FY '21.
The global market has been steady if we look at it in the entire market from 0 to 100 megawatts, though the 0 to 30 megawatts has seen greater growth while the below 30 megawatts -- while the higher than 30 megawatts segment has seen a decline in the market over the previous financial year. Triveni Turbines domestic market share continues to be robust at near 50% and international market share has also increased during the current year. Customer care business has focused on upgrades and automations as well as AMCs to further its business prospects, and we'll continue to do this so as to increase its sales as well as its reach to its customers.
I must point out that while turnover has grown by 21% over the financial year '21, our profitability, which is at PBT level has grown by approximately 18% over the previous financial year. The decline in margins has been led primarily by an increase in raw material costs by about 4.5% over the previous financial year, which has been driven by an increase in commodity prices, but also increased domestic sales as a percentage of turnover. Domestic sales as a percentage of turnover in FY '22 was at approximately 70% of turnover -- of product sale turnover, while in FY '21, that same percentage was about 56%.
We believe going forward, with the increased percentage of export as a percentage of our order booking as well as our carryforward order booking, this portrays a good visibility in terms of margins for the current coming quarters as well as financial year. But more so is the fact that with an increased -- with a majority of costs already being absorbed into the system and being passed on in new contracts, we believe that we would always -- we would revert to our long-term averages of higher than 20% PBT margins in the long term and medium term and short term as well.
With that, I'd be happy to take questions. Over to you.
[Operator Instructions] The first question is from the line of Ravi Swaminathan from Spark Capital.
Congrats on a very good set of numbers. My first question is...
Ravi, sorry to interrupt. May I request you to use the handset mode?
Yes. Sir, just wanted to check with you regarding the breakup of order inflow between the 0 to 30 and 30 to 100 megawatt. And how much potential is there for us, if you can, just give some quantitative figures as to how much more can we grow in the 30 to 100 megawatt range. If you can do that, that will be great, sir.
Okay. I will get Mr. S. N. Prasad, who is our President for Global Products to comment on this. But in the previous -- in the past quarter, we did not see any finalization of about 30 megawatt in our visible enquiry book. So both in the domestic and international markets. Prasad can give you a little bit more insight, but you are very right, Ravi, that this market segment is somewhat new for us. We would be entering this and so therefore, growth in this market segment would be -- would increase at a faster pace than our historical order booking. But going forward, we feel that we will not be -- we will not like to segment the market between 0 to 30 and 30 to 100 because it ends up just giving complications to -- and a mixed message to a lot of analysts in terms of where the company stands.
But having said that, we do see a very good participation in this growth. As you can tell from our order book, we do have a very strong order book in terms of growth. But Prasad, if you can address Ravi's question, in particular, about 30 to 100 megawatts and what traction do you see. And where do you see Triveni's order booking growing in this market segment.
Yes. So in 30 to 100 megawatts, in FY '22, we have a good traction. And in terms of enquiry pipeline also, there is a substantial increase in the enquiry pipeline. But in 30 to 100 megawatts, the gestation period from enquiry to conversion, it takes a little longer compared to sub-30 megawatt things. But when we get into FY '23, yes, we are changing some of enquiries, which we are confident that FY '23 will be better than FY '22. In FY '22, we picked up 1 domestic and 1 international order, which has given us a good acceptance in the market. So FY '23 based on the current pipeline, it will be much better than FY '22, what we see right now. So the traction is from all different industry segments. So starting from process co-generation, steel and everything.
Okay. And the 30 to 100 megawatt or rather as hereafter after, I'll call it, the higher range. So basically, that is more from exports? Or are we seeing the enquiry piping as more from exports? Or domestic also, are we seeing in terms of ordering -- in terms of enquiry?
Yes, both our domestic and export, both the tractions we are having.
Ravi, as you can see, our domestic enquiry book has increased quite substantially by over 57%. There's a broad-based enquiries which are coming in from a variety of sectors. And larger turbine orders tend to come from either large-scale process industries or from the steel industry and both of which are seeing good fixed capital formation.
Got it, sir. And typically, the margin profile at an EBITDA level for these kinds of orders, then the higher rating orders, they are better off than the lower rating. Is my assessment right on that?
No. In general, the profile of -- the margin profile is driven more by the geography of customers rather than the size of turbines. So in typical domestic orders, we tend to carry similar margins and export orders would tend to carry similar margins regardless of the type of turbines. As you would understand, these are customized products. So depending on the level of customization, the level of complexities, margins would go up as well. But in general, geography is a better teller of margins than the range.
Got it, sir. Got it. And my final question is in terms of the ongoing war in Europe and there are talks of recession in U.S. Is it likely to -- are you seeing any signs of that? Or is there still we are seeing very good growth in terms of enquiries and pipeline, et cetera?
I'll let Prasad comment on this as well, but we had to reduce our order book by about INR 40-odd crores in this past quarter because of certain orders that we took out for certain steel mills, which are currently being invaded in Mariupol in Ukraine and in other parts because of just lack of visibility. But in direct, the Ukrainian market is not a very large market for us, so for our direct orders. But in terms of its impact on a broader basis, we've seen high commodity prices and therefore, long gestation projects are on the table. This stretches from pretty much all geographies.
Europe in specific, where they -- where we -- which may be more impacted by this war, the investments into renewable energy are probably getting a renewed focus. And one of the order that we picked up in this past quarter was from the largest waste-to-energy producer globally, and this is for a 29.5 megawatt turbine, 20 kilometers from the Eiffel Tower. So it's a very prestigious order for us. But investments into renewable based applications and renewable-based projects in Europe continues to be strong, and we play a very strong role in that growth. But Prasad, would you like to comment a little bit about if the war is impacting other markets.
Yes, sir. As you rightly mentioned, in this quarter, we have taken out around INR 400 crores of orders what we picked up from Ukraine in Q3 because of the stability in the current scenario, we don't know whether these projects will go through or not. Even though we have our advances in place, we have taken out from our booking. Further, in Europe, as we mentioned, yes, municipal solid waste and process co-generation segments are doing quite well. And U.S., our presence is not that strong. So even whatever anticipated recession in U.S., whatever it is, it may not impact us for FY '23 numbers because we are not considered those markets into our listing, either Russia, Ukraine or U.S. The balance market where we are operating, especially in renewable energy markets and process co-generation markets, they are quite strong. We are hopeful there will not be any downfall in that side of the market in that.
[Operator Instructions] The next question is from the line of Ankit Babel from Subhkam.
And sorry I joined late, so pardon me if I'm asking any repetitive question. Sir, my first question is what kind of order inflow growth you are expecting in current financial year, that is FY '23? So this year, I guess your order inflow was around INR 1,184 crores in totality. So on this base, what kind of growth or what kind of absolute numbers you are targeting this year?
We don't specifically talk about this, but the growth in our enquiry book, which is over 36% over the previous financial year would give you an indication of what our ambitions are in terms of increase in order booking. Our targets are stiff. The market is tough. There is competition. It's not as if this is a very easy market to compete in. We do have a very strong value proposition, we believe. So our attempts are for good growth in order booking. I think you will see -- if you see half of Q1 has already gone by. And we're very optimistic on what that tells us for the coming quarters.
Okay. And you did mention about that the margins will improve because of the better export sales in the coming quarters and also from the aftermarket products. But considering the order book which you have and the expected order flows, which you are expecting this year, so from a top line point of view, I mean what are your views? How much growth can we see there on a base of say INR 850 crores?
Well, that's what I tried to allude to earlier, which is that on the base of INR 850 crores, we had an opening order book of approximately INR 650-odd crores, which is opening up INR 640-odd crores. And so there's always a book and bill in Q1 for product and aftermarket up to Q3, which lends towards the turnover of any financial year. And so given the fact that we have an extremely strong opening order book, which is of -- which has increased by over 52% to INR 970-odd crores, while some of these are long-duration contracts in the 30 to 100 megawatt segment, which will spill over to FY '24, including our visibility of good order booking in Q1, we believe that there will be substantial growth in this current financial year. Enquiry generation in this financial year gives us confidence about order booking this current year, which leads to confidence for FY '24 as well.
On the margin front, like I said, I think we did a very good job in terms of being able to preserve margins in FY '22 despite the fact that we had large commodity price increases. We had chroming goods prices increasing by over 60%, 70%, steel copper prices increases as well. And so absorbing those costs and at the same time, dispatching turbines, which are predominantly for the domestic market, I think we did well in terms of being able to preserve our PBT margins for the full financial year at about 20%. I must tell you that as steam turbine is a customized product and the margins are different from order to order. And so while quarterly, you will see variations for the full year, it is a better indication to have this breakup like I told you.
The fact that you will have higher dispatches in the export market compared -- in FY '23 as compared to FY '22 leads us to believe that with great degree of confidence that margins shouldn't be the biggest pressure. But having said that, in this current financial year, which is FY '22, we expanded our employee base by over 10%, and this is in a variety of high value-added segments and roles. We believe we will continue our growth in personnel in the current financial year as well. And so therefore, it's -- there will be increase in sort of capability building and capacity building from a HR and personnel perspective, which we believe gives us good visibility to not only get more orders, but to execute these orders in the coming years.
Okay. And sir, what is the outlook on the API business, any breakthrough orders you're expecting in this year?
Yes. That's a market segment that we have low market share in. We see a very good potential in that market. I think that in specific, we will only see good growth in this market going forward. Our registrations are high, and we've had good traction in FY '22, and we believe that, that will only increase in FY '23. This market is quite consolidated in terms of the number of buyers that you have and the number of clients that we have, without being too specific because there is a degree of competitive information in a lot of work we're talking about. We believe that this is definitely a segment of growth for the company where we are offering extremely competitively priced energy efficient turbines for our end user market. So this really does play into the broader theme of providing very efficient -- energy-efficient turbines for us. But Prasad, would you like to comment a little bit more on the API segment?
Yes, sir. API segment, as you rightly mentioned, our market share right now is miniscule market share, but because of our approval there across the globe, and our enquiry pipeline is quite strong in API. And the quarters to come, years to come, this is going to be interesting segment for us. That's right.
Okay. Sir, that's helpful. And lastly, one question. In the recent press release, there was an announcement that your -- one of your promoter, Triveni Engineering is selling some 22% stake in the company. Out of that, around 10% to 12% would be bought by existing promoters in their individual capacity. Just wanted to understand, the remaining 10% would be sold in the market? Or it would be like any other promoters willing to buy it out or what will happen to the remaining 10%? How the sales process will happen in that sector, 10% stake, sir?
Okay. Since I'm an interested party, I'll get Surabhi, who is our Investor Relations Manager to answer that question for you.
Sure. So the Board of Triveni Turbine has been informed of the announcements made by Triveni Engineering. And these are in the public domain and on the stock exchanges. We have been informed of the promoters' wish to acquire the 10% to 12% stake in TTL that you also mentioned about. The process is being run by Triveni Engineering, and it is our belief as well that the balance amount is available for minority shareholders. And the Board of Triveni Turbine views this positively because it will help expand the liquidity and the free float of the stock. The transaction has been informed that it will be at the arm's length pricing, which is market driven. So those are the comments on the promoter stake sale, et cetera, and asked by TEIL to TTL.
So one confusion. So the floor price was decided at 171 for the promoter to buy it from the Triveni Engineering. But there has been no pricing decision or pricing, any information on the pricing for the remaining 10%. So would it be market-driven? And any time lines for that?
Okay. That is correct. That is correct. So the terms and conditions say it's a prevailing price or a floor price and hence, it's a market-driven pricing.
Even for the promoters also?
Whichever is higher. So the language that -- if you see the announcement, mentions that it will be minimum of 171 or market price, whichever is higher -- prevailing market price, whichever is higher. Hence it is market linked.
[Operator Instructions] The next question is from the line of Vimal Sampath as an individual investor.
Yes. See, first question is, in the press release, you have mentioned that the company is adding manufacturing capacity. Okay. So how much -- I mean, are we -- is it a big -- this thing or last time, you had said about INR 35 crores. So is it the same thing? Or are we looking at adding...
Board has not approved any other CapEx. So the CapEx as we have is as stated. That capacity expansion is underway, and it will be -- it's currently partially already completed, and it would be done significantly in the coming quarter, which has expanded our capacity from, I think, about 150, 160-odd turbines to over 210, 215 turbines.
Yes. Okay. So that is about 30%, 40% we have increased, correct. So still, we'll be left with lot of cash?
Yes.
Any decision, I mean, Board is contemplating or have anything in the pipeline? I mean because buyback also -- no, about the cash -- on the books.
Yes. The Board has not contemplated anything. The Board in its previous Board meeting has announced both the final as well as special dividend, which complies with our dividend policy of distributing over 30% of -- the 30% payout ratio on net profit.
Right. Right. And on that South African acquisition, it is basically for aftermarket only or even in future, it will be a production based?
It will never be a production based to the extent that it will be full-fledged manufacturing. There is a workshop there which will deal with the local market in terms of a variety of different requirements that steam turbines may have, which can be done locally. It will be ably supported, of course, by the home manufacturing base. We believe that there may be some further CapEx in this entity in the coming years, which will be large -- which will be met only through internal accruals of that specific entity itself. But I'll let our President, Global aftermarket, Sachin Parab, tell you a little bit more about this particular acquisition, its visibility, but also on the general aftermarket look -- outlook, both for South Africa and globally. So over to you, Sachin.
To answer your specific query about South Africa. This acquisition is primarily meant for our aftermarket business, and we do not contemplate any manufacturing activity there for the product business. This is definitely going to support all the customers of Triveni turbines in the SADC region. So indirectly, it's definitely going to benefit our product business. Primary objective of this acquisition was to build our refurbishment business, which is our multi-brand service offering. The target, the objective was to better service our customers and give them the confidence that we are closer to the customers to take on more jobs, more complex jobs and a variety of jobs in the refurbishment business, which is, as I said, the multi-brand service offering.
So this will definitely help us grow our enquiry pipeline for the aftermarket business in the SADC region in Africa. It will also give us an opportunity to access the other markets in the African continent with our manpower base in South Africa. So in general, this is a stepping stone for our growth for the refurbishment business in the African continent. And as mentioned by our VC/MD, to dwell on the aspect of aftermarket outlook. We have a very good enquiry pipeline from different parts of the world, including Africa. The Indian market too, we have seen a very good traction in terms of enquiries for the refurbishment business as well as our part sales and service business, which is the Triveni product support group. So we are quite buoyant that FY '23, we'll see better growth than what we achieved in FY '22 for the aftermarket business. Thank you.
The next question is from the line of Priyesh Babariya from Batlivala & Karani Securities India Pvt. Ltd.
So I have only 2 questions. First is regarding it was [indiscernible] previous...
Sorry, Priyesh. Your voice is breaking.
Sorry, I can't hear you.
Priyesh, request you to come in the network area. Your voice is breaking.
Yes. So my first question is regarding capacity utilization. What is capacity utilization as of now as we make around 200 to 220 state turbines per annum? So what is the [ direct ] market capacity utilization as compared to [ when you guys ] having financial [indiscernible]?
Okay. And the second question?
Second question is an impact on market share. So domestic market share is around 15%. So what is our international market share as of now?
Okay. So I'll answer your first question -- second question first and then I'll ask Arun Mote, our Executive Director and CEO, to talk a little more about the capacity utilization and any constraints that he foresees in that front, including the capital investment and by when it would be operational, et cetera. From a market share perspective, as we've said in the past, we aim to maintain a dominant market share in the domestic market. This is part of a strategy so that we are able to have the appropriate cost structure, which is necessary for us to leverage it globally. Internationally, our market share is dependent on our visibility. We do not have full visibility in the international market. And so the market share to the extent of the order that we do see is quite high, but we do not see a majority of orders. So therefore, it is very difficult to read anything into what is our market share internationally.
We tend to say the growth in our enquiry book is more reflective of our operations internationally because that tends to give us -- because once you do get an enquiry, that is half the battle with the customer. That means he is accepting you as a supplier. So that is an answer on that question. Arun, could you give a little bit more light on any capacity constraints? Or what is the capacity utilization that we have right now?
Yes. This is Arun Mote. As regards to the capacity, as our Vice Chairman has said, we have about 150 to 180 numbers of turbines that we can make in the current capacity. We are adding a one full base in our new Sompura plant. The execution of this expansion is already under the way, and we should be able to complete it by mid-August and August. This will give us capacity between about 220 to 250 numbers of turbine varying between all the sizes. Here, the handling capacity could -- will be close to about 300 tonnes. So that would mean not only 100 megawatts, but even the bigger ones can be handled, which can be for the refurbishing area. This is the internal infrastructure.
As regards to subcontractors, we are increasing our subcontractors by 25%. We are giving preference to our old employees who have retired by helping them locate facilities, helping them in expansion, helping them in getting financed, and that's how things are working out. We will be increasing the subcontractors' business as percentage substantially in the coming years. We have no extra addition of capital, except what our Vice Chairman has said about INR 35 crores to INR 40 crores for expansion of these. As regards to manpower, we already recruited 60% in Q4 and part of Q1, and we expect the staffing to be complete for our expanded business by August to September.
The next question is from the line of Ankur from [ Kishore ] Capital.
Sir, just wanted to understand the 30 to 100 megawatt market since now it's a stand-alone opportunity for us. And what are our plans to compete with stronger companies? Obviously, up to the 30 megawatt segment, we have a good market share and a good hold. But like how do we plan forward to because this is expanding our market size. And if suppose the 30 megawatt success can be replicated into 100 megawatts success, it would be a great thing for the company. So sir, can you throw some light on the plans which we have or how we are planning overcome the challenges which is raised?
Yes. This is a very good question because the 30 to 100 megawatt segment has historically been a market which is 1.5x the size of below 30 megawatts. So there is a substantial increase in market size -- the applicable market size for Triveni to venture -- to operate in a stand-alone basis. And we're quite excited by that. So there are 2, 3 different issues around that. One is in terms of technology. From a technology perspective, over the last 10 years, while we had a joint venture, which was and did execute projects within the 30 to 100 megawatt range. As far as executed projects from that joint venture were concerned, over 50% of the installed -- executed projects were done on Triveni Technology. So we do have references in that technology range, which is applicable for the market which we are addressing.
So that is one. We further continue to do technological development in this range, both in the lower, say, 30 to 45 to 55 megawatt segment as well as higher to be able to get energy-efficient, cost-efficient products to our customers, which is the same methodology we use in the below 30 megawatt segment. So the blade profiles and the structure analysis and the fluid dynamics that we would use would be common to a large extent, amongst these product ranges. As you would know, the market segment above 30 megawatts for us is the same principal market, which is industrial in nature, where it's heavily customized. And so our product philosophy and design philosophy of being modular and being able to execute these projects to a high degree of customer confidence stays consistent.
The second part, which is a little bit more difficult is the sales aspect and marketing aspect to get customer confidence to be able to quote. And this is a process that happens slower. But our ambition is over the medium term to have equivalent market share as we do have in the below 30 megawatt segment to the higher segment as well. And we are making all efforts, both in terms of our agent network, our customer engagements as well as having a greater on-the-ground presence, which will be supplemented by our aftermarket business to give greater customer confidence in the higher megawatt segments. The higher megawatt segments tend to be driven by companies which are larger in nature and therefore, have supply chain departments, which take -- which process orders as opposed to smaller companies, which are more entrepreneurial in nature in terms of placing orders. So there's a greater degree of customer confidence that has to happen from a branding perspective as well. And so we are aware of all that steps that we need to take. The journey will be slow, but we are confident that we would be able to get there.
Okay. So like just a follow-on. So just I'm trying to understand the use case. Let's say, there is a cement company which was using Triveni's 30 megawatt or under 30 megawatt product. But now because the expansion of capacity is also taking at a larger scale, they might enter into a captive power plant, which is, let's say, 50 megawatt or 75 megawatt. So is Triveni being invited for that tender? Or as of now, that is getting difficult for us?
No, no. That is as if you have an insight into our enquiry book and order negotiations. But no, no, we are fully participating in all these discussions and in ordering processes. But Prasad, can you spend -- give a little bit more color on this?
Yes. Yes. So when we are participating in these markets where we have supplied the machines in 30 megawatts, obviously, customer gives the enquiry for us in 30 to 100 megawatt segment. And some of those success what we got in last year also. So one of the order is a similar success like that. So we are focusing on building the enquiry pipeline and increasing our visibility. Once that is there, the sales process and what customer differentiation factors more or less in sub 30 megawatt and about 30 megawatt, more or less similar grounds in terms of service capabilities and the sales network and all those sort of the things. So we are confident on that. So since the sales process is more or less same, so once the enquiry pipeline is built up, we'll be able to see the success at a faster pace.
Okay. Okay. And is the margin profile of this range -- because obviously, we are entering as a challenger or a new company. Is the margin profile like Triveni claims that under 30 megawatt, we are the only company who is making profits on our product -- on the product business. So in the above 30 megawatt range, how would be the pricing intensity and how are we planning to compete? Like will it be within the existing margin range of the company?
Yes. I mean the thing is Triveni Turbine doesn't directly compete on price. We offer our customers a value proposition. A reduction in price doesn't take place, as you imagine, because these are customized products. So the price for one customer is always going to be different from price to another customer. But having said that, the pricing philosophy is similar amongst all product ranges. There is no discounting that happens based on market entry. It's more from a perspective of geography in terms of customer expectations and the competitive intensity within certain geographies that determines the margin levels.
Okay. Okay. Okay. Second question on capital allocation. Like -- so what I can imagine is that Triveni Turbine largely is a working capital negative business, and it doesn't require that much capital even to expand or to gain. That was because in general, we are getting advance receipts from our order bookings. So now, like considering the onetime payouts, which we bought from the settlement and the cash generation, which has happened because of a good business of yours, I was pretty surprised that Triveni is going ahead with the heavy cash balance sheet going into the next year or so. Like what would be the considerations which the Board has discussed in the meeting, which allow them to take them a stance that we want to run a capital heavy balance sheet, in spite of the business favoring noncapital intensive business?
So you're right. The direct question of the higher cash balance was addressed to the extent that the company decided or the Board maintained the dividend policy as a percentage of a payout ratio of over 30%, which incorporated the gains that we had made on the exceptional item in Q3. I think in specific, the cash balance question is something that will be looked at dynamically. It is only something that we've seen a large jump. 31st March 2022 has seen a cash balance of about INR 759 crores as opposed to INR 341 crores as of 31st of March 2021. And so this near doubling has only happened over the past year. We'll have to wait for a little bit to see how this whole thing plays out from a perspective of capital requirement of the business. You are right that the business is -- does work on a negative working capital basis. It does not have a huge capital investment plans. But currently, nothing has been -- as we brought to the Board and neither has the Board contemplated on this direct matter. But we're conscious of it. I have to say that we are conscious of the matter, but it hasn't been addressed specifically.
The next question is from the line of Amar Kedia from Ambit Capital.
And congratulations on an excellent set of numbers for FY '22. My first question is that within the product and the aftermarket business for the inflows that you have reported, is it possible to get at least a rough breakdown of the export and domestic debt for the year or -- yes, for the year?
Between the aftermarket and product?
Yes, any one because then we can work it out backwards. So any one business, if you can get the split between export and domestic.
Yes. Amar, in general, I don't think we give that breakup. But let me talk about it in a different manner. The margin level in both export and domestic in the aftermarket segment, which is for spares and service, it's pretty much the same. There may be a little bit of difference, but that's dependent on order to order. The refurbishment market segment has a slightly lower margin. But the international domestic markets have similar margin profiles. Export will be slightly higher, but it is not as significant as it is on the domestic -- on the product side. Product has a much bigger difference in terms of domestic and international markets in terms of the margin profile. So I don't know if I'm answering your question, but it's a roundabout way of saying the same as given you an answer.
Okay. Okay. All right. Second is I mean, this drive turbine market, I mean, you have been there on these approvals. And I remember, I think few years ago, you had received one large order either from Kuber or [indiscernible], I don't remember the exact one, but I think this was about 3 years ago. So maybe if you could take a minute or 2 to just tell us what has been your overall progress on the drive turbine market ever since you started getting those approvals.
Okay. Great question. The drive turbine market order that we talked about was with Kuwait National Petroleum several years ago. It was a successful installation. And of course, that led further to better registrations with customers. As Prasad had talked about in this call itself a little while ago, our market share currently is miniscule, and we're making great strides in increasing our presence. Some of that is reflected in our order book directly, and the rest is reflected in our enquiry books. This is not only in international markets but also within India as such which has requirements for drive turbine -- energy efficient drive turbine installations for both upstream and downstream oil and gas processors. So we see a very good market here.
And this, along with -- we pretty much have 4 growth avenues for the company right now. One is, of course, the refurbishment and aftermarket sales that we have talked about previously. We have -- we have the 30 to 100 megawatt market segment, which is growing well with increased focus. The API market segment of drive turbines is going to grow because of our very low market share. Again, to give you an idea, the entire market for drive turbines in our opinion, is approximately the same value size as the below 30 megawatt segment. So that's pretty much doubling our market size there also by approaching the API segment more aggressively and more comprehensively.
And the last, of course, is the fact of the below 30 megawatt growth, which is happening through increased fixed capital formation and increased spend on renewable energy, which has happened to the form of decentralized power generation, especially for renewable energy. So those are the growth avenues. For the year past, we have seen a growth in the order book -- opening order book by 52%. And so that gives us good visibility even though some of those orders will get translated into FY '24. But that, combined with our opening order book -- that combined with our booking bill gives us good visibility of growth in the coming year. And this would be added also by the API market segment, which has somewhat shorter duration dispatches.
Yes. My other question is on your working capital. So this year, obviously, has been exceptionally low on the back of very strong customer advances. But that's also a function of the order inflow, right? So how do you see this panning out? Do you expect your working capital to remain at such low levels? Or do you think that as the order inflow overall normalizes, the sales come back? Yes.
There are 2, 3 areas behind this. One is, of course, increased customer flows. The second is our reduced inventory level. So what you saw in FY '21, even when we had negative working capital, that was because of a reversal loss of inventories. And the fact that we got even more streamlined in our modular manufacturing process and design process so that we could -- there are multiple implications of that, which is both in terms of cost reduction and raw material savings, et cetera, and manufacturing cost savings. But that also led to negative working capital in those years. We don't see a buildup of inventory, which is going to be disproportionate to our growth in sales. So inventory will grow to the extent that the sales will grow. You will see that to be of [ that margin. ]
Order booking, we believe will continue to grow and have a good growth. So therefore, in the short, medium term, we don't see a reversal in this negative working capital. At worst, if it comes to a situation -- and we don't have a receivable cycle which is poor. Receivable at the end of Q4 is always higher than it is in other quarters because usually Q4 is a high dispatch quarter. But having said that, it's all largely under control. We don't seem to have an issue there, given the fact that we get good customer advances of anywhere between 15% to 20% to 25%.
The next question is from the line of Alisha Mahawla from Envision Capital Services.
Sir, first question was for the order book that we have right now, the inflows of the closing order book. How much of the growth is because of increase in prices? Or what is the volume net growth?
You see, every turbine is customized. So if I -- let me answer this question in another way. If you look at the increase in raw material costs from about 50% to about 55%, 50.5% to about 55% versus previous financial year, that 4.5% -- out of that 4.5%, approximately 2.5% was driven by increase in raw material cost directly. And another 2% was driven by a -- little bit more than 2% was driven by the change in product mix being heavily domestic market focused. So majority of the growth in order book has come because of volume led growth.
Okay. Understood. And with respect to your book-to-bill of 0.7, 0.8 kind of book-to-bill is what we will continue with because you've been saying there's some orders that may spill into '24.
I don't know about 0.7, 0.8, but -- and I don't -- we don't typically give the breakup as to how much carry forward is going onto FY '24. But majority, I would say over 90% would be executed in this current financial year. There will, of course, be book and bill for product in Q1 and aftermarket all the way up to Q3.
The next question is from the line of [ Aditya ] from Securities Investment Management.
Sir, few fundamental questions. Sir, how does the company enter into after sales contracts? Do we enter into after sales contract while you sell the turbines? And if not, do we hire agents or a separate sales force for these types of contracts?
You see every order is customized. And so we aim to maximize the engagement with the customer. So if the customer wants greater confidence during the initial sales process to include spares, which are outside warranty spares, we would be happy to engage on that. Otherwise, the conversation starts. We need to hand over the customer for the life cycle of the product, so which is -- which stretches anywhere from 20 years to 35 years of the turbine, maybe 40 years for some turbine. So the engagement is continuous and the engagement on the aftermarket services, like what I did talk about right now, a majority of push on aftermarket services right now is happening on 3 product -- on 3 verticals.
One is upgrades, which is upgrading on the same plinth area, either changing rotors to have better rotor dynamics and efficiency so that there's a better value proposition and a very quick payback. I mean, matter of months payback to customers. Second is a higher degree of automation, which enhances our service offering and gets new service streams onto the customer. And the third is a more integrated offering to take greater liability, which is through AMCs. Now all of these offerings depend from customer to customer and where in the sales process cycle it happens. A lot of this is dependent directly on our capabilities. So it's very difficult for an extensive agent and sales network to do it. But we do leverage our sales agent and sales network as well. So there's a combination of everything, but it depends from order to order how it happens.
Yes. So can we do repairs on overhauls for turbine which we have not [ considered ]? So are we also receiving orders for those?
Yes, that is a whole market segment called refurbishment, which we call it third-party services.
Right. And sir, though the company was in the process of commercializing for the supercritical CO2 turbine, so does this address a completely new market? Or is it an improvement of the existing turbines that we -- [ it is with the same ] market?
No, no. It's fundamentally a different product. It's fundamentally a different market segment. They certainly give you cannibalization, if you do look at it from a condensing model perspective for steam turbines. But this is something that we believe of -- piloting is -- prototyping is over, piloting is currently underway for certain applications. And this is a medium-term project for the company where we would be able to show really world-leading technology and a very strong value proposition as well. So we're very excited about it, but it's not something that's going to give any revenue in the next couple of years.
The next question is from the line of Amit Mahawar from Edelweiss.
Nikhil, I just have one question on the after sales now. Our business is now almost going to INR 30 crores aftermarket and almost 27 [indiscernible] of revenues. Generally, in last 4, 5 years, the way we've ramped up our sales force, like in India, out of India, how have our market share would have grown broadly on a global scale? And 4, 5 years down the line, what is our general target on positioning of aftermarket as a percentage of sales or the global market share?
Thanks, Amit. Amit, it's very difficult to have market share data on aftermarket because majority of sales go directly to OEMs and are not reported. So we look at absolute growth in this business. With the assumption that very frankly, as far as the global market for -- because what is our market -- we're talking about rotating equipment is our market. It's not only limited to steam turbines. We have a negligible market share. So therefore, there's only room to grow. And so for us, the benchmark is absolute growth here rather than any market share growth that I think is not meaningful for us. But what is meaningful for us is the market share that we do have for our own steam turbines, Triveni branded steam turbines that we are servicing. We aim to have that in excess of 95%, where we are servicing our own turbines, that market share is very important to us to ensure that we have a long-term committed relationship with our customers.
It doesn't happen always, but it's very important for us to maintain a very, very high level there. The growth in this business is to -- will be proportionate to an extent on the installed base that we have and so the increased offerings that we can give our customers. The larger our installed base, the larger the offering that we can have on the aftermarket side, and that will continue to grow very well. We cannot really price gouge this market because we want to have a long-term relationship with our customers. It's very important that margins are high regardless. There's no reason for us to be excessively greedy or we have to ensure that the customers are happy with paying what they want to pay. So that's for the steam turbine side.
As we expand this onto other ranges where we -- or ranges where Triveni Turbines are not directly in the market segment that we're talking about, which is the refurbishment side. Here, it would be a question of what is the value addition that we play at. we could have very low value addition services that we offer such as overhauling all the way up to life extension upgrades, which requires a much more -- which requires much more technology and much -- and possibly much more liability also, which also then afford much higher margins. So we don't view this business from a market share perspective. We look at it from absolute growth, and we aim that this market -- that we have to grow this market considerably in the years to come. I think we'll have very good successes in the coming quarters, and it'll give you an indication as to how this business will grow. But we seem to be hitting a threshold in this business where this will independently grow off the product business itself.
Fair. Fair. Nikhil, but maybe one bookkeeping. So vis-a-vis in the current revenue, what is the share of Triveni service buying to the percentage of sales in aftermarket vis-a-vis say 4, 5 years ago? That will be helpful.
Yes. Amit, we don't give the breakup of aftermarket between refurbishment and our sales. But in general, if the entire business is growing by upwards of 25%, our own installed base, I mean, the sales of our own turbine services happen on a lag. So the fact that we've had 20% plus product sales growth in the current year doesn't mean that the Triveni Turbine-based aftermarket has grown by 20%. Our growth will be sort of like with a 3-year lag. So to that extent, that is the extent that Triveni base in services has grown which is with the lag. But the refurbishment has grown far quicker, and we believe that, that will continue to grow far quicker going forward.
Ladies and gentlemen, that would be our last question for today. I now hand the conference over to the management for their closing comments. Thank you, and over to you.
Thank you very much. Ladies and gentlemen, we are very happy to end Q4 on a very positive note. We are extremely optimistic for the year to come. I think our indications of order booking and revenue in the coming quarters will give you an indication of the growth that we see not only for FY '23, but for FY '24. Triveni Turbine, I think, is placed at a cusp right now for growth, both from a technological as well as HR perspective. There will be some challenges that we will face along the way, but we think that as a management, we are very well placed for the future. Thank you.
Thank you very much. Ladies and gentlemen, on behalf of Triveni Turbine Limited, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines. Thank you.