Triveni Turbine Ltd
NSE:TRITURBINE
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Triveni Turbine Ltd
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Ladies and gentlemen, good day and welcome to Q4 and FY '23 earnings conference call of 20 Triveni Turbine Limited. [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.
Good day, everyone. And a warm welcome to all of you participating in the Q4 and FY '23 earnings conference call of Triveni Turbine Limited. I have with us today on the call, Mr. Nikhil Sawhney, Vice Chairman and Managing Director; Mr. Arun Mote, Executive Director; Mr. Lalit Agarwal, Chief Financial Officer; Mr. S. N. Prasad, President, Global Sales Products; 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 will 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'll start this call with opening remarks from the management during 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 and a very good afternoon to all people participating on this call. And welcome to the Q4 FY '23 investor call for Triveni Turbine Limited. We're very happy to have you here today because it's been a record year for us and a record quarter as well. We've had the highest ever annual revenue EBITDA and order booking along with a record closing order books position for FY '23. This all augurs very well for FY '24 as well. The record revenues of INR 12.48 billion in FY '23 was an increase of 46.4% year-over-year. While EBITDA for the year stood at INR 2.76 billion, which was higher by 43.9% year-on-year with a margin of 22.2%. The profit after tax for the year was at INR 1.93 billion, an increase of 57.7% year-on-year after adjusting for the exceptional income in the previous year.We also had the highest ever annual order booking of INR 16.05 billion during the financial year, an increase of 35.6% year-over-year, which led to a record outstanding carryforward order book on the 31st of March 2023 of INR 13.28 billion, an increase of 36.9%, which again, as I said, augurs very well for the financial year FY '24.The company has also, during the course of the year, had 2 schemes by which it has paid back capital and equity to shareholders, one was through a buyback and the other was through a dividend. The buyback was to the extent of INR 190 crores during the year, which including taxes and other charges totaled about INR 240 crores, including a dividend of INR 50 crores, the total payout to shareholders was in the extent of about INR 290 crores for the financial year. The return on capital employed was 32% and the return on invested capital, excluding cash on book was over 250%.The company has a stable cash portfolio of INR 6.71 billion, which is down by 11.5% based on the outflows that we've had during the year. But the cash accumulations for the year have been fantastic. We again have had a higher free cash flow than our net profit. We've had a negative working capital again for the year ended FY -- in 31st of March 2023.Coming to the order booking. The product order booking for the financial year increased by 22% year-over-year to INR 11.43 billion, the highest in the company's history. The finalization of orders happened from all segments, from industrial customers, followed by power producers as well as API drive turbines. The company received orders from over 27 countries as compared to 22 countries in the previous financial year. And the majority of the order booking continues to be from nonfossil or renewable energy-based solutions, solidifying our market position in this rising segment.We also witnessed strong contribution in the domestic markets from sectors such as sugar, distillery, food processing, paper and pulp, chemicals and waste heat recovery coming from segments such as steel and cement.In the international market, the company was able to close key milestone orders in both small as well as large power ranges of turbines from regions like Europe, Africa, Central and South America as well as North America. The overall inquiry generation for the year increased by over 41% year-over-year in FY '23 to over 9 gigawatts. In FY '23, the aftermarket segment experienced an extremely strong growth, owing to a significant influx of new orders. We also, as I pointed out during the course of the year, received major orders from the SADC region, which we have alluded to in the cost of other expenses, other expenses, which are part of the notes of accounts.To reinforce its customer-centric philosophy, the company has strategically located service offices throughout India and international offices in Europe, West Asia, Southeast Asia as well as Africa. The success of the aftermarket business is evident in the order booking and sales growth in FY '23, which saw increases of 88% and 82% year-over-year. The aftermarket contributed to 29% of order bookings for the year, up from 21% in FY '22. And the company is confident that this segment will continue to provide a significant share of its overall growth in the coming years.During the year, the company continued its growth, both in the domestic and export sales. However, export sales reported a relatively higher increase of 121% in the current year. And the export sales, as you would know, would be based on the order booking that we had in FY '22 as well as the booking bill that we had in part of Q1 as well as part of Q2 of FY '23. And as a result, the contribution of exports in total turnover has increased to 45% in FY '23 versus 30% in FY '22. Exports are a core focus for the company as we believe a significant part of our long-term growth will be derived from our initiatives in the international markets.In FY '23, the aftermarket segment experienced strong growth owing to an influx of new orders. And this has strengthened this segment already. But I have to admit that there is more work that we have to do on the internationalization of our efforts as well as especially our workforce.On the R&D and engineering efforts, the company's global focus and outreach are evident in its constant efforts to file for patents and industrial design registrations in various international jurisdictions, while simultaneously expanding intellectual property portfolio in India. The company has filed for IP protection in all geographies. And currently, it has over 338 IPIs, which it has filed for -- unique IP that it has filed for, up from 316 IPRs in the previous year.As far as the market update goes, and I'm sure a lot of you would be interested, we saw a degrowth in the total international market from an excess of 12 gigawatts to about 8.8 gigawatts. This was due to a significant reduction in the size of the Chinese market and orders that replaced the Chinese market for this last year as well as a segment of gas turbine combined cycle. Both of these segments are markets that Triveni Turbine does not participate in. In fact, for the markets in which we do participate in we've seen a growth in the market. And we believe that if we look at next year's data, which is calendar year FY '23, we will see a reversion to the long-term mean of a growth in this entire market of industrial heat and power as well as renewable energy solutions.The inquiry generation, as I said, for the company, increased to 41% to in excess of 9 gigawatts. This was led by an 82% increase in the export inquiry book, while the domestic inquiry book declined by about 16% year-over-year. We are not perturbed by this number of a decline in the domestic inquiry book as the segments in which we are -- in terms of the growth that we are seeing in the domestic market, it still seems to be quite robust.Our data for inquiry book in the domestic market does not include tender-based data, which is based on government procurement, which we -- which has been quite good in the last several quarters, and we believe will be very strong in this current year. Given that fact, there will be overall growth in the domestic market as well as in inquiry book if we do include government tender data.For Triveni Turbines, we are extremely optimistic on the resultant end order booking at the end of FY '23, which gives us very clear visibility on the revenue that we would be able to achieve in FY '24, which will be a substantial growth over FY '23. With our expansion already completed, we have the capacity now to produce in excess of 300 turbines, and I'd be happy to talk more about our capacity during the Q&A.But beyond physical investment, the company has also added 20% to its workforce. We've increased our workforce by 20%. And we believe that we will be investing further into people and increasing our workforce again quite substantially in the financial year FY '24 as well.The rise of the company's exported aftermarket order booking as well as a strong carryforward order book and robust order pipeline gives us visibility to a very solid year ahead. And both in the domestic and aftermarket, the domestic and export market as well as export, it seems to be giving us great confidence in being able to deliver these results.With that, I'm happy to take questions. I'll hand it back to you.
[Operator Instructions] We have a first question from the line of Himanshu Upadhyay from O3 PMS.
Congrats on a great set of numbers. So one question I had was, if we look at the breakup of revenue and also order booking, the aftermarket has grown at a very fast rate and even faster than the product business, is there any amount of cyclicality in the aftermarket business? Or we can believe that this will always,,,
Thank you. That's a very good question. If I may break the question into 2, 3 parts, our aftermarket comprises of 2 distinct segments. One is parts and service for our own turbine and the other is refurbishment, which is for third-party turbine users. The parts and sales for our own turbines will grow based on the offerings that we have as well as the installed base. And so this will grow -- we would see at a rate of -- which is commensurate with the product sales growth. The outperformance really happens in the refurbishment segment, which is, I won't say cyclical, countercyclical, but it's a little bit more opportunistic at this point in time. We are trying to establish a localized presence in certain markets so that we can build confidence with the general market so that we could get less cyclicality in these refurbishment orders. So having said that, and I'll have Sachin come in here, we are very optimistic that this segment of refurbishment will grow very rapidly in the years to come. Will it be to the same extent of 80% plus growth. I don't know, but we are very -- this is a segment that will all be high growth, and we will try to not this in a cyclical manner. But Sachin, would you like to provide some visibility around the aftermarket business?
Yes, as rightly mentioned by our Vice Chairman, the refurb business is seeing better growth than the part sales and service business. The parts sales and service business is very consistent. And our aggressive marketing efforts for the refurbishment business have started bearing fruit. And as we are expanding our presence in international markets, the trend will be good. It will be a good growth rate. So the cyclic factor is not going to be a big factor. So it's going to be more or less consistent, maybe not such high rates of growth, but a reasonably robust double-digit growth will be there.
And one question more. I mean, one was on this, see this -- we are incorporating a subsidiary, okay? And where we'll be investing INR 5 crores or more to make the Triveni brand more visible. So is that organization or a company will be 100% owned by Triveni Turbine only? Or it would be also jointly owned by Triveni Enterprises because...
Right now, the proposal really hasn't gone up to, let's say, any engineering board as yet. The point is that when we look at the export market for Triveni Turbine and this is for Triveni Turbine only, the question is that this -- we need to improve the recall to customers. We need to improve the branding profile of Triveni, being a technological leader. And we find that missing. So we need to support our sales and marketing efforts on the product side with general branding investments. To the extent that the brand is generic and can be leveraged across more companies, this makes it a little bit cheaper for Triveni Turbine to enter into it. This is a marketing effort, it's a branding communication effort. I think that we'll be able to provide you more data -- more disclosures as and when things get finalized. It was more of a enabling resolution that was passed by the Board to allow for this investment. So we'll provide you more visibility in the months to come.
See, one small suggestion here. In such a similar effort was also done by another engineering company, okay? Where 3, 4 group companies were trying to, means, make a brand through all the other companies, means, everybody unitedly a family-owned organization, again, they were listed companies. But then over a period of time, disputes came. And then the dispute came, everybody is now fighting for the brand is mine, brand is mine and brand is mine, okay? So -- and I had a bad experience.
Thank you. We'll take that as positive feedback, and we'll try to develop some systems, systems already exist, but I think we'll provide you some visibility as to how this is something that may not be an issue for Triveni Turbines in the future.
[Operator Instructions] We have our next question from the line of Amit Mahawar from UBS.
Nikhil, congratulations on great results. So it's heartening to see after sales team delivering some great numbers in '23. I just have 2 quick questions. First is in the global installed base of smaller turbines, what is our current share. That's question #1.
First we have -- hi Amit, and thank you for your congratulations. This has been a very good year. Instead of what we've decided is because the split of the market that we had of below 30 megawatts and above 30 megawatts was a little bit artificial. It was done at a point in time when we didn't -- when we had a joint venture with another party and so to the distinction that we could create. I think from now, we're going to talk about it more in terms of small turbines and large turbines. The market share that we have in the Indian market has been consistent at about 50-odd percent. And that's something that we are quite confident of retaining the market segments in which -- the markets in which we're getting orders from -- for the industry that we're getting orders from seem to be reasonably robust and our inquiry book seems to suggest that we'll be able to maintain that market share. On a global basis, excluding India, of course, our market share is going to be quite small, but the Indian market does contribute quite significantly to the extent of approximately 20%, 25% of the global market. So if we include the Indian market in our total global overall market share, it would still be in the region of -- and looking at it from 2 basis, if you look at the overall market, including markets in which we don't currently operate, which may be such as China, Japan and certain niche industrial markets in terms of applications, our market share should be in the region of approximately 12% to 13%. And in the markets in which we do participate the market share will be somewhere about 20% to 24%.
Second and last question is, if you take the next 2, 3 years, the way we are committing capital, right, and hiring people clearly for global growth. Is it right to assume that the end markets that we cater to biomass, [indiscernible] heating, processed steam-based turbines. The more business cycles go through troubled times because this is an investment which is lower payback. Right? So it will actually be promoting more industries to install process steam-based businesses and that sector is good tail wind for us. So can I say, next 2, 3 years, the penetration opportunity for Triveni.
Sorry, your line is disconnected. We'll move to the next question from the line of Harshit Patel from Equirus Securities.
Sir, my first question is on the domestic cement market. So we have seen a lot of companies increasingly opting for WHR solution. And I think we have also benefited from the same. So in your assessment, what proportion of cement capacity in India has already installed WHR turbines by now. And if you could highlight the same for steam industry as well it will be very helpful.
I think we've answered this question in the past as well. In steel, [indiscernible] companies set up their wastage recovery at the time of installation -- setting up the business, setting up the plant itself. In cement, it's an add-on. And I think at the last point, we said approximately less than 20% had actually installed this. But to come to the question that Amit had had earlier maybe he joined back, I would sort of answer your question as well as to what is driving this demand. So Triveni Turbine is the manufacturer of industrial heat and power solutions as well as decentralized renewable energy solutions. And it's important to remember when we talk about industrial heat and power that this cannot be generated through portable rake or wind. Electricity is a very inefficient means by which to generate heat. And so the relevance of our solution is it's something that the market needs and the market data supports it in the fact that the global market in this range of turbines below 100 megawatts has actually been growing year-over-year. It's been growing more so from a clear renewable energy focus. And the renewable energy focus for segments such as cement, also highlights the need for investments into energy efficiency. Based on NGT mandates, which restricted certain types of fuels such as pet coke, the cost of energy for all producers, including cement has gone up, which validates the investment into energy enhancement initiatives such as waste recovery, which ends up leading toward just to lower cost of energy for the firms. So it's a key driver of -- energy efficiency is the key driver of growth in these segments, just based on high energy costs for the companies.
My second question is on -- we had received large orders from South Korea last year. These were for higher megawatt turbines. So just wanted to check on the execution status of the same. So have we already delivered those turbines? And if yes, then, are there any follow-on orders from the same customer or from the same region? That would be my last question.
I'll first ask Arun to answer the question and the status of the orders. But yes, Korea is a repeating region where we get orders from. So Prasad can add to that but Arun if you could just give some visibility on the orders that we had from Korea.
We have had orders from Korea typically coming between single-digit orders. But at various ratings. As you know, what we have declared earlier is we have a very prestigious order from Hyundai Steel, which is under execution, which will be completed over next year's time. By and large, we are a preferred brand in Korea, and we command a strong market image there. As regards our order status as on date, we have sufficient orders to carry on, and we are well within the plans of growth that we have, which we have indicated to you earlier. Also, as regards the manufacturing capacity, in the current year, we will be manufacturing over 200 turbines. And this is also backed by a sufficient subcontract capacity that we have. And our complete expansion is done now. We have no CapEx in the current year also. It will only be a regular CapEx that is for maintenance. That's how we are positioned on the supply chain and the support for our order executions. Does that answer your question?
We have our next question from the line of Amit Anwani from Prabhudas Lilladher.
Just harping on the global market, which you mentioned, which it's declined from, I think, 12 gigawatts, you mentioned, 8.8 gigawatts. And is it largely also because of the reduction in Chinese market. So if you could elaborate more, are we talking this about up to 200 megawatts? And if can just throw more color.
It is up to 100 megawatts and for the calendar year '23. Calendar year '22.
So what do you mean by Chinese reduction?
There is just lower demand from the -- a few orders that were placed in the Chinese market. I mean, I don't -- the reason -- you can get the reason as much as I can.
And second thing, sir, you mentioned about the 9 gigawatt market. Are we talking about...
That’s the inquiry book. Our inquiry book is --
That again is up to 100 megawatts, right?
Yes.
Sir, second question on the aftermarkets. I just wanted to understand how much of SABIC order is still pending? Are we in pipeline for more orders to be received of that? And how much is the percentage contribution of [indiscernible] in the aftermarket?
The percentage contribution of this, I would say it will be about 15%, 20% in terms of this current order for the full year. But this is -- as we pointed out earlier, we have a unique opportunity to overhaul large utility turbines and we thought that this is a great opportunity for us to expand the breadth of our services, but also to establish our presence with -- in a region, which has very poor offerings for this type of solution. More than that, it allows us to move up the value chain over a period of time to move from what are relatively poorer margin services to a higher-margin spares type order. So I think the fact is that you will see more of these orders coming up in the next quarters as well. I think that what you should take away from it is the fact that this is allowing us to be more locally present with our customers. To the extent that even though exports, as a percentage of sales, increased; as well as, aftermarket, as a percentage of sales, increased but our margins were largely flat. It was a consequence of some decisions that we took to expand turnover more rapidly than we did from the bottom line to be conscious of that. But as we've always said, we anticipate our bottom line to be -- our PBT to be always over 20%. And our efforts is always going to be in that regard. In fact, in this current year, our pressure on margins is a little bit less. We had more export to a percentage of sales which will -- which we will execute in FY '24. We have good orders on the refurbishment and aftermarket side as well. And so of course, we are quite confident of good margins in this current financial year.
And sir, about the market share, which you talked about, 50% in domestic market, what kind -- how much gigawatt we are fetching in the domestic market size? And is it up to 100 megawatt or 0 to 30 megawatt, what exactly is that?
No. I was talking about a small market where we have a market share of about 50%. And the overall market to start -- Prasad could you give some visibility on the overall market in India, what will our market share be?
Yes. Sir, domestic market wise, we are closer to around -- the size of the market is around 2,200 megawatts is our market in domestic. And similarly, the market where we are operating globally, that we're around 4,500 -- 4,400 megawatt is size of the market. In domestic, as our Vice Chairman mentioned, our market share is around 50%.
Right. So this is 0 to 30 megawatts?
0 to 100 megawatt this covering up to 100 megawatts.
We have Mr. Amit Mahawar from UBS back online.
I just will complete the question. So assuming that globally, the investments towards biomass [indiscernible] and process steam keeps going on. Are we having enough capacity both from supply chain manufacturing to ramp up our market share because we have certain advantages on cost side on after sales ramp-up. So that's first. And second is basically more -- yes, that's my first question.
No, it's a very good question. We -- I think we -- and Arun answered this while you were logged off, but our expansions of -- that we needed to do in our factory and so put [indiscernible] complete. We will be producing in excess of quite a bit in excess of 200 turbines in the next -- in FY '24. And based on our current capacity in-house as well as with our vendors and subcontractors, we don't believe any capacity constraint is an issue for us. As we've seen, we can expand our capacity within 8 to 9 months. And for the next couple of years, at least, we have no issue in terms of capacity in both on the manufacturing end. We consistently work with our supply chain to ensure that there's a active capacity that they have for products that are required from a balance of plant perspective. And so all of it needs to be taken into consideration while executing an order. So we don't believe that capacity is a constraint in the -- in our supply chain.
And the last one quick on the API drive turbines. How have we performed? And how do you see that market for us in the last -- next 2, 3 years, especially the acceptance of vendors for Triveni.
Yes. So the main question acceptance is over. Prasad, can I ask you to provide some visibility on Amit's question?
Yes. So API drive turbine market, yes, in previous meetings, what we have shared, yes, our acceptability is quite good. We are in the approved vendor list in major OEMs and the EPCs and the consultant approved us as approved vendors for that. And because our presence in the market share-wise, we are on lower single digits because we see this a big opportunity being available for us going forward. But it is a time-consuming process because the API finalization approval process took time. Now what we see going forward, yes, we'll be seeing these benefits of these registrations. But as on today, our market share is quite -- not small in that, and we see that good potential.
So [indiscernible] in this segment as well Amit, and we believe that this will be a driver of growth in the years to come. More than that is -- one is the API drive turbines, but we see the API power gen market also, it's something to be quite robust, especially in countries like India, government expenditure in the API segment is very good, which includes fertilizer as well as upstream, downstream oil and gas.
We have a next question from the line of Ashwani Sharma from ICICI Securities.
Congratulations on a good set of numbers, sir. First question is on the growth. If you can just give us a breakup in terms of volume growth and price growth for the quarter?
Unfortunately, we don't do volume and price. We don't give it in terms of rupees only.
The second question is, if you can -- this expenses which were there so subcontracting expenses in SADC market. So will these expenses will continue in FY '24 as well?
Yes. So the point was these expenses literally subcontracting charges for personnel. When you overhaul turbines, you need to have people. And so these contracts, we believe are something that innovative for the company, and so they will continue. There will be growth in them as well because we anticipate growth in turnover in these distinct segments also. So -- but I would -- the alternative here would be to take the subcontracting charges and put them above the line, and then we have a more diluted gross margin. So it's -- I think it's better to put it here because it reflects the business more appropriately. These are not raw material costs and these are charges which are paid for subcontracting of personnel, and it reflects the cost better. The fact that it has be highlighted through a note is the governance of it only. But it's routine business, you could imagine. It is a fact that we have to highlight it because of significance of the value.
Sir, third is on the guidance. If you can just give us some guidance in terms of top line growth for FY '24 and margin -- margin [indiscernible].
Actually, I think we did a little bit of mistake last year when we said that we would be growing by about 35% CAGR for FY '23 and '24. As you've seen with that, our growth was significantly higher by over 45% in FY '23. I think FY '24 is starting off in an extremely robust picture. We have an opening order book, which is over 35% higher than what it was on 1st of April 2022. And so we're in a much better position. The growth in order book gives you an indication of where the market will be. We have, of course, Q1 and Q2 of -- whole of Q1 in terms of product book and bill as long as they are smaller turbines and part of Q2 also. And for the aftermarket, [indiscernible] Q3 in terms of book and bill. So -- and the inquiry book was quite robust. So we're quite confident on the growth. In terms of pinning me down on a specific number, I think, suffice to say that the growth will be quite robust. It's -- our earlier guidance is something that I'm not going to track this will be back at least. So that's not something that we look at. Margins are something that really, like I said, there's no pressure on margins. There's always a need for us to better it, I agree. But at this point in time, what we would rather do is take market share, get more presence locally. We need to get more manpower, which doesn't pay off immediately. So that will be adding to our overhead. So there are certain costs that will go up also, but margin is not really a concern based on the fact that we know what the margins that we've taken our orders on, we've locked in a lot of our costs. And so we're quite confident for the year to come.
We have our next question from the line of Rakesh Roy from Omkara Capital.
Sir, my first question is regarding the aftermarket, you have mentioned 2 parts like a part of sales and refurbishment. Sir, can you highlight on refurbishment market, how much on the market side, domestic is normally and where you are?
Yes. So the point of refurbishment is that it's a very large market, both on the sector of scope, scale and value. So when we look at refurbishment, it is a refurbishment of rotating equipments, including steam turbines, which is where we are in OEM. And it would move anywhere from lower value addition works such as overhaul all the way up to upgradation and energy enhancement. So the value chain is quite large, and it's usually undefined. What we can say is that approximately 50% of the market is catered to by OEMs and 50% of the market is catered to by non-OEMs. So there is significant growth possible -- and India is really an undefined as to how large the market is for third-party services. We don't have any companies out there offering it on a third-party basis. But this market exists in many other places, and it's a much -- it's a very robust market, especially in the gas turbine space. So if you look at the gas turbine space offering this as a third party on a third-party basis, it's quite a large market, and that's largely centered around the more developed economies.
Sir, my next question is, sir, can you give you the breakout of the order book in this sector...
So I couldn’t understand your question. Can you speak a little slower?
Yes. Sir, can you say the order book could break up from which chapter we get orders like the --
We don’t give that degree of data because it's not relevant, I think. You know the industry that we get it from. And I think that, that's reflective of the fixed capital formation in the economy. Sectors such as distilleries continue to outperform. We see good growth there. There's a good demand, which is backed by the government push. You have certain commodity-based industries which have a commodity pricing upswing, which are doing well, including paper. You have markets on the recycling side of recycling paper as well as plastic, which is doing well. You have a few orders which we're very happy about, which are coming through in the municipal solid waste incineration space is something that is quite encouraging that local municipalities are taking this problem seriously. We have wastage recovery orders which are coming from both cement and steel. And you have orders on the capital space as well, which is reflective of demand. In general, we also have some food processing orders also.
Last couple of questions. So I try to understand, sir, maybe I did, sir, okay, your aftermarket sales increased from 27% to 33% of revenue.
Yes.
Yes. So year-on-year. But sir, margin is flat. EBITDA margin. So where I missed your -- missing sir?
Yes. Like I just explained, so one of the reasons is that this large order that we have from the SADC region is something that is, I think, overall margin dilutive to the aftermarket business. But if you look at the company overall, it's a strategic area that I think that we would like to be into that allows us to move up the value chain once we are locally present in a certain area. Through this current offering, we have over 1,000 people who are subcontracted through us. And so we have a very large local presence without much liability, but large local presence, which allows us to gain the confidence of local customers, and that will pay off in many different ways.
We have a next question from the line of Prolin from GMO.
A couple of questions from my side. Is that one -- in the past calls, when we had a very robust order book, we had a visibility in terms of revenue for more than a year, right? Because our inquiry pipeline was also strong. Now in this quarter, you have mentioned that the inquiry pipeline attrition in the domestic market is seeing some weakness. So how important is it for our overall consolidated business for the inquiry pipeline in the domestic business to again see some growth, right? I mean -- and what -- can you give a little bit more color on why is this...
[indiscernible] Even though we've seen a degrowth in the domestic inquiry inflow that is from private sector. When you include government tenders or PSU tenders, the market is much, much higher. So the fact is that it's just because those are binary events of winning and losing, we don't need examine now it's in our inquiry book. But if you include that, actually, the Indian market is actually quite robust. You see definitely growth in the market cap going forward. The -- our end order book, as I suggested, has nearly -- I'm going to say about 90% of the orders will be executed in FY '24, 10% will go on to FY '25. But that's normal for any year. More than anything else, the inquiry, the order booking that we had in Q1 till date because it's already late for the meeting that we're having, is very robust. Which gives us full confidence for the growth in this financial year.
And is the -- I mean, have we in the past, participated in government tenders? And what could be our conversion rate for these tenders? And would this be at a similar margin compared to the private sector?
The margins are not dilutive. We don't price on a differential basis, maybe slightly higher than regular margins, I think, in the domestic market. But I think we have a very good percentage of winning government tenders, but they aren't very often. We may get one every couple of years or 2, 3 years. I mean that -- Prasad, would you like to add any color on this?
Yes, sir. In the government tenders, yes, these are large scope tenders. So yes, the margin wise, there's no different strategy we adopt. The margins are quite good. And these are on a time-bound projects, what we are -- sometimes we see sudden delays in finalization and all. That is the reason we are not considering in this 9 gigawatt inquiry pipeline. But as and when this comes into finalization phase, again, based on the competition and all, winning or losing that time we take. But based on the historic data, whenever we participated in the tender so we got a good success. So we are hoping towards that.
I would just say that usually, we win if we participate.
And one last question would be, again, on this international series where you are saying that our visibility is slightly lower, and that's why we want to probably form a subsidiary which can probably help us increase our brand presence. So is there any particular niche segment where our visibility is lower because what I would have thought is that in typically your B2B business, you would have to probably execute a few orders, prove our mettle and then probably we will get...
Visibility is a different problem than branding and perception. Visibility is the issue of being able to be close to the customer to make sure that they're able to get an inquiry out of them. That is a physical sales-led effort, which is backed by agents to be able to provide that visibility. The intangible of being able to have a better perception is something that we need to work on from a branding perspective. But we need to do it at a low cost and something that we think will be manageable and controllable by the company.
So is it -- it's not any different [indiscernible].
Mr. Prolin, sorry, but your voice is sounding muffled. I'm sorry, we're not able to hear you. We'll move to the next question from the line of Devang Patel from Sameeksha Capital.
Sir, on the overseas business that we have, could you give some more color on what is the contribution we get from different regions or continents or maybe developed markets versus...
Yes. The nature of the product is that it is customized. Because it's customized from a performance perspective, it's customized from a order scope perspective also. So the scope can include and exclude certain things based on what -- how the customer is looking at it. In general, the more developed the markets are higher the specifications and the higher specifications, the higher the margins. The -- let's develop the market, the lower specifications and the lower the margins. This is the generic, not only [indiscernible] to our business but to every business. And so you can see from orders to orders that certain industry is also different. So for example, a high-tech industry in India would give you the same margins, but a low technology industry in India would give you low margins. Would it be different from a low technology business internationally? It's more comparable industry to industry in terms of the technology deployment than it would be from geography to geography. But geography also gives us a good estimation. The fact is that in Europe, we see demand coming from areas such as solid municipal waste incineration and renewable energy, where the end product -- the end demand from the customer is our production. And so when efficiency matters to such a large degree, I think you have greater flexibility in pricing. When you -- when it's -- when the turbine requirement is more from a perspective of just providing steam to a process in a low-tech industry, the price is a very important factor in consideration. So therefore, margins are lower.
I was also trying to get a sense of what is the revenue contribution we get from Europe, North America and Africa, South America developed versus less developed countries.
Yes. Unfortunately, we don't give that data because it changes so consistently every year. Like I told you, we sold to 27 markets last year and 22 the year before. We have a total installed base in over 75-plus countries and we've sold turbines in over 80-plus countries. So very frankly, it's difficult for us to ascertain anything out of it. And so we are sort of reluctant to give that information because we don't think it could be meaningful.
And generally, when you say we have a lot of headroom for growth in our export business from which area -- which continent will this come from?
In general, where the size of the economy has determined the capacity for fixed capital formation and our product fits into the fixed capital formation part of an economic growth. So the larger the economy, the larger the contribution to our inquiry. But the confidence we get is because our inquiry book is somewhere in excess of 9 gigawatts this provides us ample opportunity for us to approach it, and a significant portion of it, of course, as you would imagine, is from the export market. And so that's how our confidence that we get from -- for growth.
We have a next question from the line of [ Demel Sampat ] an individual investor.
A few months back, we were talking about supercritical turbines. And also, we were looking at another similar or adjacent product line. Now that I'm seeing that we are doing very well in refurbishment and API turbines, which is a very vast market and we are -- it is very profitable. So are we now going to concentrate on these 2 markets before looking at anything else for the next 2, 3 years? Just one question.
You're right on one aspect, the fact that we're seeing good growth. And so our priority is to capture that first, is -- are these developments and product developments that we talked about, are they put on the back burner? No, not at all. These are something that we continue to invest in. They just don't take prominence because I think much more immediate efforts that we -- that would reflect on results more in the short 1-, 2-, 3-year time frame. These product developments will go into the market. They are already being piloted in different ways. Some technologies have, I'd say, more -- somewhat of a cost proposition. But those are things that will get sorted out over a period of time with volume. But in general, they've not been -- they're not dropped off the list. It's just a question from a priority perspective, they just don't make it to highlights of talking on these calls.
And next 2, 3 years, no major CapEx will be there because I mean, your capacity is sufficient for this?
The thing is that like we've always said, and I said -- I alluded to in my opening remarks that I think our internationalization is not as quickly as it should be. We are getting international orders, but the internationalization of the company is a little slower than what we had expected. And so to that extent that we can be closer to customers, we are going to continue to push for that. Would that require CapEx, possibly, how much of what we look for has back to you after taking through the Board. But as you could see from our investment in South Africa, these are not significant investments and pay back quite quickly.
You've got a very good market and the very good sector. Congratulations and all the best.
Thank you very much.
We have a next question from the line of Amit Anwani from Prabhudas Lilladher.
Just one question on exports. Obviously, you highlighted about a lot about it. What can we target share contribution from export? And second thing, you mentioned about penetrating into new geographies. So if you could just throw some more color on which geographies and what kind of industries you are looking into these geographies, megawatt or something on that?
So I need to take the second question first the way I understood it. The geographies that I think are very attractive to us are the geographies that are growing, which is essentially North America and Southeast Asia. We see -- for our segment of growth, we see something like the Inflation Reduction Act being a real propellant for growth in the renewable energy space, something that we would like to have a good share in terms of the products that are sold and the demand. Similarly, with Southeast Asia, the demand would be driven not only to the renewable energy, but also for industrial CapEx, and we think that we'd like to be part of that. Sorry, your first question was
Target export.
Target export. If you look at it, that cover over 70% of our inquiry book is from the export market that gives you an indication as to where our growth will be going forward. We -- of course, from a margin perspective, it's much better. We think that it's important for us to have a high market share in India, and we'll always take that so as to ensure that we have good control over our supply chain and cost structure and also keeps us getting grounded in terms of pricing and it allows our engineering to continuously value engineer to take costs out. So from the export market as a percentage, I think we had 45-odd percent in our order booking in turnover. I would think that that was pushed significantly by the overall order that we had from Southern Africa. But going forward, we would anticipate in excess of 50% in the short to the medium term and in the longer term, significantly higher than 50% coming from the international market.
Sir, if you could just also mention how much number of turbines we did in FY '23 versus FY '22 if it is possible for you to share?
Arun, would you have that data?
Yes. We have produced about 190 turbines. And some of them were recognized as a revenue, others were in transit.
We have a lot of inventory, which is in transit.
Yes. That's right.
And this is how much versus FY '22, percentage-wise?
It would be roughly about 70%, 80% more. In FY '22, we made 116 turbines.
[Operator Instructions] As there are no further questions, I now hand the conference over to management for closing comments. Over to you, sir.
Thank you very much. Thank you, ladies and gentlemen, for participating in our conference call. We've had a record year in every manner. The team has worked very hard, and we are -- we anticipate another record year in FY '24. And we look forward to engaging again with you at the Q1 results. Goodbye.
Thank you. On behalf of Triveni Turbine Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines.