TD Power Systems Q3 FY26 Earnings Call — Analysis (NSE: TDPOWERSYS)
TD Power Systems reports record quarterly order inflow of ₹656 Cr, raises FY27 revenue guidance to ₹2,200+ Cr, driven by exports and data centre demand.
The take
9MFY26 Consolidated Total Income (9M) ₹1,280 Cr ( +36% YoY ) . Guidance raised — FY27 fy27 standalone revenue ₹2,200+ Cr . But walked back — US-India trade deal uncertainty . New story: Capacity expansion and market share capture .
Financial highlights
| Metric | Value | Change | Basis |
|---|---|---|---|
| Standalone Total Income (9M) | ₹1,194 Cr | +32% | yoy · 9MFY26 · vs 9MFY25 |
| Standalone EBITDA Margin (9M) | 18.33% | +88 bps | yoy · 9MFY26 · vs 9MFY25 (17.45%) |
| Standalone PAT (9M) | ₹154 Cr | +41% | yoy · 9MFY26 · vs 9MFY25 |
| Consolidated Total Income (9M) | ₹1,280 Cr | +36% | yoy · 9MFY26 · vs 9MFY25 |
| Consolidated PAT (9M) | ₹166 Cr | +37% | yoy · 9MFY26 · vs 9MFY25 |
| Manufacturing Order Book | ₹1,845 Cr | +na | point_in_time · Q3FY26 · as of Dec 31, 2025 |
| Order Inflow (Q3) | ₹656 Cr | +61% | yoy · Q3FY26 · vs Q3FY25 |
| Export Order Inflow (9M) | ₹1,205 Cr | +62% | yoy · 9MFY26 · vs 9MFY25 (direct+deemed) |
| Cash and Equivalents | ₹193 Cr | +na | point_in_time · Q3FY26 · as of Dec 31, 2025 |
What management committed to
- FY27 standalone revenue will be ₹2,200+ crores. — INR 2,200+ crores, FY27
- Average quarterly order inflow will be in the range of ₹575-600 crores per quarter in FY27. — INR 575-600 crores per quarter, FY27
- Q4 FY26 production/sales will ramp to ₹550-575 crores per quarter. — INR 550-575 crores per quarter, Q4FY26
- Standalone revenue can reach ₹2,600-2,800 crores without adding bulk capacity up to FY28. — INR 2,600-2,800 crores, FY28
- Hydro revenue in FY27 will be the highest in company history. — highest in history, FY27
How the narrative shifted
- Gas turbine/gas engine export boom: Added detail that data centres are moving to captive power due to rising grid prices, enlarging the opportunity.
- Capacity expansion and market share capture: No reframing; execution milestones achieved and quantified.
- US-India trade deal uncertainty: The contingency plan is not being executed; the risk is deprioritized as customers adapt to tariffs.
- Margin recovery after product mix dip: The specific margin recovery narrative has faded; focus shifted to broader margin resilience through pricing and currency.
- Product diversification into large generators and railway traction: Large generator moved from engineering to delivery; railway narrative unchanged.
- Hydro segment international growth: Upgraded from 'one of the best' to 'highest in history'.
- Export-led order book transformation: No reframing; trend continues.
- Competitive moat through OEM relationships and capacity: Customer acquisition milestone highlighted.
- Copper price inflation and pass-through: Management acknowledges copper price spike and confirms renegotiating all customer contracts to pass on costs, with pipeline of lower-cost copper providing temporary insulation.
- Rupee depreciation benefit: Management stopped hedging six months ago and expects significant bottom-line benefit from rupee depreciation against USD and EUR.
Operational commentary
- Third plant declared operational on 18 Dec 2025; production ramp-up underway.
- Sales run-rate expected to reach ₹550–575 Cr in Q4FY26 and ~₹600 Cr from Q1FY27.
- First 20 MW large generator to be delivered in Jan 2026; larger generators to ramp in CY27.
- Motor business revenue expected to be ~₹150 Cr in FY26, growing ~10-15% annually.
- Hydro refurbishment segment gaining momentum with large order wins and a strong inquiry pipeline.
- Company stopped hedging forex six months ago; benefiting from sharp rupee depreciation against USD/EUR.
- Copper price increases being passed through to customers; existing low-cost copper inventory protects near-term margins.
- US tariffs not impacting order flow; no customer push to move production to Turkey.
- Data centre captive power demand remains robust with visibility up to 2030.
Analyst Q&A
Q. What is happening in the domestic market? Are we being selective or facing capacity constraints?
Vinay Hegde explained moderate 10-12% growth with large orders from steel and hydro; Nikhil Kumar added they are not losing or running away any orders.
Q. Is it fair to say that our guidance of INR 2,200 crores for FY '27 is on the conservative side?
Yes, it is a conservative estimate; the expected quarterly inflow of ₹575-600 Cr and matching production give further confidence.
Q. Are you seeing any slowdown in AI investments that could affect power demand?
Absolutely not, absolutely not; all tech companies have increased AI spending, with demand forecasts from OEMs firm up to 2030.
Q. What proportion of the record quarterly order inflow is driven by data centres?
We are not going to give that information.
Q. What is the implied price growth component in the FY27 ₹2,200+ Cr revenue guidance?
No.
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