Ladies and gentlemen, good day, and welcome to the q one f y twenty six earnings

conference call of Quality Power Electrical Equipment Limited hosted by Assit C

Mehta Investment Intermediate. As a reminder, all participant lines will be in the
listen only mode, and there will be an opportunity for you to ask questions after
the presentation concludes. Should you need assistance during this conference call,
please signal an operator by pressing star then 0 on your touch tone phone. Please
note that this conference is being recorded. I would now hand the conference over
to mister Sidhar Bhamre from Assit C Mehta Investment Intermediate.

Thank you, and over to you, sir. Thank you. Good afternoon, everyone. I'm Siddharth
Bhamre, head institutional research at Assit C Mehta Investment, intermediaries
limited. It gives us immense pleasure at Assit C.

Mehta to host this conference call for q one FY twenty six for Quality Power
Electrical Equipment Limited. I would also like to state the fact that our group
company, Fantomat Capital Advisors Private Limited, was the merchant banker for the
IPO of Quality Power. It is the largest issue done by a single merchant banker till
date in India. This quarter, Quality Power on stand alone basis has delivered
excellent set of numbers. Also, the group companies have witnessed heightened
execution.

Let me now introduce you to management from Quality Power on today's Q1 FY twenty
six phone call. We have Mr. Varnidharan Pandyan, Joint Managing Director Mr. Rajesh
Jairaman, CFO Mr. Sarika Jadar, Senior VP Finance and Mr.

Sachin Sethi, VP Finance. Over to you, Bharni. Thank you, sir. Good afternoon,
ladies and gentlemen. On behalf of the Board and the management team, I thank you
all for joining us today and for your continued trust in the company.

We are pleased to report another quarter of consistent performance. The sector we

operate that is high voltage electrical equipment and power quality solutions is
witnessing a structural long term demand surge driven by grid modernization,
renewable energy integration and digital infrastructure. This momentum is
intensifying globally. It is important to note that this demand is now constrained
by supply, especially for technical advanced products like ours. This is creating a
shift towards a supply driven environment.

Our traditional coin products group under Quality Power delivered a record high
margins of 34% and Endox delivered a margin of 27% with an exponential increase in
revenue growth. Nehru, the recent entrant in the family also has an increase of 45%
this quarter over the last year's operating margins. This quarter also saw us sign
a binding term sheet for an acquisition of Sukruk Electric through a joint venture
with Yash High Voltage Limited. This great gem is again a value buy and allows us
access to hundreds of transform manufacturers in India and abroad for our
instrument transformer and composite product lines. Over the last several years, we
have made conscious of clean investments in technology, global approval and
manufacturing quality.

Today that work is translating into opportunities of scale and strategic

importance. We are now approved suppliers of HVDC and STACOM products with all the
leading global companies including the Chinese OEMs. This opens us doors not just
to immediate orders, but to long term participation in global grid stability
projects. Further, we are on track for key HVDC order announcements in the near
term. These projects are at the highest end of technical complexity and signify a
growing confidence in our capabilities.

Our qualification for such projects reflect our technological achievements. This
quarter's numbers highlight our gradual shift from participating in the market to
playing a more defining role in it. Our order pipeline remains strong with healthy
visibility across sectors and geographies. While we remain optimistic, we are
mindful of ongoing supply chain fluctuations and are planning accordingly. We
remain committed to transparent communication, capital discipline and long term
value creation.

Thank you once again all the investors for being a part of this journey. I now
invite our CFO, Mr. Jayaraman to share his thoughts with this distinguished
gathering. Jayaraman. Thank you, Palliseram.

Good afternoon, everyone. It's a pleasure to share this quarter's highlights. We

have seen strong top line growth. Consolidated revenue rose from INR 80 crores to
INR 194 crores, more than doubling year on year. This reflects sustained demand
across product lines and strong execution across entities.

On profitability, Quality Power standalone delivered a historic EBITDA margin of

34%, our highest ever. EndUp maintained healthy margin of 27%, driven by operating
discipline and a solid project pipeline. Meru's margin stands at 9.5%, but
importantly, profitability has improved by 47% in its first full quarter post
acquisition, showing our integration strategy is on track. We expect further
improvement as synergies play out. The higher consolidated expenditure is due to
Merus consolidation.

Core cost structure at Quality Power and Enthus remain stable and efficient. Cash
flows remain strong, enabling growth investment without impacting profitability. On
PACT, the quarter on quarter moderation is due to a one time ForEx gain in the
previous quarter. Adjusted for TAC, underlying profitability remains healthy and
growing across businesses. Looking at with new additions like SUKREB and continued
group level consolidation, we are confident of meeting our revenue and earnings
guidance for the year.

I would also like to note a minor correction yesterday, a limited review profit for
the month. The controlling interest profit of Q1 financial year 2025 was reported
as INR 31.12 crores. The correct figure is INR 19.37 crores. The interest in this
quarter stems from a temporary promoter support as INR 70 crores interest free soft
loan for proposed acquisition, which also raised net assets. This is purely
strategy with no operational impact.

Group debt stands at INR 13 crores against cash and cash equivalents of INR $2.50
crores. Thank you for your trust and support. Now I'll open the floor for
discussion. Thank you very much. We will now begin the question and answer session.
Anyone who wishes to ask a question may press star and one on their touch tone
phone. If you wish to remove yourself from the question queue, you may press star
and 2. Participants are requested to use handsets while asking a question. Ladies
and gentlemen, we will wait for a moment while the question queue assembles. The
first question is from the line of Pritish Shera from Lucky.

Please go ahead. Yeah. Sir, can you share the revenue for, mail and revenue for
Indox for FY for the quarter one. And, let's say, at the current capacity in Meru
and the current okay. We may first give out the first answer, then I'll ask the
following question.

Good morning, Pritesh ji. Thank you for always being with us. The numbers for NDOX
is Rs 91.91 crores in sales and Nehru is Rs 61.5 crores in sales. For electrical
equipments, it's 41.8 crores in sales and projects, which is our subsidiary, which
is related party transaction, is about 4 crores in sales. And capacity utilization
at Nehru at this moment is close to 95%, but, they are scaling up every month as a
new ovens for the additions coming over.

So Nehru capacity utilization is 91%? At this moment, but they are scaling every
month because they've already new ovens. They have got into warehouses, put in a
lot more effort into what we say into expanding the factory capacity. So that will
come up in the next few quarters. You will see the capacity utilization always
around 95% because of the order book, even with the expanded capacities.

Okay. Mehru, you guys mentioned that it's 9.5% EBITDA margin. What will be the end
of the EBITDA margin? The end of the EBITDA margin is about 27% profit before tax.
Product hand alone, the EBITDA And for quality power, which is the coil product
34%.

The coil product, which is quality power, is about 34% for HVDC and facts where we
are expanding the factory. Okay. And docs, you mentioned 27% margin. Right?
Correct.

Okay. Now from the capacity utilization perspective, even quality is at a high
capacity utilization. Right? Correct, sir. Correct.

And Meru, based on whatever ovens and all that you are adding, so let's say this 60
crores is, 90% capacity utilization. So what kind of capacity and a business size
will we see in Meru, as we progress ahead with whatever capacity expansion that we
have planned? We are anticipating that the numbers may improve by about 20% to 30%
in the next quarter for Meru. And if you take a slightly longer opinion over the
next two years based on the capacity that you're adding in in Meru or sorry, the
capacity which will get commercialized in Meru, what kind of business size will
Meru reach to? The maximum capacity that the current factory can deliver is about
four fifty to five hundred peroz depending on the pricing advantages.

Our current focus is to bring them to the mid teens margin that that has been our
guidance. That is where our focus is at this moment as management. So basically,
it's 110 to 125 crores per quarter. Sorry sorry to interrupt. Pratesh, sir, can you
please hold the device a bit distance from you?

Because there is an airy noise when you are speaking. No problem. Wait a sec. So is
it clear now? Yes, sir.

Now it's clear. Please go ahead. Thank you. It's actually in electrical equipment.
So, at 110 to 125 crores per quarter and 18% margin is what you mentioned in Meru.

Right? At this moment, our current focus is to bring them to around 15%. And when
do you see this happening? Is it two quarters from now, four quarters from now?
Ideally, we are attempting in the next four quarters.

Okay. Okay. And my last question is, on the order backlog of $7.75 crores that you
guys have mentioned, Meru is about 200 or $3.50 crores. Quality power is about I
think INR $2.50 crores and the balance is in box. And execution timeline?

Most of the execution is about twelve to fifteen months. Okay. And what is the
progress on your new site? And when should we see it open? We are ahead of
schedule, sir.

We are ahead of schedule. A lot of people have been put in. We are working with the
best companies in the country. We are slightly ahead of schedule at this point.
Okay.

Thank you very much, Baraniji, and all the best. Thank you, Prathyusha. Thank you.
A request to all participants. Please restrict your questions to two questions per
participant.

Our next question is from the line of Nimesh Sundar from Ellara Capital. Please go
ahead. Yeah. Hi, sir. Thank you for the opportunity.

Just wanted to expand on the previous capacity related question a bit. So I want to
understand, is the capacity hindering our ability to get new large orders,
especially in the HVDC, even the capacities are coming up? I believe it is not
hindering us, but we are not able to take the entire HVDC, order. So let's assume
HVDC order is, say, 100 rupees. We are only able to eat 30 or 40 rupees because
that is what we are able to deliver and not more than that.

When I say 30 or 40 rupees, it is just not my own factory, it is also the current
set of supply chain. That is why we are also putting a CPC factory what you
typically call it the electrical magnet wire. We are also putting across a huge
backward integration that would have advantage but not only of capacity supply but
small improvement in operating margins also. So by then could you expect to cater
to, let's say, more than about 50 to 60 or 70% of the HVDC order that you are
bidding? You would see some orders as we guided, sometime in the h two of this
year.

We will be delivering. Even recently, we won a very prestigious order from Power
Grid along with partnership with Hitachi. We won the 500 kV HVDC smoothing coil.
Each coil is about three fifty megawatts. This is one of the world's largest coil.
This opens up not only approvals with power grid but also domestic supply as being
the only guys who can supply this part of the world. Okay. And sir, is there any
impact of the tariff situation on your exports to U. S? Nimesh, very tricky
question.

At this moment, as you're aware, tariffs are changing every week. So the orders and
the projects of ours are already predetermined, pre linked. So I would not see any
impact in the next twelve to fifteen months. After fifteen months, we need to see
how the geopolitics comes in. However, as I said, right now it's a capacity
allocation.

If the Americans don't want it, we can send the capacity to anybody. So we just
announced a large order intake from Middle East that is for The UAE transmission
company. So customers because we sell in over 100 countries, we are not short of
customers. Okay. Thanks, sir.

And, could you just give your revenue guidance for the year? Last question, sir. We
had given a guidance of between $708,100 crores conservatively at the starting
beginning of the year. This is including all your subsidiaries, including the new
acquisition also? Sukruk would not be consolidated.

It would be a associated company because it's going under a joint venture. So I

believe it would come not come in the main P and L, but would come as investments,
if I'm not given, if I'm correct. Okay. Thank you. Thanks a lot, sir.

I'll get back in the mail. Thank you, Nimesh. Thank you. Our next question is from
the line of Rahul Agarwal from Aventus Capital. Please go ahead.

Yeah. Hi. Am I audible? Yes, sir. You are audible.

Oh, thanks, thanks a lot for giving me this opportunity. So, sir, the first
question that I had was, when I was looking at the recent call, I just wanted to
clarify, the numbers for the bid success ratios that we have for HVDC and SACTS. If
you could just tell me for domestic and international. So, Rahul, in the domestic,
we are the only people. So it is how much deliveries we can give would depend on
whether it is 100% or 80%.

So because a lot of tenders are coming simultaneously every month, we are our
supply chains are not able to take it. It's just not our factories also the supply
chain. So we are working together to be able to take 100% in India. Globally, we
are still at a favorable stage. By the end of next year, when our entire factory is
up and running, at full swing, I think we would not miss so much.

Right now, our hit and win ratio is not because of pricing, it is on deliveries.
Okay. Understood, sir. So the next question that I had was that, you know, in the
documents that are there, the public documents for QB, we, were a little confused,
to to, you know, understand the peers and your clients. So the same names were
mentioned, you know, Hitachi, Siemens, all of the companies that you said were
mentioned as clients and peers.
So can you just, clarify, you know, how this relationship works between us and
them? In high technology businesses, all of us are customers, suppliers,
competitors, partners, and peers. So, in our fax business, we buy components from
Hitachi, Siemens and GE. In their fax and HVDC business, they buy components from
our facilities because these are not overlapping components and overlapping supply
chains. So we are a supplier to all the three big guys that you mentioned across
the world.

Okay. And we are also in competing them in certain businesses. We are partnering
them in certain businesses and we also buy from them in certain businesses.
Understood, sir. So there is no, in the especially in the part where we are
competing with them, there is no threat of, of, you know, sort of them making those
same products later down the line and, you know, eating the market share for us.

Is there is there any threat for that? It is the it is not determined by the
middleman in between. And as a middleman, it is like companies like Quality Power
and, others. It is determined by the utility at the end of the day. So something
like we are now working with Transco in Abu Dhabi, we are working with Svenska
CraftNet in Sweden, Fingrid in Finland.

So those are the guys who approved our company and people in between are just
components and solution providers. So we are approved in over 100 countries. The
technology is well proven. The mode is normally between five and ten years. So
competition now would still take between five and seven years even with the best
people across the world because there is so many utilities.

Even in India, if you see a transmission utility, we have three large players,
Padre being the largest, Adani and Starlight, and the new ones coming in for the
HODC line. So all these, you they will have to approve you. Okay. Understood. And
just one last thing.

Could you just tell us the CapEx number, like, the amount of CapEx that is being
done? I know the capacity number. I just wanted to know the CapEx amount. I believe
it should be around a 125 crores at post IPO. That is what.

A lot of money has been spent in the IPO also. A lot of the achievements that we
bought, about $20.27 crores of equipment that we bought during the IPO is also
being used for the same project. So, Motomotive bought a 125 cross. Okay. Thank you
a lot, sir.

Thank you, all. Thank you. Our next question is from the line of Dev Gulvani from
Care PMS. Please go ahead. Good morning.

Thank you for the opportunity. My first question is what is the market size of our
products while making, HVDC substation? So how much percentage of our products
contribute? At this moment, we deliver three key product lines in HVDC, that is
reactors, various types of reactors, instrument transformers, and special purpose
media voltage transformers like zig zag connected or the transformer. These are the
three product lines which we do.
In the component lines with all the transformers in HVDC, we have now components
from Sukruv that get into those transformers that is our accessories. At this
current moment, we are sitting on these four different, opportunity size. In a
normal, HVDC project, we believe the opportunity size for us is about 200 crores
per order. Okay. And what is the competitive edge of our products that we are
getting so many orders?

How are we different from others? I believe, we have given our peers and, global
competition, we have two guys in Europe. The for the high voltage, we are only guys
in this part of the world. So, obviously, whatever comes or the demand comes in,
the first preference is given to us because we are local, we are able to service
better, and we have proven ourselves in over 100 geographies. It's only when we are
not able to deliver them on the time that we require that it is one normally
outside the country.

And last question, how much percentage of order book consists from India? At the
current moment, we should be about, fifty fifty or maybe sixty forty, 60 doing
export, 40 being domestic. Okay. Thank you so much. Thank you.

Our next question is from the line of Nishita from Sapphire Capital. Please go
ahead. Hello. So congratulations on a very good set of numbers. I would, just, like
to know, that, do you have any new acquisition plans, like, you'd mentioned in
quarter three, if I verify that you are in talks of potential acquisition of Satcon
Energy.

So what is the update on that? Nishita, good question. So the Satcon deal has been
called off since, what we say about three, four months back. It's been mutually
called off. With regards to other acquisitions, I believe, yes, we are normally
hungry for acquisitions based on technology and pricing apart from the culture that
the company brings along.

We are in talks with a few, nothing concluded as of yet. You would see some small
debt that we have put into the company for certain bids. As and when it happens,
I'm sure the markets will know about it. Okay. Also, just wanted to know that from
the new global quality factory that, you built in Sandy, how much revenue do you
expect to generate from that factory?

The facility is quite large. The facility can also make apart from coils a lot more
products including mid sized power transformers. So at the peak revenue from the
facility is expected to be between 1,500 and 2,000 crores depending on the pricing
moment, our focus is to get the facility immediately on, staff the facility and get
the raw material aligned. Our focus instead of numbers is more on execution at this
moment. Okay.

Perfect. And, you the in the margin guidance for five, five twenty six of 15 to
16%, are we still on the same line? I believe so. If you look at most of the
margins that the parent companies are delivering, I think pre Meru, we are still at
very, very high numbers. I think closer to 30% consult.
It's only with Meru coming down, we have been pushed on the numbers. But as soon as
Meru starts increasing, I believe the average would also start pushing. So we are
still in the guidance. No boundaries from that side. Thank you so much.

Thank you so much. Thank you, Nishtha. Thank you. A request to all participants.
Please restrict your questions to two questions per participant.

Our next question is from the line of Sanjay Jain from Intellect Capital Fund.
Please go ahead. Hello. Good afternoon, sir. Thank you for the opportunity.

My question was from the transformer side. So historically, we have seen that the
transformer's capacity utilization of quality power was on the lower side and, with
Mehru coming in. So how does this help? Can you, you know, give us a visibility on,
how does this help with the orders? As in if the synergy is going to work out, or
how are we going to use the existing capacity that we have of transformer?

So, Sanjay, to clarify, transformers and instrument transformers are two different
product lines. Transformers are used to convert in energy from high voltage to low
voltage, what we normally call as distribution of power to be able to feed power,
to utilities or houses. Whereas instrument transformers are used to measure
electricity. So these are much smaller transformers but still at the same high
voltage and more complex technically speaking. Now instrument transformers are
totally different business.

Line has nothing to do with transformers even though all transformers use
instrument transformers, a. B, we have been making transformers non standard custom
design transformers for the past twenty five years. Sometimes we worry about the
overcapacity coming across the world, so we have been also trying to slowly reduce
our dependence on transformers. However, we still do deliver transformers to some
of our key customers and we still continue to export some transformers. The new
factory, we'll be able to take a little more transformer orders.

In the current factory, our coil products being delivering almost 3034% margins. We
are more focused on high profit, businesses because our factory is fungible on
product lines. Okay. Okay. Understood, sir.

Thank you for the clarification. Thank you very much. Thank you, mister Jain. Thank
you. Our next question is from the line of Viraj Mahadevia from MoneyGuru.

Please go ahead. Viraj, sir, please go ahead. Hi, sir. So congratulations on,
stable and up upward results. Can you give us some color as to why you did a joint
deal to acquire, support with the ash voltage, the cost process behind that as
opposed to acquiring it outright?

So, Viraj, that's a very, very tricky question. So I will answer it like this. So
we put a factory, the first factory in England in 2010, and we had to close it down
in 2017. And one of the learnings, key learnings when we ran the factory in England
was the management bandwidth. Now as we are growing rapidly, we want to preserve
the management bandwidth.
We were approved by the management of sucrose, a German company. We had negotiated
a good deal. But transformer manufacturers are even though strategically important,
a very large customer, a growing business is not in the vicinity of our current
sales and strategic team. So we did not want to open up another front end war. So
Yash, high voltage was already establishing themselves in The U.

S, Europe and already had a large set of customers in India, seemed like a natural
partner. So what our intention to do together is to use the brand and legacy of
seventy years of Sukru to be able to consolidate more companies in the Transformer
component and create it as a Board level company. So that is why right from day one
it is taken as a Board level company and this is primarily to ensure that we don't
lose focus on HVDC and Fax, which is high growth, high profit business. Understood.
So this business is light touch for you mainly run by just five voltages.

Is that right? I would say that, we have access to technology marketing customer
base and also internally their customers happen to our customers to our instrument
and composite products. But Yash would bring a significant advantage of customer,
customer connect. So from a customer side of things, I would say Yash definitely,
would need to take the front end. Understood, sir.

Second question is regarding your raw material security. Can you give us sense as
to your raw material basket, whether it comes largely from India, from Europe, US,
or China? Are there any, you know, sort of certain demand dependencies? So our our
raw materials traditionally being 100% India. We don't we make our own special
cables in our vendor, works with our own machinery.

However, we are not able to scale up, that factory because we are typically the
only guys in this part of the world who make those kind of equipments. So we are
spending our own money in developing that facility, where we should be almost
delivering 50 of our needs from that facility, a. B, now for global orders, we are
also looking at importing from China, primarily because the Indian orders do not
allow Chinese origin raw material. So what we are trying to do is we are trying to
use Indian raw material for Indian projects and global raw material for global
projects. At this moment, we do not foresee a problem on cable so much, but we see
a huge problem on porcelain or what we call as insulators.

Understood. And is there a reason you choose to source on China for global orders
versus elsewhere or India? Is it purely just pricing and product availability? Or
the Chinese are actually more expensive when you compare the freight, import
duties, and everything. It is just availability at this moment.

We simply pass it on to the customer. Understood, sir. All the very best on your
journey. Thank you, Viraj. Thank you.

Next question is from the line of Akshay from AK Investment. Please go ahead.
Hello, sir. Am I audible? Yes, sir.

You're audible. Yeah. Thanks for giving me the opportunity. Sir, our order book
currently $7.75 crore. So can you please guide us how much consolidated order info
are we expecting in FY twenty six and what would be our order book at the end of FY
twenty six?

Akshay, ideally we would like to have about one year of order book forward cover
because more than one year the metal prices swing too much for our likes and also
the raw material disability starts dilution. Ideally we would like to be having
about one year to fourteen months of order book. That is what as a management is a
guidance to the sales team. At this moment, we are very comfortable on that. You
would see that we started the quarter with INR $7.50 crores of order book.

Now we have done about INR 194 crores in sales and we still increased order book by
25 crores. With some of the HVDC orders that we are planning in the H2, I think we
should be comfortable. We have already guided that we may have another additional
500 crores of orders by the end of the year. Sure, sir. And, sir, my second
question is more on the fundamentals.

Right? Currently, there is a huge source of trans transformers especially in the

European markets. There is a very huge replacement demand in US and the European
markets. So, as per your perspective, how do you see this market evolving in the
next five to ten years? Is this a temporary demand or is this structured demand, it
will be over the five to ten years?

I would say at 400 kV and above, we are seeing a demand of at least a decade. At
least a decade that is 400 kV and above, 132 kV and below, I think the capacity
that is coming in is so shocking across the world that we keep our fingers crossed.
And because we operate our transformer businesses around that voltage, we have been
very conservative on that. However, on the transformer play where there is any way
demand, irrespective of what the supply is, we have already had one hand with
Sukruv where Sukruv has only two or three peers in India and about 10 peers across
the world. We will contribute at full contribution about 1% of the transformer
value from the component space, which itself is a big business.

So with Yash, we intend to consolidate more transformer components companies under

this approach. Okay. So we don't have a play in the component. Yes. So we are more
on the high voltage demand, especially about the 400 kV.

Right? Correct. That is where we see that the demand because to enter the 400 kV,
you still need a five or seven or ten years of experience. So the utilities
normally would not allow new entrance into 400 or seven sixty five ks without then
experience irrespective of demand because the cost of shutdown is too high, unlike
11 kV or a 33 kV or IDT transformer. So at that voltage, even if people develop
right now, by the time they come in, it will be seven, eight years.

Okay, sir. Okay. Thank you so much for, giving me the experience. Thank you. Thank
you.

Our next question is from the line of Hitesh Randhawa from Kager Quest Capital.
Please go ahead. Yeah. Hi, sir. My question is, on the lines of accounting as well
as other income is concerned.

I think in the last quarter, we said that, out of 53 crores of other income, around
about INR 40 crores were attributable to hyperinflation accounting actually in
Turkey. So, in this quarter, sir, how much of the other income is attributable to
that? I will ask CFO for Mr. Rajesh to answer that, please. Yes.

Thank you. Now, it is now other income hyperinflation in this quarter is coming
down drastically, it has grown not that. I think it's basically interest and other
things. So practically, it's a very minimum because that in earlier quarters.
Ritesh, this hyperinflation formula or whatever we call as a forward hedge is based
on the inflation rate in Turkey.

As the inflation rate is reducing there, automatically the other income goes into
traditional income, operating income. And this quarter, I think the other income is
only INR 2 crores to INR 2 crores, rest of coming in into operational because
inflation is softening in that part of the world. Right. So my sorry to stretch
this a bit further. So what is the exact amount this quarter?

And other common point being, sir, could you please elaborate on why would this
flow into operating income? Because these are hyperinflation related adjustments.
So once Turkey is out of hyperinflation, then shouldn't this just kind of go out of
other income? That's it. And it shouldn't be or it wouldn't be part of our
operating income in that case.

So the extra benefit, second because this is kind of an extra benefit. Right? So
that should go away. Right? Satish, there is, accounting as an engineer, I can only
answer this.

Accounting queries do not accounting entities don't create profits and balance
sheets. Profits are created by sales and, purchase. Okay? That doesn't change.
However, what changes is that let's assume if I do a forward hedge or, what we say
I have to account for, what we say hedge call, where we have to have a dollar hedge
against the depreciation.

Now what happens over the course of a contract, you lose money because the
inflation is 60%. So 60% goes off in your operating income, and the 60% comes in
one quarter as a hyperinflation adjustment. So what happens that adjustment comes
into other income in my operating, I would operate at 3% margin. But if your
inflation is only sitting at about, say, 10%, 20%, then what happens is you do not
lose so much in operation, so your hedge call is not so profitable. But eventually
when you hedge you have technically what we say close your profit at the time of
the order.

Great. Okay, sir. Thanks for that. And sir, as far as the capacity is concerned, I
think EFI and Sahli, Cochin and Mehru, all of these kind of should most of it go
live by now in the 2025. So my question is, incrementally, how much of potential
peak revenue would these three facilities add actually by going live in November
2025?

So, Sanli is not going live in November 2025. Sanli will go now as per the guidance
that is given in Q2 of what we say next year. Skokshan will go live. It's a small
incremental capacity. Meru is giving an incremental capacity.
At this current moment, we would like to stick to the guidance of INR 700 crores to
INR 800 crores. With the next quarter, we would give you any change in guidance
that's required. Okay, sir. Sure, sir. Thanks very much.

Yeah. That's about it. Thank you. Thank you. Our next question is from the line of
Yashovardhan Banca from Tiger Assets.

Please go ahead. Thank you. Hello, Bernice. Hope you're doing well. So I, wanted to
understand.

Am I audible? Yes, sir. You're audible. Loud and clear. So I wanted to understand,
a bit more on the best case, sir, because you, please just stay in the same.

Yes. I think as a returning customer, I should give you the first preference of
normally starting because you are there in every earnings call. Thank you for
believing in us. So Nadeshi, as I told you, is in the IoT and embedded space. Now
in Sukrut, where we bought in the transformer component business, now to develop
the next generation of transformer components where every component is connected
because our transformer, the core and copper is not connected.

That is the iron and steel cannot be connected. It is the accessories in the
transformer which are normally connected, which means that they need to go from an
analog to a digital transformation to be able to be ready for the next generation
grids. Now Sukruv as a team do not have the access to that, whereas, Nadesky in an
embedded IoT network with a kind of edge computing data space can help them get
there. So this becomes our in house product lab, technology center for digitization
of all the I voltage equipments that we are doing. Nadek is also working with Nehru
for creating a separate device, again for digitization of analog to digital
signals.

They are also internally working with us for some other R and D projects. So we use
them for critical R and D projects to be able to create technologies, especially on
IoT software and embedded systems. That's why we decided to increase them slowly
and steadily. Understood, sir. So the developments are moving well, right, now?

Yes. Yeah. Okay. Okay. Okay.

And, sir, the second question is regarding, our best, you know, applications,
which, you mentioned in the last call. So I think we've executed two five of our
projects where we are supplying a few on the EMS, BMS side. So if you can just
touch upon that a bit more in the progress as well. So we have already developed
two projects on BESS, not as an EPC. We are a component manufacturer in BESS.

So we have some sort of EMS and power conversion already deployed for two projects.
Maybe in a year, year and a half, we may qualify for most of the tenders in that
part of the world. But as I said, these are two five megawatt or four megawatt
ones, not at a gigawatt level. At a gigawatt level, we are salting for
acquisitions, which we can bring in because there is a new policy change in India
where the EMS has to be totally domestic from Indian origin sources, the software
that we integrate into grid. I'm sure even the saw conversion would come up.

This would be a large play. We'd have one hand and one leg in it already with the
software and hardware through NDocs. How do we indigenize it? How do we bring it to
scale is a part of execution strategy our M and A team is looking at, and we are
deliberating at every board meeting. Perfect, sir.

Understood. Thank you so much, and all the best. Thank you, guys. Thank thank you.
Our next question is from the line of Sahil Garg from CCV Emerging Opportunities
Fund.

Please go ahead. Hi, sir. Good afternoon. Sir, I have only one question. So, what
kind of EBITDA margin and PAT margins we are expecting on a consolidated basis for
the given estimated revenue of 700 to 800 crore for FY '26?

I mean, why I'm asking this question is because, when company grows both
organically and inorganically, so it is easy to know estimate the top line, but it
is difficult to estimate the bottom line. So, that's why I'm asking. Yeah. I will
answer your question, mister Garg. If you look at even without Nehru, I will just
for a sake remove Nehru.

Last quarter, our numbers was 61 crores. INR 194 minuteus INR 61. We are still
about INR 130 crores organically. We are expanding organically INR 9x. We are also
bullish on technologies with our own current set of numbers and technologies.

But the acquisitions what we are doing when you see a blended margins can go
reducing, but at the magnitude level, our path will continue to increase
significantly because these are businesses that we are buying in for the next two,
three years. Like as I just told you, Nehru, we got a 47% increase in margins in
one single quarter. Now a business of say about INR 300 crores give and take, if I
am able to improve another say 50%, 60% from where they are, my acquisition is paid
for. Okay. So can you also That's the kind of value that we normally bring into
companies.

Sir, can you also put the number to the statement on consolidated level? At this
moment, the companies that we currently operate, we have given a guidance of high
teams. That is the guidance at this moment. As I said earlier, in the second
quarter, high teams. Sorry.

Understood. High teams. Between 1720%. That is where we have given a guidance. High
teams.

Okay. Okay. Okay. Okay, sir. Thank you so much.

Thank you, mister Garg. Thank you. Our next question is from the line of Niladzadeh
from Ashmore Research. Please go ahead. Okay.

Good afternoon, sir. Congratulations on a very good number. Sir, my question is

that given the, usually, we have seen that, margins are higher on the export side.
So is there and you have a subsidiary in Turkey and now after this particular EU
deal has been signed, I think the tariff situation that is more or less similar. So
why are you scaling up or focusing more on the export side or you are more on the
domestic side?

Also in terms of the premium equipments, where the demands are more? Because as we
understand some of the cable or conductor, they are saying that premiums
surprisingly premium products are receiving better margin in India and they are
getting decent margin from the standard products. Can you just throw some lights on
this specifically on since you are on the power equipment side? So, Mr. Dave, with
regards to exports to domestic, we have worked the past fifteen years in developing
customers in over 100 countries.

We do not want to just give away the customer and the market share that we have
developed just because the Indian market is booming. The margins in India and
globally are similar and not different. There may be a small advantage when you
export because of what we say the reduction in finance cost or some duty drawbacks
and nothing more. With regards to the what we say the supply, what we call from
when we say from an Indian market, in the Indian markets and advantages, you get
paid faster because you are not waiting ninety days end of the month receiving at
the site. So there is not much of a difference in margins.

However, the demand I can just tell you, if you take a simple piece of data, our
normal search data on a Google search takes you about 0.3 watt hour of data. If you
use an AI agent for doing the same search, it takes you 2.7 watt hour data, which
is nine times increase. Now we would say how many people chat GPT use, but I would
say how many people use Samsung phone because every photograph is now digitally
enhanced through AI. As you are doing quant trading, there are driverless cars
which are continuously using AI. So the surge in demand of AI and AI technologies
would also mean nine times to 10 times increase in power consumption.

Even if you look at an EV charger, EV charger which used to be now a good charger
would start at 115 kilowatt whereas the average house in Bombay has about three
kilowatt of power. Now imagine 10% or 20% of the houses going into EV in the next
five years, the entire distribution and transmission system is designed to deliver
at about 5%, 6% growth per year, not five times, six times in two, three years. So
that is a structural mismatch that we have. In the demand side from I would say on
a distribution side, say at sub 33 kV, there is not much of a moat on technology or
branding. So there can be a lot more players.

Even so the market gets bigger, the competition also catches up. However, in the
transmission side, when I say two twenty, 400, seven sixty five kV, the most of
that five or ten years means that nobody wants to enter because the rewards are
after seven or ten years. So that becomes the basic supply demand mismatch. And as
we are going forward, we see that even getting worse. Now you asked about global
demand and Indian demand.

I think in the last call I pointed out, one HVDC order frame contract in England
awarded in March is £59,000,000,000 okay, which is about 625,000 crores, one single
framework contract. If you look at say a power grid contract in India, it's
typically about 10,000 crores. So even if you have five contracts, it's only
100,000 crores compared to six times higher for one single contract in India. So,
the global markets are even larger than the Indian markets. Even though we are gung
ho about India, we also want to ensure that we have 50% of our hands and legs in
the other part of the world that we have created over time.

K. Thank you. Thank you, mister. Thank you. Our next question is from the line of
Aniket Jain from Yes Securities.

Please go ahead. Hi, sir. I wanted to check if any service intensity in the
components of products you're doing and are you doing a plan to do any kind of easy
to do that? Sir. Sorry to interrupt.

Can you get, sir? Your voice is breaking. Just a minute. Hello? Hello?

Is it there? Now it's clear. Please go ahead. Yeah. So I wanted to check if,
there's any surplus intensity in the components or products that you're supplying,
and, are you also doing any EPC business as well along with, supply of those
components?

Hello? Ladies and gentlemen, can I ask the sorry? We lost you. Sorry. I'll repeat
the question.

So I wanted to talk to you about side, no. Both of our equipments don't require
services. Either it operates or it doesn't operate. We sometimes do get pulled into
a service contract where, we are used to commission our own equipments and nothing
more. Okay, sir.

And so what is the typical replacement cycle for these components that you're
supplying? Can those be replaced after ten years, fifteen years, or is it slightly
shorter? Ideally, my customers would not want to replace it for thirty years. Okay.
Got it.

That is the kind of reliability that is put in. That you're put in. Got it. And
second question would be, how is the competition from China and the in,
international markets, for example, in Europe or US? And who are the main
competitors, that you're mainly dealing with?

The Chinese competition has been there for a very long time. We have been fighting
them outside the country also for a very long time. Even today morning, we got a 34
and a half crore order against the Chinese and Abu Dhabi with similar margins. So I
do not think that we fear Chinese, competition from a price standpoint. But, yes,
Chinese have one advantage on scale, which we are building internally with
ourselves also.

So I believe in next year, we should be apples to apples with the Chinese. Got it,
sir. Thank you so much for the answers, and best of luck. Thank you, mister Jain.
Thank you.

Our next question is from the line of Naman Parmar from Niveshay Investments.
Please go ahead. Yeah. Good afternoon, sir. Thank you so much for the opportunity.
So firstly, I wanted to understand on the, bookkeeping, there is a slight error. I
think in financial results, we have shown a $1.77 corona of prevent and control.
And in present, it's showing 194. So what's the correct number? My colleague,
Sharika, will answer the question.

Okay. That, that $1.77 crores is the revenue from operation, and our total revenue
is $1.94. $1.94 crores. Okay. You are including the other income also.

Okay. Other income. Yes, sir. Yeah. Yeah.

So what will be the bifurcation in other income? How much will be interest income
and hyperinflation part? Hyperinflationary part is only 2 to 3 crores, and after is
the interest income. Okay. And currently, how much cash is there in the Turkey
plant?

Last quarter, it was around 75 crores. Just one second. Yes. Now it is, 72 crores,
sir. Okay.

Okay. Understand. And on the business side, so how much percentage of revenue would
be coming from the major three, four products? Like, how much is from the coil
reactors and transformers? Quality power is basically coil products.

Nehru is instrument transform products. Endox is power quality products. If you

look at it, I think the numbers are okay for you. Yeah. Understood.

And what will be the path of the all three, Nehru, Endox, and Sutu? The path is
already guided, sir. We have given for different, companies. We have given, path,
forecasting also, on on the margin side. Even I had just reiterated sometime
before.

No. No. No. On the future, not I am telling you. For the current quarter, what will
be the path of the Meru and Docs?

In the current quarter path of, which or consolidated level? No. No. For for Meru,
for And Docs. Like you mentioned, the revenue of the for equipments path for
electrical equipments is 10.9 crores.

Along with projects, it's about 11.4 crores. Endox is 21.8 crores, and Nehru is 4.2
crores. Okay. And Sukrut has ended the year with how much revenue are at in f five
twenty five? Sukrut, I believe this year, they will be doing about 24 to 26 crores.

That is a, number that we have been projected. At this moment, they are not at cash
loss. Okay. And how much would be Sorry. Yeah.

Last Sorry to interrupt, sir. Please rejoin the queue for more questions. A request
to all participants, please restrict your questions to two question per
participant. Our next question is from the line of Rajvias from TM Investment
Technologies Private Limited. Please go ahead.
And congratulations on a good set of numbers, sir. So as I can see, we have the
order book of order backlog of $7.75, crore. So, if you can, give me the
bifurcation, for the Meru and Quality Power, and what will be the execution
timeline for completing all these, orders? Good afternoon, Vyas. I've already
answered that question earlier.

2 $3.50 crores Meru, $2.50 crores, quality power. Rest is, end ops, and, the
delivery would be between twelve and fifteen months. Okay. And, I might have missed
that. So other than this, we have as you mentioned that we are we are, in
international market, and we cater to more than, one twenty plus countries.

So, what is the, dependency on each and every or what is the highest dependency on,
countries that you can provide? And earlier as well in the last phone call, you
have mentioned that we are in the ongoing project and build with Finland, Brazil,
Canada. So what is the progress with respect to those builds, if you can provide
some details? We are project and country agnostic for us. Everything is one market,
one margin.

In the recent past week, we have had orders from The U. S, Abu Dhabi. We have our
orders from Finland. We have more incoming orders from, say, The Middle East. We
see some good traction in Southeast Asia, Australia.

So we are country agnostic, what we say, company. We'll go as per projects. And as
I said, depending on our relationship with the customer, we are at this moment
having a capacity allocation. We also see a lot of domestic demand, especially on
the platform markets where we cannot ignore the customers. If my memory shows me
right in the earlier con calls that we have had, so you have mentioned that the
dependency is not more than five to 7%.

Is that right? Correct. The the the biggest market would not be more than 5%
compared to Indian market where I would say at this moment, we have set a 40%, kind
of a revenue in India. And, also, you you have mentioned that there is no impact of
tariffs, but we can see that from FY, like, FY '24 to FY '25, the dependents on
America has significantly dropped from 2025% to just one to 2%. So, but you have
said that it all depends upon the execution and after it, like, those fifteen
months No.

No. No. No. No. No.

No. I think I think you misunderstood the dependency. I believe that we have no
problems on that tariff for the next twelve months because the projects which are
supposed to be awarded to us will be awarded because those are paid with our
technical bids cannot be changed. That is point one. Point two, we keep changing
markets every year depending on the size of scale of projects.

So if we have some major HVDC orders in India, my, this year, we may have a India
has a big customer this year. Next year, if you get a huge contract, say, in, say,
South Korea, we may have South Korea as a big market. So the because we are
starting with a smaller base, so you would see the flavor of country changing every
year at this moment. But traditionally at the end of say about two, three years, we
would say India will continue to deliver that 40%, 5050% globally and those markets
would change depending on the size and type of the project. Now if you get a very
large order for a noise cold equipments in America and in Abu Dhabi, we do not have
further capacity to sell in Europe.

So it depends a lot how much capacity you can deliver. I understand. I understand.
But as we speak, we are negotiating larger contracts in The US market. The
customers don't seem to be worried so much on the tariffs.

They are more worried about telemetry. If you see the big beautiful bill that Mr.
Trump had given, the energy subsidies are closing in 'twenty seven, which means
most of the renewable energy projects need to be commissioned by '27 as the
tariffs, the subsidies go off. So in The US, they are ready to give an airlift,
equipment. It is only how many delivery you can move to that.

Thank you, sir. And, last question, sir. And, last question, sir. Sir, please
rejoin the queue as there are many participants in the queue. The next question is
a follow-up question, and it's from the line of Pritish Chera from Lucky.

Please go ahead. Yes, Pritish, sir. Please go ahead. As there is no response from
the current participant, we'll move to the next question. The next question is from
the line of Aditya Garwal from Finn Avenue.

Please go ahead. Sir, am I audible? No, sir. Your voice is sounding very low.
Please come close to the device.

Am I audible now? Yes, sir. Now you're clearly audible. Please go ahead. Thank you
so much for the opportunity.

So I just wanted to ask, like, the kind of work or the kind of product that we are
making, so how difficult will it be for a, you know, established player in the HVAC
market, like, you know, GE, TND, or Hitachi to open up a new vertical because we
are receiving orders from them. So to open up a new business vertical and deliver
the same products to our for, you know, get make getting it in house. So just
wanted to know about this. So nothing is impossible, mister Adarwal. If anybody is,
intending to do it, yes, they can do it.

I believe the timeline for them to do that would be five to seven years, not
because technology is, not available in the world. They can always find technology.
But they should have to wait that five or seven years for them to enter the market
based on market qualifications, point one. Point two, by then, we would have
consolidated the market share with the capacity people and the what we are
envisaging, we will be the lowest one of the lowest cost producers in the world.
So, eventually when the competition kicks in, you still have a lot of margin to
sacrifice for volume.

Okay. And, sir, what will be, like, like, according to us, what is the exact, total
total addressable market for us? And, I mean, on our prospective, it, it has
mentioned something. But, you know, in the Google, the industry growth is, somewhat
different for different HVDC. Yes.
In different sources, it is showing difference. So can you just guide, like, what
is the, you know, absolute TAM that we are projecting and the kind of industry
growth for next three to five years, the overall industry growth? So, Mr. Agarwal,
we are not a one product, one location company. We are a multiproduct, multi
location company, say, in the likes of, say, CG Power or I wouldn't compare myself
with Hitachi, but I would say we are multiproduct, multi technology.

We go from embedded power electronics in Turkey to, say, components in Pune to,
say, instrument transformers in Delhi to coil production transformers in Tangeet.
Having said that, if I talk about the largest growth prospect of HVDC and FAX, when
we had to go to SEBI, the regulation says that we need to use a research agency
from India and most of the research has to be sourced from peer reviewed research
in India because HVDC and FACTs is such a closed market. There's not much of peer
reviewed A class data that was available. But if you look at the Google data of,
say, HVDC order of, say, U. K, or you put HVDC and Tenet, you would see
multibillion dollar orders coming in.

If you look at the volume of data, the HVDC market was about $8,000,000,000 or
$11,000,000,000 last year as per the research report. I just told you in England,
there is an order for $59,000,000,000 in one single year. So the data is at this
moment not technically proper available online, but I would say that you can do an
industry check with the users in the market That would be typically for aggregate
and user and other lines of the world. Okay, sir. Okay.

And the kind of growth in the industry domain, are we still projecting that 60% to
70% growth, which was mentioned earlier? I mean, the HVDC and FACT side for next
three to five years. I believe our order book is already reflecting that kind of
growth because for all renewable energy interconnections in this country and most
parts of the world, SPACs is now compulsory, which means no new renewable plant is
delivered without a fax interconnection. And in the fax interconnection, which can
be SVC or SATCOM or BEST, we have our components in it already. And we are approved
and we are creating capacity to deliver.

Okay. Thank you so much. Thank you, sir. Thank you. Ladies and gentlemen, due to
paucity of time, we will take the last question.

Saurabh Garg from Pranshee Investments. Please go ahead. Yeah. Afternoon. Am I

audible?

Yes, sir. You're audible. Yeah. Congratulations on a good set of numbers. I just
want to inquire on the consolidated sheet.

Employee benefit expenses have risen a lot. So what is the full year projection for
this? And what will be the hand count for, this quarter? And are we going to
increase it as our capacity expands? Hello?

Sir, am I audible? Hello? Let's see the audible, ma'am. Hello? Sir, our current
current employee benefit expenses on crores?
Yeah. Sir, what is your next question, sir? Why did it take They have risen they
have risen and lost a lot as compared to the last quarter ended on March 25. So
what is the full year projection for that? Sir, the employee benefit expenses
increased because also because we had to increase Nehru in it include Nehru in it.

Without Nehru, our employee benefit expense is only about 12 crores. Nehru was 12
crores. Sorry. Nehru was 12 crores that came as an incremental into our employee
benefit. Our employee benefit has has, more or less been stagnant.

Okay. It is just that when we acquire companies, these things come into our, P and
L. Okay. So as our capacity expands, so are we looking to expand or increase our
headcount also? And what would be the full year projection for this employee
benefit expenses that are we looking at?

Very difficult to answer that question at this moment. But, yes, we have started
recruiting people across divisions, across companies. As number of people grow up
in Sangli, because the plant is such a huge plant, we may require another six,
seven hundred people at various levels and capacities coming up in the next year.
And they need to be ideally taken before the plant opens so that we can train them.
So we would see a small spike in employee benefit analysis that is an end ops and
quality path.

Nehru, I believe, it will be stable. Okay. Thank you very much. Much of a
difference. I would say the 25 crores of what was there last year would be, say,
about, say, 30 crores or 32 crores this year.

Okay. Thank you very much. Thank you, mister Garg. Thank you. Ladies and gentlemen,
that was the last question for today.

I now hand the conference over to mister Sidharth Bhamre from Assit C Mehta
Investment Intermediaries. Thank you to all the participants for, participating in
this phone call. And, also, once again, would like to thank, management of, Quality
Power to give us this opportunity to host phone call on their behalf. Thank you.
Thank you.

On behalf of Assit C. Mehta Investment Intermediate, that concludes this

conference. Thank you for joining us, and you may now disconnect your line.