Transformers and Rectifiers (India) Limited (532928) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Transformers and Rectifiers India Limited 4Q FY '25 Conference Call, hosted by Antique Stock Broking Limited. [Operator Instructions] I now hand conference over to Mr. Dhirendra Tiwari. Thank you, and over to you, sir.

Thank you very much. Good day, ladies and gentlemen. On behalf of Antique Stock Broking, I welcome you to 4Q FY '25 post result conference call of Transformer and Rectifiers India Limited. The company today announced a very strong set of numbers, and I congratulate the management to deliver yet another very strong quarter. To discuss results and the outlook, I am glad to welcome the management team represented by Mr. Jitendra Mamtoraji, Chairman; Mr. Satyen Mamtoraji, MD; and Mr. Chanchal Rajoraji, CFO and Adviser to the Board. With these words, I now invite Satyenji to give initial remarks, post which we will open the floor for Q&A. Satyenji, over to you.

Good evening, ladies and gentlemen. Thank you for joining us today on our FY '25 earnings call. We are pleased to connect with you as we close out with a remarkable financial year and share our performance highlights for both Q4 and full year. Earlier today, our Board of Directors approved the audited financial results of FY '25 and the same have been released to the stock exchanges along with investor presentation. The financial year 2024, '25 has been a landmark year full of -- landmark year for our company marked by record-breaking operational performance, technological advancements and strategic growth initiatives that we have significantly enhanced our positioning in the transformer industry. We have achieved the highest ever production in the company's history, manufacturing 29,118 MBA, up from 16,425 MBA in FY '24. This has directly translated into record-high revenue growth, supported by strong execution and healthy and diversified order book. Our total order inflow now for year FY '25 stood at INR 4,504 crores, the higher in our history. This robust inflow has resulted in an unexecuted order book of INR 5,132 comes as of March 31, 2025, ensuring clear revenue visibility for the next 15 to 18 months. One of the most significant milestones was securing a landmark order of INR 740 crores from GETCO in March 2025, the largest single order in our company's history and probably the largest by GETCO as well. This win exemplifies our industry leadership and customer trust. We also successfully raised INR 500 crores via QIP executed in record time. The capital will be instrumental in furthering our backward integration plans and expanding our manufacturing capacities. Q4 '25 highlights. Q4 saw a successful completion of dynamic short-circuit testing of 500 MVA, 400 kV, a key technical achievement that reinforces our engineering progress. We also completed short-circuit testing with an 8.8 MVA inverted duty transformer, meeting the latest CES specifications. Our fully automotive radio facility has progressed well with PGCIL approval process formally initiated during the quarter. Another major highlight was a record number of transformer tested in December 2024, both in terms of MVA and in total units, underscoring our internal capability and streamlined operations. During Q4, we entered into technological tie-up to accelerate our backward integration journey. This collaboration enhance our in-house capabilities, reduce our dependency on external sources and improve our supply chain resilience. We proudly completed acquisition of a controlling stake in the CRGO processing unit by achieving 100% backward integration in one of the most critical raw materials, which is -- which constitutes of 30% to 35% of transformer cost inputs. Looking ahead, as we transition into FY 2026, our focus remains firmly on consolidation, global expansion and sustainable profitability. Our long-term vision to be USD 1 billion revenue company within the next 3 years remains intact, and we are confident of achieving it through consistent execution and customer-centric innovation and robust financial discipline. Our strategies include strengthening backward integration, investing in automation and digital transformation, focusing on clean sustainable energy solutions in line with India's power sector emissions. With strong fundamentals, industry-leading capabilities and high-quality order pipeline, we are well positioned to navigate the opportunities and challenges of the coming year. On behalf of the entire leadership team, I extend my heartfelt gratitude to all our stakeholders, customers, employees, suppliers, board members and investors, your continued trust and support remains the cornerstone of our journey. Together, we are building future-ready organization that not only leads in the transformer industry but also contributes meaningfully to the India's evolving energy landscape. Thank you once again for joining us today. I'll now hand over the mic to our CFO, Mr. Chanchal, to take you through the financial performance in greater detail.

Good evening, all of you, and thank you, Satyen, sir, for your comprehensive overview and strategic insight on what has been a truly transformational year for the company. Your leadership has been instrumental in guiding us through a period of strong execution and the growth. It gives me immense pleasure to share with you the record-breaking financial performance achieved by your company FY '25, a year that marks a new high in terms of the revenue profitability and operational strength. I first want to give small quarterly performance snapshots before I take you through the entire year journey. Let me start with our performance for the final quarter for the financial year. In Q4 FY '25, our stand-alone revenue stood at INR 647 crores with EBITDA margin of the quarter at 17.1% (sic) [ 17.46% ] and the PAT margin for the same quarter was 11.6%. Together, these back-to-back strong quarters reflects the impact of improved execution capabilities and sustained demand from both domestic and the export markets. I'll just give you now the full year financial highlights for the FY '25 vis-a-vis FY '24. At the beginning of the year, the company has guided a revenue target of INR 2,000 crores in the financial year FY '25. And I'm proud to inform you that we achieved a group revenue of INR 2,051 crores with a PAT margin of 10.1% (sic) [ 10.56% ] in the FY '25. That shows the journey part the company is going through. Moving to the full year performance. On a stand-alone basis, we reported revenue of INR 1,950 crores, a significant 53% growth as compared to the FY '24. EBITDA as to set all-time INR 320 crores, up from INR 125 crores is in previous year, making the 149% increase. EBITDA margin improved to 16.12% for the entire year as compared to the 10.03% in FY '24, indicates the better operating leverage and the cost efficiency measures taken by the organization. Profit after tax to come to INR 187 crores, a jump of 325% as compared to the INR 41 crores of the last year. PAT margin improved 9.45%, up from 3.2% of 3.24% in FY '24. On a consolidated basis, the revenue target of INR 2,051 crores versus INR 1,294 crore of FY '25. EBITDA margin on a consolidation basis is INR 359 crores and the PAT of INR 216 crores. Key financial results and operational metrics. We continue to strengthen our balance sheet and improve our capital efficiencies. During the year, the return on the capital employed was improved to 22.76% from the 6.7% as compared to the last year. Return of the investment increased to 23.13% up from 0.95% of the FY '24. Debt-to-equity ratio reduces to 0.2% compared to the 0.84% last year, reflecting our progress towards becoming a net debt-free company. The debtors day reduces significantly to 114 days from 156 days as compared to the last year. FY '25 was also a year of decisive actions and strategic expansion for the company. Company has raised INR 500 crores through the QIP proceeds among the fastest fundraise in Indian capital markets, reflecting the investors' confidence in our long-term vision, acquired a controlling stake in the CRGO processing unit, ensuring 100% backward integration for a critical raw material component, launched 2 major capacity expansion. 15,000 MVA capacity expansion started in April 2024, the Phase 1 operation by May 2025. During the year, company has also started a capacity expansion of 22,000 MVA at the EHV transformers expansion at its Moraiya facilities, which is expected to be completed by February 2026. These projects will take our total manufacturing capacity to 75,000 MVA, enabling us to cater the rising demand from all the corners of the industry. In next 15 months, company will be spending INR 550 crores on CapEx expansions to strengthen its organic as well as the backward integration growth with a target to become 100% backward integrated. Outlook and the closing remarks. Looking ahead of FY '26, we are entering the year with a robust unexecuted order book of INR 5,132 crores and a well-diversified pipeline of the inquiries from the both domestic and the international markets. Our focus area remains continued margin expansion through the operational efficiency, enhanced return ratios, strengthening backward integrations, becoming debt-free company within next 1 to 2 years' time. We are fully committed to our long-term goal of reaching USD 1 billion in revenue within next 3 financial years, and we believe that we are well on track to achieve this vision. In conclusion, I would like to express my deepest gratitude to all the stakeholders, our customers, investors, Board members and especially to our hard-working employees for their continued trust and belief in our journey. With your support drives our passion to deliver the excellence and create a long-term value. We are excited about the opportunities ahead and remain confident in our ability to capitalize on them with discipline, agility and ambitions. Thank you once again for joining us today. And now I request moderator to open the floor for the question and answers.

[Operator Instructions] Our first question comes from Bharat Shah from ASK Investment Managers Limited.

Hearty congratulations, Jitendra, Satyen and Chanchalji. This is a remarkable testimony to something that you charted out some time back and really delightful execution, I must say. Just 2 initial points that I wanted to understand. The margin in the fourth quarter, in particular, is quite healthy and surprisingly robust. Is this operating margin of almost over 19% for the fourth quarter on a consolidated basis? Chanchalji, is this representative of the picture ahead in terms of the margins?

Sir, thank you for joining us. It's really privilege to have you here. Sir, quarter 4, there are a couple of orders what we have executed were at a very, very excellent margins. And that's why this quarter 4 margin is looking a little bit robust. But on a futuristic side, the revenue -- sorry, the margins what we are showing on a yearly basis will be the guided revenues -- guided margin, sir.

I see. And which we should kind of take into account is? What kind of a range?

16% to 17% level, sir.

Okay. For the year ahead?

Yes, sir.

Sure. And as we move to the journey of $1 billion, which means from the a little over INR 2,000 crores in the year gone by. So by '28, we are saying turnover will more than quadruple. And I assume given the operating leverage and the other benefit that will accrue, our profit should grow at a rate faster in that journey?

Yes, sir, I agree with you, sir. As I guided always, sir, my target is to -- our target is to reach to a 10% PAT level. And we are basically targeting that. And as you said correctly, the margins will improve as well as the reserves will improve drastically, sir.

Fantastic. Once again, congratulations, and I think I was also very impressed that on 8th of April, a week after the year has gone by, not only results have been announced, but audited results have been announced. This is remarkable. So once again, congratulations, Jiten, Satyen and Chanchal. This is something to look forward to.

Thank you, Bharat. And one thing which is very close to my heart is the backward integration, which we are doing, which will definitely give us a lead over other players as far as the order booking and the margins are concerned and also improving the quality of the goods, which we are going to make because every thing is going to be in-house. So we will save time as far as the inspections are concerned because today, the inspectors, the utility inspectors, they go to place to place to do the inspection. Here, they have to visit only one place to do all the inspections. So that will also give us a faster lead time. And we are very confident about this. Thank you, Bharat, again for joining us.

Your next question comes from Manish Ostwal from Nirmal Bang Securities Private Limited.

Sir, my question on your improvement in working capital this year compared to last year. So how do you see this is sustainable or what is the sustainable working capital we can think when you talk about $1 billion revenue?

Manish, thank you very much for joining us. And the working capital, what we are showing here, if you've been actually hearing us, we were targeting at the level of around 120 days working capital. And I'm pleased to say that we are quite on that track, and it's a sustainable working capital for throughout the year. But on the other side, our target is to reach 200 days levels. And as the revenue will increase and the margin will build up and reserves will build up, this is going to be a very, very sustainable target.

Okay, sir. And I'm referring the recently recent CNBC interview where the management said INR 8,000 crores of order inflow for next year. Given the performance and given the current pipeline, will you revise that number or the INR 8,000 crores is the number which we are looking to achieve in the next financial year?

So next financial year, our order book input will be around INR 8,000 crores.

Order book will be INR 8,000 crores, not the order inflow, right? Against the INR 4,500 crores, which we have reported this year?

Yes, because we are going to dispatch the INR 3,500 crores worth transformers this year. So our order input will be around INR 8,000 -- UEOB will be around INR 8,000 crores.

Yes. And lastly, sir, on the product innovation side, I mean, the high voltage transformers, any innovation we have done during the year? Can you talk about something on that front, which can high in value and value margin accretive for us?

Manish, we are actually all into all kind of the transformers right now. Yes, for this year, we are targeting that we wanted to get into the HVDC segment. And pretty soon, we'll be into that line. Otherwise, if you see about the HV transformers, we are -- we have the capability to make up to 1,200 kV transformers and no transformer has been built more than that so far now.

And one small data point, can you split the CapEx for '26, '27? And last time you shared the product-wise and the customer-wise order book breakdown. This time, it is not available in the presentation. Can you share the data?

Okay. Manish, '26-'27 CapEx, we have not identified. We are working on those numbers so far. Firstly, our target is to become the 100% backward integrated. And for that, Board has allocated INR 550 crores, which will be used for the backward integration as well as to the organic growth, what we are eyeing for 22,000 MVA in this year. So that will be come up. As far as the customer breakup is concerned, that in our present order book around 45% is the utility business and around 55% is the EPC and other businesses comes. As far as the product is concerned, 70% of our product is on the 220 kVA plus and 30% is on the other transformer side.

And sir, what is the export share of the order book?

We -- not only order book, basically, if I can tell you in revenue around 15% to 17% is the export shares. And order book is around 15%. As you have been hearing us that we have targeted to remain around 15% on the export order book side. We don't want to increase more than that because the opportunities are very, very high in India and margins and payment terms are much, much better now in India.

Your next question comes from Anupam Goswami from SUD Life.

Sir, my first question is on the growth that you are building up in $1 billion revenue. So is it based mostly on the government CapEx? Or do we have -- are we basing on the private CapEx? And also now that we are venturing into EHV and HVDC, how confident are we given that the transformer's capacity in the industry also rising? How competitive are we in that segment? And what sort of margin we'll be able to maintain there?

Anupam, what was your first question?

The growth that you're building, it is based on government utility or mostly...

Basically, if you see in my present order book is 45%, 55%, we have the customer mix. And that shows that we have the diversified customer range. And second point is that, let me tell you that the grid expansion in India is taking up very, very fast pace. If I give you a very small example that as per the CEA only, in next 7 years -- in next 6 years, basically, 381 transformers are required for the grid expansion, which is 220 kVA plus transformers and around 193 reactors are required. And at present, we even don't have the 50% capacity of that in India. And the growth in the grid expansion is taking a very, very fast manner. So by both the levels, the requirements are coming, and we are serving both the clients on that level. And second point is that margins are -- had reached up to the level where we don't want to increase the margins much as our Chairman's philosophy is very, very clear that we should not increase the margins to open the doors for us. Yes, HVDC, we are entering and we are quite compatible to -- in terms of the HVDC as we are -- we have the manufacturing excellence or engineering excellence for the other products also, same we have in this also.

So in HVDC, do we intend to tie up with something because I believe HVDC only a few players are qualified. Have we gotten any order or approval as of now?

Anupam, there are no orders as such, but we have been promised by the central utility. They will give us the work for the repair of the transformers. And once they are comfortable with what we do on the transformers, which we are going to repair because there is a huge failure of the HVDC transformers in the grid. So they are very much keen to have the players who are homegrown or because of the India Make philosophy of our Prime Minister, they are going to give us a trial order for that. And once we get it, we will do it on our own. But as far as the technology is concerned, we are not going to get the technology from anyone. Nobody is going to share that. As now if you see even 400 kVA and 765 kV technology is not available. If somebody has to do it, he has to do it on his own.

Okay, sir. Sir, lastly, if you can give some light on the kind of capacity transformers in India is building up in the next 2, 3 years and the kind of demand -- demand you already mentioned? And will there be any refurbishment of old transformers and those orders along with this?

See, Anupam, the old transformers are going to be replaced. The transformers which are older than 35 years, they are going to be replaced, but they are not plenty because we have started building 400 kV line since last only 2 decades and 765 kV only since last 15 years. So there are not going to be many transformers for repairs of 400 kV or 765 kV. But in the years to come, it is going to be.

The next question comes from Bhalchandra Shinde from Motilal Oswal Asset Management Company.

Sir, on the current order book, what will be our execution cycle?

15 to 18 months.

And since we have started the CRGO steel plant, what kind of inventory will we need to keep and how the cost impact or cost benefit one should see based on the steel [indiscernible]?

We have already tied up with the couple of mines for the long-term -- mills for the long-term supplies. So we'll be not keeping the inventory much into our facilities. They are going to supply us on monthly basis to us. So there is no such inventory buildup is required. And more than the margins and these things, this is -- this will -- this acquisition will improve us the quality as well as the operational efficiency and delivery time, so which will automatically end up increasing our margins.

[indiscernible] Because of the benefit of advances received for the...

Shinde, we had lost your audio in between, and there is a lot of background sound also coming from your line. So if you can repeat the question once again.

Can you hear me now?

Yes.

So in working capital improvement, how much is the benefit because of the advances received from the customer?

Not significant improvement on that basis, Mr. Shinde. It is an overall an holistic approach what organization has taken that is basically yielding the improvement in the working capital.

Got it. Got it. And overall, what will be our targets, as you said, in FY '26 for order inflows?

Just I think a question back, our MD has actually replied that. So our target is to have the INR 8,000 crores order book by end of the next year.

[Operator Instructions] your next question comes from Samarth Khandelwal from ICICI Securities.

Congratulations on a very good quarter. Sir, my question is on the special duty transformer side, which we -- I believe area of market is exports. So how will -- first question is that how will the -- impact this demand for special transformers from us? And yes, with respect to special transformer. That's it.

Samarth, the market for the special transformer is growing very fast, mainly because of the speed which has taken up for production of the green hydrogen and ammonia. There is going to be a huge requirement of transformers for that. We have been getting inquiries from all over the world for the supply of the rectifier transformers. So that business is going to grow in a big way. So -- and that is going to be also with the -- Samarth, there is a lot of background noise. So there's going to be a huge requirement for those transformers as well in the coming years. And as far as India is concerned, we are the major supplier of these rectifier transformers and the furnaces for -- I mean, the transformers for the furnaces, whether it is electrical arc furnace, whether it is submerged arc furnace. So that business is also growing very fast. Have I answered your question, Samarth?

Yes, sir.

The next question comes from Mayank Chaturvedi from HSBC Mutual Funds.

Just a clarification, you said manufactured MVA for the year stands at about 29,000 MVA. But when we had discussed 2Q FY '25 results, it has guided that the will be around 40,000 MVA with a revenue of about INR 2,000 crores. So the realization per MVA was about INR 5 lakh per MVA, but now it seems it has risen to about INR 7 lakh per MVA. So can you just clarify what the difference that has come out in the second half of FY '25 on the realization and the new [indiscernible], please?

Mayank, this is a wrong perception of the people that realization of the -- per MVA realization is just for the name's sake. See, if you make larger transformers, like if you make a 500 MVA, 765 kV transformer, which is single phase, which is around -- today, the 500 MVA transformer costs about INR 20 crores. If you talk about 500 MVA transformer, 3 phase of 400 kV, it is costing you INR 32 crores. So it is just I mean, for the name sake, you can't decide the per MVA realization of the transformer and come to the conclusion about the margins. Like reactors, reactors are, again, it's INR 7 lakhs to INR 8 lakhs per MVA. So -- but they are different. So every transformer has a different per MVA realization. If you go for a smaller transformer, the realization will be something like INR 15 lakhs per MVA. So it does not tell you anything about the realization per MVA. But 29,000 MVA or 30,000 MVA and 20,000 -- INR 2,000 crores of revenue comes to around INR 6 lakhs per MVA. So that's fairly good.

Just a follow-up on this, sir. Safe to say that you're now operating at 70%, 75% utilization and that will get fully utilized in the next year?

Yes. We are currently at about 60%, 65% utilization. Next year, we should reach about 80% utilization.

The next question comes from Pritesh Chheda from Lucky.

Sir, I missed your volume number for FY '25 and I missed the CRGO backward integration. So do we do right now any CRGO or this is all incremental that you're talking about?

See, we are -- this is the process house. It just processes the CRGO.

Yes, I know -- So I'm just saying, were you making your laminations earlier or this is first time you will make it?

No, we have taken over a company which was into this business. So we have taken 51% stake in it. So we don't have to look for the technology partner or anything. The person is already there, is working on that. And we are adding on the 2 more lines for manufacture of CRGO of different configuration and also the CRGO for the reactor coils. Reactor coils, there are only 2 people who are doing it now. So we'll be the third party to be doing it.

So basically, the volume that this company was doing and will do, what is that number?

See, they were not doing much because they had a lot of financial issues and all that, and they had some conflict of interest with Posco who were their partners. So now they are not there, but Posco has assured us a particular supply so that we are not short of material when the time comes.

So when you said 100% backward integration, which means next year, your own volumes will be -- the lamination will be yours? That's how it will be?

No. CRGO will be almost 100% ours, almost, I say because sometimes the larger rating are many and then limited capacity of the larger machine. So we may have to buy from outside or we may get it done on [indiscernible].

Okay. And the volume number?

80% will come from our own company.

So I ask the volume numbers for FY '25. What was your transformer volume number?

Pritesh, if you exactly wanted to understand what -- how many numbers we are producing. We have a lot of...

No, no. I ask the MVA -- Sir, I'm asking the MVA. You gave out the MVA number.

28,828 MVA.

The next question comes from Rucheeta Kadge from I-WEALTH.

Most of my questions are answered. Just one question on the CapEx side. As we're saying that we'll do around in the next 15 months, around INR 550 crores of CapEx. So how much would that be in FY '26?

FY '26 should be close to around INR 400 crores.

INR 400 crores. Okay. And that would mainly be spent on the backward integration part, right?

Backward integration as well as in organic growth.

Okay. So how much for the backward integration and how much for the organic growth?

Rucheeta, as of now, we don't have the perfect numbers, but just say it will be 40% should be on organic growth and 60% should be on the backward integration side.

Okay. And sir, just to confirm, next year...

May we request you to return to the question queue for follow-up questions? Your next question comes from Kaushal Sharma from Equinox Capital Ventures Private Limited.

So my question is on the industry side, I have heard that there is great opportunity in the U.S. side because there was some disruption on their grid side. So -- and we have recently faced some reciprocal tariffs in our industry. So are we expecting a good momentum in the export market as far as the U.S. is concerned? And what kind of tariff impact in our industry would impact our margin in the future?

So we are -- we would be doing around 10% of our total turnover next year in exports.

So do we have any impact of this reciprocal tariff on our margin?

No, there is no reciprocal tariff. Our products are exempt from tariffs.

Your next question comes from Gunjan Kabra from NIVESHAAY.

Congratulations on a very good set of numbers. One question is that orders that got delivered this quarter, you mentioned that high margin. So which segment was that in terms of type of transform?

It's high voltage transformers.

Our order book is also in the high voltage transformer majority of the order book. So why can't the margins sustain in spite we of being the most backward integrated player in the industry then?

Gunjan, look, we have the product mix with us and the customer mix. So it's not there that with every customer, we have that much of the margin, right? So on an average basis, the margins will remain somewhere around 16% to 17% bracket as we told you.

Okay. And sir, in the beginning of the year, we had INR 17,000 crores of order pipeline and now it is around INR 22,000 crores. So how much of the INR 17,000 crores has been converted in terms of orders in the industry itself? And right now, how much would be from the high kV side and how much would be from the IBT side? Any idea on that?

Gunjan, basically, if you see that out of INR 17,000 crores, what the inquiry lines we have, we already got around INR 4,500 crores of the orders. So that is there. And apart from that, we still have 22% -- INR 22 crores. If you see the -- sorry, INR 22,000 crores. If you see the success ratio, you can see we are already reaching to the next year requirement.

So the INR 17,000 crores has already been...

Particularly all these inquiries are basically around 17% -- sorry, 70% is on the EHV transformer side and 30% is from the different product mix side.

The next question comes from Vishal Singh from [ Finvestors ].

Congratulating you for surprising us again. [indiscernible] My questions are mainly answered, but one thing which was left behind was that we are doing a CapEx of INR 550 crores in the next 15 months. So what is the process of fundraise QIP or something?

No, as of now, not.

We already used the opportunity -- Last QIP, so we won't be needing it.

Can you give the breakup of the export in certain countries like [indiscernible]?

We would be exporting to almost all developed countries of the world.

Understood. But you must be knowing that we are talking about what sort of numbers in U.S?

Sorry, I didn't get your question.

What sort of percentage we are expecting to export to U.S.?

We would see as time goes by, we will see how much we are exporting to U.S. and how much we are exporting to other countries of the world. Vishal.

Not as of now, okay.

Vishal, U.S. is not that focus for us. Our focus is that where there is the more revenue is coming up.

Your next question comes from Aaryan Saluja from Derby Asset.

Sir, you have mentioned your philosophy about not focusing on margin to open doors. But on the last con call, we have discussed about the CRGO scarcity and backward integration. Where do you see that playing out in terms of margins in the future as we have already attained 19% without [indiscernible] playing out yet?

Sorry, I didn't understand your question clearly. What is it?

You have told us that your focus is not on margin improvement.

Aaryan, our focus -- our intent is that our focus is not to increase the margins by increasing the prices. Our focus is to increase the margins by increasing the operational efficiencies. Coming back to the question, what you asked is that we have achieved a stand-alone margin of 16% and 17% level, which is the sustainable margin for the industry and for us. So we don't want to increase the pricing to open the door for others. That is what is meaning. Second point is that on the backward integration side, what we are looking up that the margins, what we will be getting from that, that will be the additional margin we'll be adding up in our revenues and margins.

Your next question comes from Siddhant Gupta from RV Investments.

So congratulations on a good set of numbers. So all my questions have been answered. So I'll just ask one question. So can you comment on the bottom line?

My bottom line is 10% [ DF ].

And going forward, will it remain same or like any changes we can expect?

It will remain the same.

Your next question comes from Shivam Dave from Prodigy Investment.

I just wanted some clarity on the balance sheet. There is a sharp increase in your noncurrent trade receivables. What does that account for?

Basically, in our receivables, there are the 2 kind of the receivables. The one is the receivables which are due for the payment. And second is the receivables, which is basically a retention money lies with the utilities, which comes basically after the project is completed. So this noncurrent receivables are the receivables, which are not due for the payments.

So that is INR 336 crores, right?

Yes, sir. That is INR 336 crores, right? So which will be realized in the next 6 to -- 6 months to 12 months' time.

So that is...

As soon as the projects will come. And also, there is a part of that in that, the receivables, which are basically related to the March sales. So those are not due because once the product will reach there, then these will be due for that payment. it is for the better understanding for the investors.

Okay. Okay. And another just a follow-up, if I can ask. The 15,000 MVA CapEx that we have, when would that come online?

The first phase will start from the May 25, [indiscernible] in 2 months' time.

So that should -- first phase should include how much?

The first phase should include about half of the volume. And by -- as progressed by Q2, the entire will be available for the commercial production.

The next follow-up question comes from Samarth Khandelwal from ICICI Securities.

Sir, we did a technical [indiscernible] manufacturing bushing this quarter. Could you elaborate on that? And how much of the raw material cost as a percentage of raw material cost, the bushing cost and how much will be the benefit?

Samarth, these technology tie-ups are related to the backward integration components, mainly for the bushing and the insulation products. And these are basically -- they may not be -- comes under the AB category of the raw materials, but they are very critical components for the transformers. And their lead times are quite high to mitigate that lead time and to mitigate the availability of the product immediately, these backward integrations are being done.

The next question comes from Prerak Gandhi from Neumerc Research Lab.

Congratulations on a stellar set of numbers. So sir, with respect to the 22,000 MVA that CapEx which we intend to plan to incur. So where do we see the finance coming from that? How do we -- how are we going to finance the CapEx?

From the internal accruals and the QIP proceeds what we have with us.

Okay. And sir, with respect to the CRGO or backward integration, how much margin improvement do we see once the CRGO is completely backward integrated?

Sir, it won't increase much of the margins. We may end up having 0.25% on the product basis, but it is going to improve my operational efficiency and quality, which will give me the extra leverage on my production capacity.

Okay. And sir, just one more question, if I may. Sir, are there any bottlenecks with respect to the power and transmission industry because we are seeing a lot of slow government CapEx as well. So the transmission and distribution industry entirely depends on the government CapEx, right? So are we seeing any slowdown? Are there any major bottlenecks which we are facing considering that we also have a major chink of power and distribution transformers?

No, there is no slowdown in terms of government spending in the power sector -- at power and energy sector at all.

Ladies and gentlemen, we will take that as the last question for today. I now hand the conference over to Mr. Dhirendra Tiwari for closing remarks.

Thank you very much, and I would like to thank the management of Transformers and Rectifiers to give us the opportunity to host the call. Before I end, may I invite Satyenji for his closing remarks, please.

I would like to sincerely thank each of you for taking your time and joining us today in our earnings call. We hope that we have addressed all your queries, and we look forward to many more meaningful interactions with you in the future. Thank you.

Thank you very much, and we can close the call now.

Thank you. Thanks, Sagar, and thanks, Tiwariji.

Thank you. Thanks a lot and all the best for the future. And now we can close the call. Have a good evening.

Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.