TD Power Systems Ltd (TDPOWERSYS) Q2 FY27 Earnings Call: Raises FY27 Guidance To Rs. 2,900-3,000 Cr, Siemens Energy Orders Begin

H1 FY27: Near-Doubling of Income and Record Margins

• H1 FY 2026-2027 standalone total income of Rs.14.55 billion — up 91% from Rs.7.64 billion in H1 FY 2025-2026; consolidated total income was Rs.14.86 billion, up 78% YoY.
• H1 FY 2026-2027 standalone EBITDA margin of 20.02% (including other income, excluding exceptional and treasury income) — versus 18.42% in H1 FY 2025-2026.
• H1 FY 2026-2027 standalone PAT of Rs.2.074 billion — up 110% from Rs.989 million; consolidated PAT was Rs.2.096 billion, up 89% YoY.
• Cash position of Rs.4.19 billion as of the call, including customer advances and preferential share issue money.
• Q2 FY 2026-2027 quarterly run-rate of around Rs.820 crore — noted by analyst Mohit Surana (Monarch Networth Capital); management said more customer deliveries were scheduled in Q2 FY 2026-2027 and investors should not read too much into monthly or quarterly performance.

Export-Led Inflows, Siemens Energy Bookings, Hydro Milestones

• Q2 FY 2026-2027 order inflow of Rs.8.24 billion — up 57% QoQ and about 70% YoY; H1 FY 2026-2027 manufacturing order booking was Rs.23.19 billion (generators Rs.20.88 billion, railway Rs.1.7 billion, spares and aftermarket Rs.0.16 billion, Turkey Rs.0.45 billion).
• Direct and deemed export order inflow of Rs.14.06 billion in H1 FY 2026-2027 — versus Rs.6.95 billion in the prior-year period, making up 92% of H1 order inflows, with domestic at 8%.
• Pending order book of about 2,300 (Rs. crore) as of Q2 FY 2026-2027 — MD Nikhil Kumar said most is executable over the next 12 months, with more than Rs.1,200 crore of book-and-bill expected within FY 2027-2028.
• Siemens Energy orders have started being booked — for two-pole generators on a bill-to-print basis, from Siemens' gas turbine group (not its TI group); management declined to quantify the scale, and said the Siemens-linked project's bhumi puja is scheduled for 19 November 2026 with most major equipment ordered.
• Largest-ever vertical hydro order plus a horizontal run-of-river order — both for projects in Nepal, highlighted in the Q2 FY 2026-2027 presentation; Head of Sales and Marketing Vinay Hegde cited Nepal and Vietnam as the two major hydro markets and said big hydro orders have already come in Q3 FY 2026-2027.
• Orders being booked for FY 28, FY 29 and even FY 30 — with price variation clauses with some customers that pass through raw material cost changes; the current order book does not include the large Siemens-linked project, with FY29 and FY30 orders still under discussion.

Data Centers, Grid Stabilization and a Broadening OEM Cycle

• Four demand drivers cited by MD Nikhil Kumar — data centers, grid stabilization, basic power generation, and the renewables push (geothermal, hydro, waste to energy); OEM customers are selling turbines and engines across all market segments, not only to data centers.
• OEM customers see real projects and demand up to around 2030 — per management citing customers; production slots and bookings beyond 2030 are not slowing, and generator numbers are expected to keep rising as more engine and turbine capacity comes into the market from 2028 onwards.
• Strong Indian demand from steel industries in the 40 MW to 100 MW segment — Vinay Hegde said orders are coming from across the globe, with Europe placing orders for grid stabilization and waste-to-energy, and all segments growing.
• US data center boom "is going to continue" — Nikhil Kumar, based on discussions with OEM customers and end users, reported a "unanimous verdict" that a state or county refusing a data center would see the investment go elsewhere; he called the US "the only game in town" for US market growth and expects Democratic governors to change their tone as they face the realities of governing.
• Possible regulation requiring captive power as primary source for data centers — Nikhil Kumar said regulation may require this with grid power as backup, which he described as beneficial for TD Power Systems; combined cycle could become a larger part of the business through efficiency regulation, but "not going to happen immediately."
• OEM waiting periods have not come down over the last few months — and no customer has increased capacity drastically yet, with "everything is in the pipeline" and "still very early days."

Fourth Plant Targeted for Calendar Q1 2028; Two-Pole Focus

• Fourth plant readiness targeted for calendar Q1 2028 — with June 2028 as the absolute outer limit; Bhumi Pujan scheduled the following week; production ramp-up planned from calendar 2028, with FY28 and FY29 as ramp years and roughly 70-80% utilization targeted by FY30.
• Current investment focus is the Siemens Energy project — and manufacturing capacity for two-pole generators up to 100 MW, which Nikhil Kumar described as where big growth is expected.
• Incremental capacity for machines below 50 MW or 60 MW still under internal debate — customer forecasts for 2028 (partly incremental) and 2029 would drive decisions, with something to be done in 2029 if those forecasts hold.
• No clear figure yet on how much existing capacity can be pushed further — management believes there is more to gain from efficiency and asset utilization.
• Siemens plant expected to start in about a year from the call (around Q3 FY 2027-2028) — it will carry costs before generating revenue, a near-term margin headwind.
• Third plant's stated capacity of Rs.2800 crore by FY 2027-28 already reached much faster than expected — noted by analyst Pramod Kanki (Ratna Try Investments) and confirmed by management context on the call.

~19% Sustainable Margin Band; Price Variation Clauses Protect

• Around 19% is the sustainable EBITDA margin range for the next few quarters after Q2 FY 2026-2027 — per Nikhil Kumar, with a possible small drop before recovering; Q2 margins were at an all-time high, per analyst Karvit Goyal (Saran Alpha).
• Margins could move past 20% once the new plant reaches 50-60% utilization — the timing of that utilization was not specified.
• Pricing described as stable — prices will not rise drastically and will move only in line with raw material price variation formulas, which management said will protect margins.
• Price variation clause agreed with almost all OEM customers — if raw material prices rise beyond a certain threshold, a formula revises prices.
• In-house model providing operating leverage — Nikhil Kumar confirmed the company is not shifting traditionally in-house activities to third-party vendors, continuing them in-house "at a much larger scale, and with more automation, and with better technology."
• Hydro margins "plus minus everything approximately the same" as the gas business — per Nikhil Kumar, in response to an analyst reference.

FY27 Guidance Raised; FY28 Initial Guidance "Conservative"

• Revised FY 2026-2027 guidance of Rs.2,900–3,000 crores in total sales — with H2 FY 2026-2027 sales expected to be split roughly equally at Rs.725–750 crores per quarter for Q3 and Q4 FY 2026-2027; approximately 50% of the business, around Rs.1,500 crore plus or minus, is to come in H2 FY 2026-2027, and H1 and H2 are expected to be approximately equal.
• Initial FY 2027-2028 guidance of Rs.3,400–3,500 crores — described by Nikhil Kumar as conservative, with a "very high likelihood of an upward revision."
• 20-25% per year growth is the conservative baseline — per Nikhil Kumar (period unspecified), when asked whether 25-30% was the minimum achievable.
• US$1 billion top line is possible — Nikhil Kumar said he could not give an exact timeline but believes this is the potential the company sees to grow into in the medium to long term, not a timeline (period unspecified).
• Order book for FY 2027-2028 should rise further — as orders are secured from November to March FY 2026-2027 before the current year's order book closes; the company is in roughly monthly discussions with customers on capacity, planning and execution for FY 2028-2029 and FY 2029-2030.
• Management declined to give yearly or medium-term guidance beyond its current approach — Nikhil Kumar answered "No" to providing yearly or medium-term guidance and said the company will continue its current approach of publishing only achievable numbers.
• SoftBank Group's cancellation of excess gas turbine reservations (primarily with GE Vernova) does not change underlying market dynamics — per Nikhil Kumar, who said SoftBank is known for dramatic bets and pointed to GE Vernova's own comments; he noted only three companies globally make large gas turbines (GE, Siemens and Mitsubishi), so the company, tied up with one of them, is unlikely to win business from the others and is happy with its current partner.