Thank you. Good day, everyone, and a warm welcome to all of you participating in the Triveni Engineering & Industries Q3 and 9 months FY26 earnings conference call.

We have with us today Mr. Tarun Sawhney, Vice Chairman and Managing Director; Mr.

Suresh Taneja, Group CFO; Mr. Sameer Sinha, CEO, Sugar Business Group; and Mr.

Rajiv Rajpal, CEO of Power Transmission Business; as well as other members of the senior management team. Before we begin, I would like to mention that some statements made in today's discussion may be forward-looking in nature, and a statement to this effect has been included in the invite which was shared with everyone earlier.

I would also like to emphasize that while this call is open to all invitees, it may not be broadcasted or reproduced in any form or manner. We will commence this call with opening remarks from the management, following an interactive question-and-answer session.

May I now hand it over to Mr. Tarun Sawhney?

Over to you, sir.

Thank you, Rishabh. Good afternoon, ladies and gentlemen, and welcome to the Q3, 9 months fiscal '25-'26 earnings conference call for Triveni Engineering & Industries Limited.

The revenues from operations stood at ₹4,782.5 crore, which was an increase of 18.5%. The PBT stood at ₹102.8 crore against ₹57.6 crore in the same period last year.

This is despite an exceptional cost this year, which I will talk about a little bit later. The profit after tax stood at ₹77.8 crore versus ₹42.6 crore in the same period last year.

The key highlights of these results: the net turnover, as I mentioned, increased quite substantially for the 9 months to 17.8% for the 9 months and 16.5% for the quarter under review due to higher sales in sugar and distillery segments and improved sugar realization. The turnover of the engineering business increased by 11% and 15% during the 9 months of '26 and and Q3 of '26, respectively.

There was a strong operating performance in terms of profitability in the 9 months, and it is mainly attributed to a strong performance in the distillery and sugar segments. A major turnaround has happened in the distillery segment due to higher sales volumes, lower procurement costs, especially of maize, and other internal efficiencies, whereas much improved performance in the sugar segment has happened despite the significant increase in sugarcane price, and this has primarily been due to a higher sales volume, better sugar realization, lower, much smaller inventory writedown of sugar inventories in view of the higher recoveries, and of course, there has been cost optimization as well, which has played out in terms of the financial performance, especially for the quarter under review.

There's been a provision of ₹22.4 crore, which has been estimated because of the changes brought about by the new labor codes in respect to the employee benefit expenses as disclosed in our exceptional items. This is for the standalone business.

The debt position stood at ₹783 crore on December 31st, 2025, almost at the same level of ₹775 crore for the period last year, and it comprises of term loans of ₹288 crore, of which ₹136 crore are loans with interest subvention. On a consolidated basis, the gross debt stood at ₹1,073 crore compared to ₹981 crore on 31st December '24, and the overall cost of funds is 6.1% for Q3 fiscal '26.

I want to say it is important for us to note that this the cost of borrowings is trending downwards, in line with the [cough] in line with what is happening across the country. I think we have been very cognizant of the changes that have been happening and have ensured that our cost of borrowings reduces quite dramatically.

To give you an example, our working capital for the quarter under review stood at under 6.5%, which is substantially lower than the 7.7% in the previous quarter. Quite a substantial reduction in in interest costs, and that will, of course, flow through as the as the next quarter and subsequent quarters come about.

Turning towards the business-wise review, I'm going to first start with our sugar business, where revenues for the 9 months increased by 19%, supported by 12% increase in sugar dispatches and 5% in realization. For the quarter, revenues increased by 12%, and this was supported by 8% due to volumes and 6% in price realization.

Again, going back to our conversation about a quarter ago, where I had envisaged stability in terms of sugar pricing, and frankly speaking, they have remained reasonably stable, some amount of variation, but by and large, actually, it has been positive, and this is reflected in the results and in the comparison quarter-on-quarter and 9-month period versus the previous 9-month period. This is all despite a price increase of ₹300 per metric ton by the Uttar Pradesh state government.

That's quite a substantial the largest ever sugarcane increase in the history of the Uttar Pradesh sugar industry, very substantial. Of course, this was because there were higher recoveries that are present as we speak, as I speak right now.

There has been substantial cost optimization, and that is prevalent in terms of the cost of productions at the unit levels, and of course, there's a lower inventory writedown for the units that don't perform as well as the the ones that are right on top of of their of their performance. The sugar inventories on the 31st of December '25 stood at 30.7 lakh quintals valued at just over ₹39 per kilo, whereas in December '24, it was 29.5 lakh quintals closing stock valued at ₹38.8 per kilo.

As we speak today, our refined sugar realization has crossed ₹4,150 per quintal, and sulfitation sugar is about a rupee lower, but it varies quite substantially. It does vary quite substantially.

An important point to note that while the sulfitation prices are that much lower, the bulk of our sulfitation sugar is contracted to institutional buyers that pay premiums above what the average retail sale price is, as what I'm reporting to you are are the retail sale prices. The industry scenario has been very complex for the quarter under review.

There's been a lot that has happened domestically and internationally. The net sugar production was expected to rise about 20% year-on-year, supported by the favorable monsoons that we had had over the last summer, which led to higher cane acreage and improved yields.

The recovery is stronger in the western and southern regions as well as the north. This is despite a delayed start.

In fact, it is because of a delayed start of 1 month in Maharashtra, and that's specifically about Maharashtra. In the investor brief, we have given some details of the crushing updates thus far, but I'd like to point out some important distinctions and important developments that have taken place, including some of our surveys that have come back as of this past weekend, and I'm happy to share some of that information and data with you.

Triveni estimates were far more conservative when compared to the industry estimates previously. We had forecasted, actually, a closing balance somewhere around 8 million tons for September 2026, whereas the industry association had that somewhere around about 1.5 million odd tons lower, around about the 6 million mark.

This was primarily due to a couple of reasons. The first one was we had taken a very conservative approach on consumption, where our target stood at about 27.8 million metric tons.

This was about 700,000 tons lower than what had been estimated by and is still probably estimated by the industry. I would like to actually point out that the releases for this year are actually 400,000 tons lower than the same quantum of releases in the previous year, and therefore, I do believe that while a hot summer is expected, and a hot summer means significant increase in sugar consumption, and that is that has been proven out by the test of time, we do hope to see at least our sugar consumption number coming accurately thereabouts.

I think we're we're very much sticking to our guns on that number. As far as the total country's production is concerned, the averages were were broadly the same.

Triveni had a estimate of about 31.1 million tons when we last spoke, and the industry association's estimate was slightly higher at about 31.5 million tons. There have been many developments, actually, including unseasonal rain that has hit several parts of the country, etc., and also a much more realistic picture with respect to sugarcane recoveries and the migration from ratoon crop into plant crop across the country.

This is not just in in North India, but across the country. As a result, we have some updates for our figures as well.

We are looking at Maharashtra factories starting to close earlier than anticipated towards the end of February, and therefore, what had been earlier forecast as about 11.5 million metric tons of production in Maharashtra could be lower by 1 million metric tons, maybe a little bit more. Similarly, for Karnataka, the 5.6 million metric tons we had assumed could be lower by up to 0.5 million metric tons.

Uttar Pradesh stands exactly as what we had assumed, approximately 9 million metric tons. Now this is very important because it actually changes the stock holding ratio between the south and the north.

It also means that the northern sugar mills will benefit by carrying this stock later into the sugar year, where prices, I anticipate, will be it will inch slightly higher given that we have a lower closing stock. By the way, the closing stock assumes the full export of 1 million metric tons of sugar, and I will just address that point in in a second.

Essentially, I think the demand-supply position has changed in favor of more robust sugar pricing for the next few quarters, certainly, and I think that is a that is a is a a hidden positive and a hidden expectation, a hidden positive expectation that investors should have from the industry. On a global scenario, we've actually seen near-historic lows.

Such a catastrophic fall-off in terms of commodities, commodity pricing has not left sugar as well unscathed, and we've seen as of last close, New York close the March contract closed at 14.7 cents per pound, and London closed at 400 405.1, and and, these are these are very substantially falls in in in international sugar pricing, and as a result, I do have to wonder whether the full 1 million metric tons of exports will take place at these prices. I do believe that commodities are under pressure.

Sugar is in an oversold position in our estimates, and I do believe that some amount of bounce-back will happen. I do think that we should, if not touch the million metric tons, should come reasonably close because, from an entrepreneurial perspective, a large amount of sugar has been contracted, not all of that 1 million, but I do believe that there will be clear opportunities for export, especially as we come closer to the March expiry.

Let's hope India benefits by those sentiment changes both domestically and internationally. Turning to our alcohol business, the sales volume for the quarter was up 27%.

Higher production and sales volume were on account of full operations in the current period, whereas in the previous period, the production was slightly impacted by a stabilization period for the new grain distillery that was commissioned in '24, as well as distilleries not operating for some period due to a non-availability of feedstock in the previous quarter. I think all of those things have been been abated, have been planned for, very much in line with what we had discussed on the last earnings call.

We've registered a significant improvement in the profitability on the back of correction of input prices, particularly maize, and of course, the focus on cost optimization and some amount of steam optimization as well and lowering some lowering of of energy costs. I would like to point out that today, if we had to do an analysis of margins, the the highest margin that you could get as an input would would be maize, followed by C-heavy molasses, followed by B, followed by FCI rice, and then followed by juice.

That is how it stands as of today. The improvement in profitability is due to higher sales volumes and, of course, lower procurement of maize.

The ethanol constitutes 92% of our alcohol sales during Q3 fiscal '26 compared to 89% in Q3 fiscal '25. Our ratio of molasses to grain was 45% to 55%, and our margins have clearly benefited by the lower procurement price of maize, which is exactly what we have used for our grain-based operations for the quarter under review.

The blending percentage achieved in ESY, looking at the overall industry scenario, is 20%. During ESY 2024-2025, it was about 19.24%, and today, it's it's considered at 19.98%, which is pretty much the very maximum.

An inter-ministerial group along with NITI Aayog is working on the roadmap for beyond E20. I think that has gained more traction in the last few weeks.

We believe that there is further impetus, and we can see that in as signs from the budget, the the Union Budget that was announced yesterday. The focus on on energy, etc., and clean energy is something that is definitely being driven home by North Block, and we hope that that will have a positive impact on the ethanol blending program as it as it follows through this year and the next ethanol supply year.

During cycle 1, OMCs have secured just shy of 1,050 crore liters, 1,048 crore liters to be precise, of ethanol. Cycle 2 tender is expected shortly.

I believe that there was a a court case in in Karnataka that that held up the issuance of cycle 2 tender. We anticipate that it may happen this week itself.

I do believe that the tender has been ready for the last fortnight, just waiting for for it to be published. Having said that, unfortunately, we understand that the focus of the cycle 2 tender, which is primarily for Q3 and Q4 supplies, it will be focused primarily on rice-based ethanol, which is FCI rice-based ethanol, followed then by B-heavy and C-molasses.

Not sure how much B-heavy and C-molasses will make its way through to to Q3, Q4. However, there's plenty of of of rice available across the country, etc., albeit at a slightly lower margin.

I'd like to turn towards the engineering businesses now. The power transmission business has seen a a significant uptick in our inquiry levels.

I would say at least 75% as compared to last year, driven by a growth especially in export markets. I think that has been the the primary focus.

Despite a reasonably tough operating environment after absorbing incremental costs related to capacity increase, our our PBT margins improved by 90 basis points year-on-year on the back of better gross margins and favorable product mix and a strong focus on cost optimization. This was also during the period, in fact, in the last quarter, we had a very significant amount of developments that happened in the digital transformation of the of the the business at power transmission, including the initiation of implementation of a CRM solution, a smart factory solution, and of course, the migration of our ERP to a much more cutting-edge SAP S/4HANA platform.

A lot of activities that are happening on that front. The export growth is primarily driven by market share gains in the compressors and pumps segment, and we continue to focus on relationship-building efforts with high-profile customers.

I think that has shown a lot of developments even in the month under review. In this month, we've seen big changes in terms of inquiries and order booking.

Frankly speaking, there's been a massive change. In the last quarter, as you will notice from our results, it was muted.

The hope was that Q3 would result in significant increases in order booking, and that did not transpire. I think a lot of that is not due to the business itself, but due to delayed decision-making, primarily caused by global factors in in my opinion, where our customers in in my personal engagement with customers, I find that it is not their unwillingness to to place orders, but it is just a sense of uncertainty in which they have just kept that decision pending for a short while.

I do believe that this is a time-based decision, and we're seeing that correct. In fact, the month of January itself has been a very positive month for a rebound of order booking to take place.

The inquiry book, as I mentioned, nevertheless, still remains very strong. The Middle East is emerging as a major end-user market for PTB's growth and is expected to be the primary contributor as well to aftermarket export growth.

We participated in in several premier and prestigious exhibitions in the region and will continue to do so to build our brand presence and enhance our global footprint. As the quarter ended, our order booking stood at ₹409 crore, which was an increase of 8% from the ₹377 crore in the previous previous year.

In the month of December itself, we've received orders, as I mentioned, in both the gears as well as defense segments. In the defense segment, I'm happy to report that we've received a very recent order of about ₹45 crore from a prestigious customer.

Of course, the gears order booking is in addition to all of that. Turning quickly to the defense business, the the lathe that we've been waiting for was commissioned last month in the month of December, as planned and as I had discussed, and the factory has commenced manufacturing operations.

The the remainder of the facility development is underway, should be complete certainly in the next few months, 2 to 3 months, again, as per what I have discussed on previous conference calls. However, the manufacturing part of the defense facility is all underway, with the lathe being commissioned and the other balance machinery also under execution and and being commissioned as we speak right now.

There is manufacturing output happening in that facility. Turning quickly to the order bus- to the water business, the water business results include the operations of the wholly owned subsidiaries, which is Mathura both both the both the subsidiaries of Mathura and Pali.

The outstanding order book on the 31st of December stood at ₹1,598 crore, which includes just under ₹1,100 crore of of O&M contracts, which are over a slightly longer period of time. Yes, there was a little bit of variation.

I think the business did not perform as much as well as we would have liked to. There are still the inquiries are still quite substantial, and and are, frankly speaking, I think the the domestic climate across the board, as we've seen and I talked about including in our power transmission business, has been muted.

I think the last quarter was was pretty much across the board as far as Indian corporate was concerned and capacity additions over there. Looking at the outlook of our various businesses, the sugarcane crop looks very healthy in Uttar Pradesh especially, and as far as the rest of the country is concerned, I mentioned the slightly muted outlook for Maharashtra and Karnataka, which means that the total production is going to be a little bit lower, between about approximately about 1.5 million tons lower, and this will reduce the closing stock.

As we had estimated a a reasonably high closing stock, frankly speaking, at around about 8 million metric tons, we will be approaching the 6 million metric ton number, which is very good and bodes extremely well for sugar prices and the stability of sugar prices going forward. I think that is what's very important because we're in an environment where global prices, and and as much as we'd like to think that India has no impact, no correlation between what's happening in New York and London and what's happening in India, there is some sentiment impact, of course, that does creep through.

Despite that, we've been remarkably resilient, and I think a lot of that credit goes through to DFPD in terms of very well thought-out and well-planned quotas. I hope that that does continue, and I hope that that does allow the industry to actually see an increase in sugar prices as we move forward because cost of cane has gone up, not just in Uttar Pradesh, but across the country.

We have heard a lot of conversations about increases in MSP, etc. The reason I have not discussed that during this call thus far is because there's no point talking about it until it actually happens.

My understanding is it's going to be in the high ₹37 or rupee bracket. That is the expectation.

I believe that that is too little, because the prices are already higher, and if we're looking forward up to so many years, we need to look at it from a future perspective and and and and to look at the the impact that it would have on farmers going into the future and on the industry going into the future. That's important.

I still sincerely hope that it is something being considered, and I believe it is, by GOI, and it may happen in in the near future. We are looking at improved sugar recovery trends in Uttar Pradesh as we see the advent of the plant cane, especially in the central part and eastern part of Uttar Pradesh.

We've seen plant coming in Western Uttar Pradesh. The start has been small, but with we're at the [cough] we're on the at the beginning of February, and so plant cane is certainly going to come in full force in the next 10 odd days across Western Uttar Pradesh as well, and that is pointing towards better recoveries.

You can see that from all the various reports that I'm sure you're all privy to. The realizations right now, when compared to last year, are higher than they were.

I think that is a another another positive. We continue and plan on continuing to make some investments, small investments, in sugar to especially improve our cost of production and improve our efficiency.

I think those are things that are that have been highlighted by our operations this year, and you should anticipate that over the coming off-season, we will be looking very closely at our costs of production and finding ways of lowering those costs of production with very short return investment plans, and nothing nothing substantial, all funded by internal accruals. The alcohol business, as I mentioned, we've seen a marked improve- improvement in the operations, primarily led by exceptional procurement of maize.

Now maize, as I had mentioned earlier, is will possibly be curtailed in cycle 2 as for additional deliveries in Q3, Q4. That is a slight negative, very honestly speaking.

It it kind of causes a hiccup, but I can understand that there are huge quantums of rice stocks available in the country, and depending on what type of quality of rice that one can procure from FCI, I think we should be able to make some more improvements in the the margin structure on on rice. Yes, we will be tendering for the small portion of extra capacity that we have for the Q4 tender.

We will be participating in cycle 2 as well, and in cycle 3, which we believe will come in the next couple of months. I think that is also an expectation that has been made fairly clear that there is an expectation that there could be a a cycle 3 as well.

We believe that ethanol prices do need to be revised upwards, and this will certainly help increase the diversion of sugar towards ethanol. However, a lot of this is under consideration, and we don't believe any of this will happen until the next ethanol supply year.

The one thing, an important thing to consider, is the massive overcapacity that exists in the nation, and the planning for that is actually very, very important from the government's perspective. Turning to the engineering businesses, I think that the in this particular quarter, while we continue to focus on really building the brand on a global perspective and and and coordinating, participating, gaining qualifications with customers across the world, we've seen huge successes in the recent past in terms of being onto the AVL.

While I don't disclose the great details, there have been many clients who we are now on the AVL globally, and a lot of that has factored into the increased inquiry book, as I had mentioned. We're seeing orders close out, both in terms of OEM orders as well as in terms of retro in the month of January.

A change in position, really, from the previous quarter, and rather the quarter that's under review. Towards the water business, yes, we are looking at a large number of orders, both domestically and internationally, because of the significant gap that that exists between the demand and current availability of water and wastewater treatment, and there are new opportunities that are emerging in the recycle, reuse, and zero liquid discharge in in the form of EPC and HAM models.

That's quite interesting to see that there are more tenders coming in those two niche areas. We hope to certainly benefit from from those, and we are tendering on on several jobs as far as that is concerned.

On an overall level, we have implemented a series of strategic and well-considered initiatives, a lot of which is playing out, and a lot of which, as I had mentioned the last on the last conference call, will have had a benefit, and you've seen that benefit in this these quarters' results. Lastly, with respect to the proposed scheme of amalgamation of SSCL and the demerger of the power transmission business to unlock value and to drive operational efficiencies, the scheme has been approved by shareholders and creditors.

This was in December of 2025. We have another hearing in front of NCLT in the month of February, and we find that we are very much on track, as I had previously said, for this to happen during this quarter under review.

Oh, sorry, under this this quarter, this calendar quarter. On on that front, nothing really stands unchanged.

We are, of course, as we get closer to this demerger, looking at the power transmission business gaining a lot of skill sets in terms of ability to operate as a separate company. A lot of systems work is being done as we speak to let them hit the ground sprinting, frankly speaking, and have the same kind of efficiencies that we've had at the at the at Triveni Engineering and any of the other businesses that the company has run.

With that, I'd now like to open the call to questions.

Hi. Sir, Tarun, we had signed MOU for 4 MW marine gas turbine generators with Rolls-Royce.

Could you provide an update on our marine GTG partnership?

Certainly. This is for next-generation vessels being considered by the Indian Navy, and this is at the architectural stage right now.

The main decision point for the Indian Navy is whether they would like to go for a gas turbine propulsion engine versus a diesel generator engine. At this particular point, we have made a number of presentations, etc.

We expect that decision to be taken reasonably soon. However, the decision is not in our domain.

It is with the Indian Navy. I believe that if it is a gas turbine option that is considered, and you can only consider one or the other because there's too much work that will go in, the solution then being offered by Triveni and Rolls-Royce becomes a very compelling one, where there is a large amount of indigenization that will occur, and that is the kind of conversation that we've had.

Therefore, creating for the first time in our country's history a gas turbine technical solution being available indigenously and having that technology in India. It would be a big technological tick mark.

However, that decision really isn't ours. It is one which is with the Navy and their designers, and they will be taking that very soon.

Let's assume that let's say they agree to our proposal. Would Triveni move from manufacturing gears into manufacturing turbines as well?

Listen, for any new program, by the time you actually supply the equipment, it's about 5 years out. We're talking about medium to long-term projections right now.

The work-share between Rolls-Royce and Triveni Engineering, I'm afraid I cannot disclose those details right now because it is at an MOU stage. It is not a definitive agreement.

There will be obviously some portions that will be done by Triveni and some portions that will be done by the technology provider, in this case, Rolls-Royce.

Got it. My second question is we have talked about our ability to gain market share in the exports market, and one of the reasons that you have given is that nobody can match our timelines.

If I have to compare Triveni with the EU-based turbogear suppliers, what would be the price differential between us and EU players if we are supplying to the same customers?

You see, it's a very loaded question. Let me tell you why it's a loaded question.

We find that we're substantially lower. What we have done is we've estimated cost of manufacture, because I can't control what a competitor of mine prices their product at, but I can have an estimate in terms of how much it costs them to make.

I'm sure you understand the difference between the two. They can cross-subsidize, perhaps, in an area where I have not received approval or not on an AVL.

They may be able to eke out higher margins. In fact, that is the exact thing that has been happening, and that is why we're trying to get onto all the major AVLs across the world, and I've had very good success thus far.

We believe, the historic numbers that we have, we believe that we are cheaper by at least 25% to 30% in terms of cost to manufacture. I'm generalizing here across turbogearing.

It could vary. It could be higher.

It could potentially be lower as well. However, in the sale price to a customer, it's very difficult because we have certain policies in terms of minimum margin levels, etc., which we do not cross.

I can't talk to the margin profiles for my European competition, it should give you a broad idea. In terms of delivery, because you did speak about that as well, what I am hearing today is that European competition, which is doing reasonably well, they have reasonably full factories, which we hope to benefit in terms of cannibalizing their market share, they are northwards of 12 months in terms of average deliveries for new units.

From Triveni, we can be ex-factory in a period of somewhere between 6 to 8 months, depending on the complexity of the turbogear, and then it takes a short while for shipping. Frankly speaking, in some cases, and we've been having these discussions, we can even airlift certain gearboxes if required and if the customer is giving us the sufficient margin for it.

Right. Could you speak about opportunities that you see in steam and gas turbines?

It seems some of our customers are fully booked till '32, '32, '33, 5 years, 6 years, 7 years down the line, and I believe we have a good play there.

I don't know anybody who's booked 5, 6 years down the line unless it's gas.

Yes, that type, gas turbines. Right.

Yeah. In the gas space, we're seeing a lot of traction.

You have to understand that our journey as a gearbox manufacturer for gas engine applications in the Western Hemisphere is a relatively recent one. Now we've completed and supplied several units, and therefore, when I say that I see great traction coming, we have excellent relationships with the larger gas turbine manufacturers globally, and I'm hoping that a lot of that is already on our inquiry book, and it will translate into regular ordering across sizes, across facilities, across the world.

The growth in the export business will be driven by compressors and gas.

Do we cover everything between 2 MW to 600 MW in terms of gas turbines, or we have a sweet spot in between 2 and 600?

No. Gas turbines larger than 50-60 MW are directly coupled.

They don't need a gearbox. For high-speed gearboxes, the largest application that I've seen is 90 MW.

Okay. Last question, sir, is on LM2500 program.

You had mentioned that packaging will be happening at Triveni. Could you help me understand what all activities are covered under our scope of work?

I think this is still yet to be drawn out in greater detail. As and when it is and as we find out, I'm happy to share it.

It depends because right now, there's been changes. The casing has been changed to composite, which changes the nature of the work flow, etc.

Until all of the i's are dotted and the t's are crossed, I myself wouldn't know what our work-share is, and I don't know that as yet.

Thanks, Tarun. Thanks a lot.

Yeah. Good afternoon, everyone, and thank you for the opportunity.

I have a few questions on my side. First on PTB division.

We have been seeing inquiry levels being very strong over the last couple of quarters, in fact, 9 months, but order flows [unclear] reversal. Also, if you can give some guidance for FY27, that will be [unclear].

I'm so sorry. You were inaudible.

Your last two sentences were inaudible. You'll have to repeat yourself, please.

Sure. I'll repeat my question.

Is this better now?

It is better.

Yeah. My question was with respect to PTB division.

Inquiry

book.

Inquiry book has been strong, but the conversion to orders have been kind of lacking. Just wanted to get some sense in terms of timeline, when we see that to happen, and also if you can just share some guidance for FY27?

Yeah. We don't really share guidance numbers, I can't help you there.

The inquiry book has been strong, and its conversion, you're absolutely right. In Q3, it was weak.

The conversion was weak, and I started off by opening comments by saying that it was weak. However, month of January has picked up quite substantially, and when we look at at least this quarter, and when I say this, I know what I see being concluded over the month of February, over the month of March, it looks very, very positive, much stronger than I had envisaged, and hopefully covering up for the differences in Q3, which was not bad, but it was not nearly as much as what we had thought in terms of conversion of inquiry through order booking.

A lot of that, frankly speaking, and you've not asked, is because of some weakness from our OEM, and it's not because their end-user segments don't require new products or repaired products, but it's because of decision-making ambivalence. I very honestly believe this is due to geopolitical factors and geopolitical uncertainties in terms of their businesses driving this type of uncertainty.

Now when you look at new product and you look at aftermarket, you have to look at both separately because new product usually refers to greenfield, brownfield expansions. A lot of those decisions have to be well thought-out.

A gearbox is only a small portion of the capital decision for any plant, etc. We will be tied into that process probably last of all since it is the product that is made fastest and costs the least.

However, from an aftermarket perspective, that really surprised me in terms of the decision for customers not to repair and to forgo repairs of criticals. A high-speed gearbox is a mission-critical decision.

It's not as if you keep spares of them lying about just because of the nature of the product, and therefore, if there is a breakdown, it has a catastrophic impact on the plant. It leads to a complete shutdown.

I find it a little surprising to see what had happened in Q3, but I'm glad to see in terms of even the bookings that we've had in the month of January for aftermarket, a big bounce-back. It was a momentary lapse, according to me, and I think we're back on track.

Just to extend this point, the reason I was asking is because the last year fourth quarter has been very strong in terms of revenue booking. On the back of 9 months FY25, that is last year, we had a very very robust order booking and order backlog.

This time around, obviously, there has been a dip, as you highlighted. Just wanted to get some sense of the fourth quarter revenue being would be kind of be able to post some growth over the last quarter, fourth quarter last year?

Fourth quarter last year, I don't have an answer to that question in front of me. You can contact us, and I'm not sure what we can share or not, because we don't give forward-looking estimates.

I do think that the Q4 booking is going to be robust. I can see it from January data itself that it's looking very positive and it will certainly cover up for most of the shortfall of Q3.

In addition to what we had planned for Q4.

Fair enough. Thanks.

My second question is with respect to prevailing maize prices, and you alluded to something in your opening remarks that they are the most profitable right now. Can you outline the unit economics across different production routes, that would be helpful?

Yet again, we don't really give you your contribution per liter, but the maize contribution is definitely a very robust double-digit contribution, higher than C-heavy. However, I don't see next few cycles coming to support maize.

In fact, if anything, you've got problems with maize coming from different parts of the country starting off with Karnataka and then a large number of other maize-growing states. Maize prices have continued to fall, and they continue to be softened.

They've been stable, but they've been very soft right now, and as the next maize crop from Bihar comes about in the next 2 months, I think that Bihar prices are going to be massively different from where they left off last year, massive difference. Unfortunately, I wish I could say that we would take great advantage with our spare capacities, small spare capacities, but I don't see that happening.

I don't see maize being treated favorably, but we will fill those capacities with rice, of course.

Just to again extend this one, last time you had shared that maize prices were something in the range of ₹22, ₹22.30 per kg to ₹22.50 depending whether they are coming from Bihar or UP. Even

delivered

prices for Yeah.

The delivered prices were ₹20.

Yeah.

The current prices are also about ₹20, ₹20.5.

Okay. They are quarter-on-quarter, they are flatish that way?

Yes. They've certainly gone down since October.

The numbers that you have, which were ₹22, they've come down to ₹20, so that is lower. By the time we spoke, which was in November, from November to today, they're flat.

Yes.

Fair enough.

No, I want to finish that point. I still believe is there is a softness.

The difference between November is it was the fag end of the supply coming from the southern states, from Rajasthan, from Madhya Pradesh, etc. Look, of course, UP finished earlier on in September, but the MP crop that came in, that finished, that is pretty much finished.

Now the next crop that's going to come is Bihar. The prices today are really of saved and stored maize versus fresh crop.

You understand what I mean? When you see typically when the harvesting season is over, you see some increases because there's no pressure of harvesting.

There's no pressure of fresh arrivals at the mandis. Today, you don't have that scenario, yet you have soft pricing.

The moment the Bihar crop hits the market, I believe it'll be at lower price points.

What would be that timeline when Bihar hits market?

April.

April. Okay.

Can I squeeze in one more question if it's fine?

Sure.

Yeah. I was reading somewhere one of the articles in UP, it seems that there has been some increase in farmer dues.

Obviously, for the larger and listed players, I think the payments would have been in time. Would you like to update anything on that front, highlight any current position in terms of farmer dues for UP?

Absolutely. In the last list, we were right on top in terms of best performers as Triveni, and we were always well ahead in terms of our cane price payment.

Having said that, I think there are certain groups, and I don't talk about my peers in the industry, that there have been delaying payments, etc., as their crop dwindles. You see, I think there is going to be again a demarcation between those who crush well this year and those who don't crush well this year in the state of Uttar Pradesh.

When the results are known, you'll be able to discover those results themselves. I think that those millers that are seeing an early arrival of the plant crop, an early arrival, which means an immature arrival of plant sugarcane, it's all based on their cane price payment to farmers and relationship management with farmers.

You're seeing that happen. I don't have the exact numbers with me in terms of week-on-week change, but if you like, you can contact us offline.

We'll share weekly data for you in terms of changes in cane price arrears and excess cane price payments if that's of interest.

Yeah. Hi, sir.

Sir, my question is on the new multimodal defense facility. You have indicated that we have started commissioning this facility.

Sir, can you just tell us how much is the capex that has been spent till now for this facility?

I don't have the number. Do you have the number for what's been capitalized?

Defense? We don't have that right now.

You can contact us offline, and we will give you that number. Ballpark, what was approved by the board, and I don't think we've spent all of it, but what was approved by the board for the defense facility was just north of ₹100 crore.

Okay. Sir, in terms of now after the initial trial runs on some of the products that are to be made in that facility go through, how do we see the revenue trajectory and what would be those products that we would be supplying first in say sometime in FY27?

No. I don't give forward-looking estimates, I'm not going to do that, you'll excuse me.

What I will tell you is what we're already qualified for, and the list is, of course, detailed, and it's on our website. I would encourage you to go through our PTB and defense presentations on our website, which gives you huge detail on the various partnerships that we have and various products that we are tendering for and have orders for.

They include, but are not limited to, and I'm talking about the breath of relationships thus far, fin stabilizers, gearboxes, propulsion equipment, PSI, gas turbines, smaller gas turbines, deck machinery. We've recently signed an MOU for at-sea transfer from ship-to-ship systems, cargo bay handling systems, etc.

There's a lot of work that is, and the list goes on. There's repair work that happens on compressors, on pumps, etc., different metallurgy, different materials.

It's a very extensive list. You're welcome to come and visit the facility and see things in greater detail.

For now, I would encourage you just to have a look at our website.

Yeah. No, right, Tarun ji.

I've seen the list of the products. I was just wondering that do we kind of start making most of these products in the first year or how does the kind of ramp up of supply of these products go through because obviously this would require how

That's a good question. Yes, I would say quite a lot of the products will be made in the first year.

Then there are different sizes and scales. For example, in shafting, we have won several orders.

We will do one set of shafting, but the others will happen subsequently in other years. As far as gearboxes are concerned, some will happen next year, some will happen the year after, most of them will happen the year after, etc.

There's a cascading effect, but we're not limiting ourselves to one particular year. We're doing as per contracted supplies.

Understood. Sir, just last one on this same thing.

This defense facility, in how much time do we see we can ramp it up to its full potential? Is it like 3 years?

Is it like 5 years? Or what indication you can give at this point of time?

I think it depends on what orders we win from the Indian Navy or from other branches of Indian defense where we are now going to be tendering and form a part of our inquiry base. Frankly speaking, the defense facility is a very large facility.

It's not fully built, we've only built Bay 1. This is Bay 1 of four large facilities that can be erected on the same premises as per the master plan.

We're at the very start and inception. We're not limiting ourselves.

We're going after everything that rotates, frankly speaking, as far as the Navy is concerned, and our immediate focus is on how do we branch out and address the requirements of the other branches of the armed services.

Sure, sir. I look forward to coming to this plant and look at it.

Looks very interesting and a very long-term good thing for us. Thank you so much, sir, for answering the questions.

Good evening, sir. Sir, my first question is there is a significant improvement in your sugar recovery to 10.5% till December '25 as compared to last year, 9.1%.

Could you please advise us the key factors contributing to this?

Absolutely. I think we had in the two sugar years, and I think the trend is even better, frankly speaking, but in the two sugar years, we had very high quantums of unseasonal rainfall in the previous year, which impacted the recoveries.

We also had disease and pests, a much, much higher portion of disease and pests, especially the red rot that impacted 238 variety for Triveni in the sugar year 2024-2025. In the sugar year 2025-2026, which is the year under review, the one that you're talking about right now, actually, the disease has been under all limits, and our limits are fairly stringent.

Therefore, that has meant that healthier cane, non-diseased cane comes to the sugar factories. I think the quantum of rainfall that has fallen this year has also been pretty good, with the exception of our factory at Deoband, which had excessive rainfall.

However, the only negative factor this year is there's been some incidence of some new pests, whiteflies, etc. Our performance could have been even better, frankly speaking, and the hope is that for the plant cane crop, a lot of this gets abated.

Also, the recoveries are not a apples-to-apples comparison because we had a couple of our sugar factories in the previous year that were operating with B-heavy molasses, which obviously takes out a little bit. I'm not sure if you were looking at the gross figure or at the net figure of recoveries, but this year, all the sugar factories are operating on C-heavy molasses.

You will have to normalize the two.

Okay. Got it, sir.

Sir, my second point is especially for UP, what is your current outlook on cane areas recovery and cane crush overall this season versus last year?

As I mentioned in my opening remarks, we're looking at the production of Uttar Pradesh being broadly the same this year versus last year. Approximately 9 million tons of sugar being produced last year, and about the same amount

10.3

broadly speaking. A few percentage points here or there, up and down, but broadly the same.

Cane area would also be approximately?

Cane area was a little bit higher this year than last year, but yields in certain parts of the state have been lower, and we're seeing that especially in central and the eastern parts of Uttar Pradesh and some parts of Western Uttar Pradesh as well. You're seeing that for a variety of agro-climatic reasons, the yields have not kept up, whereas the cane is very healthy.

You can see that in terms of the recovery. Disease is by and large disease-free.

That is a result of not having excess rainfall, etc., and also a lot to do with the management and cane development that happens across the factories. However, due to some climatic reasons, we've not seen the yields keep on par.

I think that is a major focus area. As we move past the eradication of 238 variety for next year, the great plan has to be how we better manage the yields and agronomic activity at the farm level, including at Triveni to ensure that we actually get the most amount of cane.

We have been fortuitous in terms of getting excellent allocations of cane area from the government of Uttar Pradesh in terms of the reservation policies, and I think that should have a positive result in terms of our overall performance this year versus last year. However, at this particular point in time, we're halfway through the season, and there is half of the season that still remains.

Okay. Thanks, sir.

Thank you, sir.

Good evening and thanks for the opportunity. Sir, my first question was that on the sugar prices outlook, of course, you mentioned the fact that MSP can still come, which I'm not doubting.

Suppose this year we end up with 6 million ton inventory and in all likelihood, next year there is a 60% possibility of El Niño, which means the next year crop will also be lower. In which case, will the inventory position come to such a point that the prices can go up even much stronger from the current levels?

A related question is that like we've seen many years ago, government step in to put a cap on the sugar price. Your thoughts on that?

The government hasn't placed a cap on sugar price per se.

Not yet. If it goes to say ₹45, ₹46.

I'll answer your complete question. I think we're dealing in the realm of possibilities and percentages.

To extend the same example, let me also tell you about the history. In the last 15 years, to the best of my knowledge, there have been 4 years that have been considered El Niño years.

Not one has happened. Not one.

In the last 15 years, only 1 year has been below the long-term average of rainfall across the country, only one. Now statistically speaking, for as long as monsoon or rainfall data exists in India, that has never happened.

That has never ever happened, you could extend that example as well. Every year you extend it, we have a great monsoon.

I won't go into the hypothetical. The fact of the matter is that you do have some amount of buffer in terms of the sugar that is diverted towards the ethanol blending program, and you have huge quantums of grain that is available at reasonable prices across the country, it's not as if the ethanol blending program is going to suffer.

We at Triveni, that is why we have got a large portion, the majority of our distilleries, etc., are multi-feed distilleries only for that eventuality that if you have lower cane availability in the country for any reason and there is a push towards making the sugar for domestic consumption, then you have to keep your distilleries gainfully occupied, and you do that because you've got dual feed capabilities. Now to your question about sugar prices.

Sugar prices will obviously go up. We are not immune to the forces of demand and supply, and if you see a substantial difference in terms of projected closing stock, and now I'm talking about September 2027, which is the year that you're talking about, you can see prices go up quite substantially.

If you look at sugar inflation and track it for 10 years, we are well below food inflation, well below. We are tracking at 50%-60% below food inflation for the same period of time.

I would say it is about time that our prices go up. Is ₹45 significant?

No, of course not. It's nothing.

I think ₹45 even today the government would be happy with. It's if the price goes to ₹60 that you have something to worry about, not at ₹45.

In the last 15 years, I think there's one instance where the government has imposed a cap, if I'm not mistaken. Is one instance where the government

Yes, there is. There is one instance.

There is one instance, yes.

Okay.

Even that was highly restrictive. It was for certain quantities, not for other quantities, etc.

If I remember correctly, it was at the very end of the levy sugar era.

Right. That's helpful.

Sir, secondly, I had a question on Sir Shadi Lal. Despite of a large increase in the crush and prices going up, we are still seeing the gross recoveries lower in SSCL.

Why is this, and when can we expect this company to turn around realistically?

It's an excellent question. As I mentioned, we've had very good yields, we've got good area.

However, we've had a breakout of something called whitefly in very specifically only in that part of the state, and we have factories close by where we don't see the incidence of this pest. This has created some amount of nuisance factor in the ratoon supply.

The hope is that when plant cane starts coming in full in Shamli, we will be back. It affected the ratoon, that does not mean that it's going to affect the plant, and we will see the plant cane supplies coming 100% in Shamli in the next 10 days or so, and that is when you should see the expectations for the remainder of this year.

That's one. The second thing is that in the month of November, for some strange reason, there was a little bit of urea dosing that farmers in Western Uttar Pradesh did because of their perception of climatic factors.

This turned out to be a little bit of a negative, and this is something that we very strongly discourage. It does not happen at any of our other sugar factories.

Where we've had relationships for 50, 60, 70, 100 years, Shamli being a new unit and the relationships being new, our sway over the farming population needs to improve and increase so that they don't engage in practices where the 350,000 farmers that deal with us in other seven factories don't engage in across the state. We have to do that, and we've noticed that these are two possible and probable issues for the underperformance of Shamli.

I do think that there is positive news ahead in terms of the remainder of the sugar season as far as Shamli recovery is concerned. We've also had a couple of breakdowns, which led to intermittent factory operations at Shamli.

It is an old factory, and while despite doing a lot of repair and maintenance, there were two significant breakdowns that had an operational impact on the plant. Again, things that we have resolved and we will completely resolve during this off-season.

Just one added question here, sir. Can we expect the sugar year '25-'26 to be still loss-making for Sir Shadi Lal, and should we take next year as a turnaround?

What would be your thought on that? That's all.

I think that is a very fair assumption.

Okay. Thank you so much.

Ladies and gentlemen, thank you very much for joining us today for the Q3, 9 months fiscal '26 results earnings conference call for Triveni Engineering. I think the next time we speak, in all probability, this will be two separate companies.

With that, I would like to thank everybody that has participated over the years on this call for your valuable feedback and constructive feedback and guidance to the management team of Triveni Engineering. Thank you very much, ladies and gentlemen.

We are deeply appreciative of your constructive commentary. Over the next few months, we anticipate very good news as far as the power transmission business is concerned in terms of order booking, in terms of new wins in export markets, etc.

We also hope for a big rebound that we're seeing domestically. As far as sugar is concerned, I think all the bad news is pretty much out of the picture across the distillery and sugar segments, and anything that happens from here will have a direct positive impact on pricing and therefore improve margins further.

That is my hope for the next few months. How much of that converts into reality, we will see.

It is very much in line even with the last question asked by the last speaker about Sir Shadi Lal. Frankly speaking, if sugar prices rise by 5%, then yes, it'll be a profitable year for every single factory within a very big difference and a big bounce-back even for our subsidiary today.

All of those things are possibilities, and we hope that they all fructify. Thank you again for your time.

Look forward to speaking to you in about 3 and a half months.