TD Power Systems Ltd. is a holding company, which engages in the design and manufacture of alternating current generators. The company is headquartered in Bangalore, Karnataka and currently employs 681 full-time employees. The company went IPO on 2011-09-08. The firm also manufactures special application generators for geothermal and solar thermal applications. The company is focused on manufacturing custom-designed generators for its customers who are based all over the world. The firm offers steam turbine generator, horizontal hydro generator, vertical hydro generator, diesel engine generator, wind turbine generator, gas engine generator, gas turbine generator, special application and other generators for geothermal/solar application. The company manufactures steam turbine generator for Thermal Application, Geo Thermal Application and Solar Energy Application. The company manufactures horizontal hydro generator for Francis Turbine, Kaplan Turbine and Pelton Turbine.
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Strong execution and sector tailwinds fully priced; working capital conversion the soft spot
Model confidence: 72%
TD Power Systems manufactures generators, motors, and related rotating equipment primarily for gas turbine, steam turbine, and hydro applications, with 79% of FY26 order inflows from export markets. The operating picture is unambiguously strong: FY26 revenue grew 35% standalone and 44% consolidated, order inflows surged 51% to ₹2,238 cr, pending orders rose 66% YoY, and ROCE at 30% sits comfortably in the top quartile of a 128-company Electrical Equipment sector whose median is 17%. The balance sheet is effectively debt-free (D/E 0.02, interest coverage 174×), and management has a credible — if imperfect — track record of under-promising on headline revenue while slipping on product-launch timelines. However, the market is pricing well beyond the FY28 earnings anchor: at ₹20,291 cr market cap versus a bridge-derived FY28 PAT of ~₹432 cr, even the average-case 35× PE implies negative CAGR over two years, and the best case barely breaks even. The binding concern is not the growth trajectory but whether the current multiple can be sustained — compounded by weak cash conversion (CFO/PAT averaging ~0.50, receivables outpacing revenue) that means retained earnings are being consumed by working capital rather than generating free cash. A definitive shift would come from the large-generator capex announcement (due within 2-3 months) and whether Q1-Q2 FY27 demonstrates improved cash conversion alongside the guided ₹2,400+ cr revenue run-rate.
Order book provides multi-year revenue visibility
FY26 order inflows ₹2,238 cr (+51% YoY), pending orders up 66%, run-rate approaching ₹650 cr/quarter. Export mix at 79% with OEM customers planning to double capacity by 2030.
Top-quartile profitability on a near-zero debt base
ROCE 30.3% vs sector median 17.3%; D/E 0.02 vs sector median 0.32; interest coverage 174×. Revenue CAGR 5y at 25.6% also sits near p75 (29.9%) of the 128-company bucket.
Consistent guidance delivery on headline revenue
FY26 ₹1,800 cr guidance met (₹1,737 cr standalone / ₹1,869 cr consol). FY27 guidance raised twice — from ₹1,800 to ₹2,200 to ₹2,400+ cr. Third plant commissioned a month early.
Sector-wide order backlog tailwind corroborates company-specific momentum
Seven companies in the Electrical Equipment bucket report record backlogs with 22-91% YoY growth. TDPS's 66% pending order growth is consistent with sector tide, not an outlier claim.
Management professionalisation underway
CEO hire (Deepak Sinha, ex-L&T-MHI/GE Power) for full operational charge. Candid disclosure of Turkey LD penalty and DFPS subsidiary write-off. Management score 82/100.
Current market cap prices in flawless execution well beyond FY28 earnings
high₹20,291 cr mcap vs ₹432 cr FY28E PAT implies ~47× forward PE. Even at best-case 50× PE, two-year CAGR is only +3.2%. Average-case 35× implies −13.7% CAGR.
Weak cash conversion — receivables outpacing revenue, retained earnings absorbed by working capital
highCFO/PAT 5y average 0.50; FY26 EBITDA-to-CFO conversion ~21%. Trade receivables grew to ₹742 cr from ₹438 cr, faster than topline. FCF/revenue just 0.99%.
Commodity cost exposure with hedges expiring
mediumCopper at $14,000; double-digit price increases being passed through selectively. Sector-wide headwind confirmed across 7 companies. Q4 gross margin compressed ~3pp from Turkey LD penalty plus commodity pressure.
Large-generator entry faces entrenched global competitors and extended ramp timeline
mediumSiemens, Baker Hughes (Brush), Mitsubishi, Fuji, Toshiba dominate. Machine-tool lead times of 15-16 months push full capacity to CY27 and meaningful ramp to CY28/FY29. Capex size still undisclosed.
Walk-the-talk aggregate score at 0.47 — below 0.5 threshold
mediumMotor business deprioritised (missed ₹150 cr target), large-gen ramp slipped from CY27 to CY28, Q4 gross margin missed 35% guide at 31.4%. Pattern: revenue guidance met, product timelines slip.
High factory utilisation leaves no buffer for operational disruptions
mediumManagement flagged that any production equipment breakdown causes delivery delays. Customers monitoring delivery biweekly. Supply chain bottlenecks (OIP bushings, mineral oil) are a sector-wide issue.
Next review: Large-generator capex announcement (expected by August-September 2026) and Q1 FY27 results — specifically whether cash conversion improves alongside ₹600+ cr quarterly revenue and whether FY27 guidance is revised upward again.
| Case | Target mcap | CAGR |
|---|---|---|
| worst | ₹ 9,504 cr | -31.5% (negative) |
| avg | ₹ 15,120 cr | -13.7% (negative) |
| best | ₹ 21,600 cr | 3.2% (weak) |
“We've revised our guidance for FY '27 at INR2,400-plus crores with an extremely high probability to increase our guidance further”p.4
“we have a capacity to address INR32 billion for FY '28, yes, but that is where management is also expecting numbers to be on a conservative basis”p.13
“this year, we have a plan to invest around another INR50 crores in capex... we'll be investing approximately the same amount next year also”p.6
“the earliest that we can put in our complete capacity would be something like in calendar '27. And so we'll be looking at the big ramp-up taking place in our large generator business only in calendar '28”p.8
“on an average, we can say conservatively, we'll definitely be able to grow 20% to 25% even next year over this year.”p.13
“domestic steam turbine market is growing steadily... we are expecting 10% to 12% growth”p.10
“we are heavily focused on Q1 execution, where based on the progress so far, we see that we will do better than Q4 of last financial year.”p.3
“you can expect gross contribution levels to move back to the average historical levels.”p.5
“The current rate of order inflow for the past two quarters has exceeded Rs.600 crores and approaching an average of ~Rs 650 crores per quarter.”p.33
“our turbine customers, engine customers are, on an average, planning to double capacity by 2030”p.6
95 commitments tracked against quarter ending 31 Mar 2026.
8/35 commitments delivered or delivered late across 95 tracked items (score 0.243). 21 expired silently (target date passed, never confirmed met).
CFO/PAT: FY25 0.23 (40/175), FY26 0.54 (129/239); 3y avg ~0.55 vs threshold 0.8
Concall: 'trade receivables...INR7,420.88 mn vs INR4,375.4 mn — outpacing topline growth; EBITDA-to-CFO conversion ~21%'