Quality Power Electrical Equipments Ltd (QPOWER) Q2FY27 Concall Transcript - Sep-2026 Qtr
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Moderator (Motilal Oswal Financial Services Limited): Ladies and gentlemen, good day, and welcome to Quality Power Electrical Equipments Limited Q2 FY '27 Earnings Conference Call, hosted by Motilal Oswal Financial Services Limited. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero on your touchtone phone. Please note this conference is being recorded. I now hand the conference over to Mr. Thank you, and over to you, sir.
Moderator (Motilal Oswal Financial Services Limited): Sir, you are not audible.
Bhageerathan Pandian (Quality Power Electrical Equipments Ltd): our manufacturing expansions, the progress at Win-Win Specialty Insulators and our capital allocation priorities. Let me begin with our manufacturing operations. The past quarter has been particularly demanding for our organization. We were simultaneously managing the final stages of commissioning two manufacturing facilities, obtaining regulatory approvals, completing multiple audits, meeting customer commitments, and resolving the challenges that arise when large industrial projects transition into operations. These activities have required considerable coordination across our businesses, often under demanding timelines. I would like to acknowledge the efforts of our teams across engineering, manufacturing, quality, procurement, finance, and project execution, who have managed these responsibilities alongside our ongoing operations. Establishing manufacturing capacity is one part of an investment. Bringing that capacity into commercial operations, qualifying it with customers, and achieving consistent production output is equally important. Our attention is now firmly directed towards these priorities. At Sangli, our global coil factory commenced manufacturing operations on 20th of October. The date also marked 25 years since Quality Power commenced operations, its journey on Dussehra in 2001. It was a fitting occasion to bring our new manufacturing facility into operation, marking another stage in the company's industrial expansion. We have commenced winding operations on three machines, completed the first round of ISO audits, and are preparing for final customer audits scheduled to start from the end of November. With the commissioning phase substantially behind us, our priorities are centered on production stabilization, customer qualification, workforce productivity, and capacity utilization. These investments expands into This investment expands our manufacturing infrastructure for high-voltage reactors up to 1,050 kV and enables us to address larger and more technically demanding customer requirements. In Turkey, our new PCS factory for BESS application at Nigde has also commenced manufacturing operations. The facility is already operating in full manufacturing mode, with production activities aligned to customer projects. Billing may commence during the current quarter subject to completion of contractual milestones and customer acceptance requirements. With these two facilities entering operations, we have reached an important stage in our manufacturing investment program. The focus now moves from capacity creation to capacity utilization, operational efficiency, and commercial execution. Moving to Win-Win Specialty Insulators, the development at Win-Win over the past 2 months deserves particular mention. The team has successfully completed type tests in accordance with applicable American and European standards for porcelain insulators up to 400 kV within the last two months. At the same time, Win-Win has also secured orders for 800 kV HVDC porcelain insulators and also 765 kV AC and 400 kV AC applications from all the large Indian utilities and equipment manufacturers, including Power Grid. These activities are significant in a business where technical qualification, manufacturing capability, and customer acceptance are fundamental to securing orders. The response from customers has been encouraging and reinforces our assessment of the market opportunity for high-voltage porcelain insulators. I would like to specifically acknowledge the engineering, testing, manufacturing, and commercial teams at WS Insulators for achieving these milestones while acquisition process remains underway. We are now beginning the process of integrating the teams and align aligning customer relationships, technical capabilities, and operational systems. Our operational Our approach will be to preserve the manufacturing strengths and customer relationships established at WS while leveraging the broader market presence of Quality Power. Let me address our capital raising plans through QIP. We are progressing with preparations for a proposed QIP and are targeting November subject to regulatory approvals, market conditions, and other applicable requirements. Our capital allocation priorities are focused on four areas:
Bhageerathan Pandian (Quality Power Electrical Equipments Ltd): business, and fourth, strengthening our working capital position to support the execution of larger customer orders across the group, which we expect in the next few quarters. As our order book expands, the associated requirements for procurement, inventory, manufacturing, and project execution also increase. Maintaining adequate working capital is therefore an integral part of managing this growth. Our approach to capital allocation remains disciplined. Investments must be supported by business requirements, manufacturing capability, and clear understanding of execution priorities. Coming to the demand environment and our order book, our consolidated order book for the first time crossed ₹2,000 crores, excluding the order book of win-win specialty insulators. We continue to witness demand across reactors, instrument transformers, insulators, power conversion equipments, and FACTS equipment. Investments in transmission infrastructure, HVDC, FACTS, renewable integration, grid stability, and energy storage continue to remain opportunities across our product portfolio. However, demand must be viewed alongside the realities of execution. The global supply chain for specialized electrical equipment remains constrained. Geopolitical developments, changing trade conditions, logistics disruptions, disruptions and extended procurement lead times are placing additional pressure on manufacturing and project schedules. For a business such as ours, involving engineered products, international sourcing, and customer-specific manufacturing, these conditions require careful planning and coordination. Our response is centered on strict procurement discipline, supplier diversification, manufacturing flexibility, and closer alignment between engineering, production, and customer delivery schedules. We also recognize that an expanding order book requires corresponding improvements in organizational capacity, manufacturing throughput, and working capital efficiency. Our operating priorities therefore remain consistent: qualifying our new facilities, improve production output, integrate our businesses, maintain quality standards, and execute customer commitments with financial discipline. Before I conclude, I would like to acknowledge our people once again. Over the past several months, a substantial part of our organization has been engaged in bringing new manufacturing investments into operation, supporting regulatory and customer qualifications, progressing the WS transaction, and meeting our existing delivery obligations. These activities have demanded considerable effort across our teams in India and Turkey. I would like to thank every employee and management team involved for their contribution. Over the last 25 years, Quality Power has developed its businesses through engineering capabilities, manufacturing investments, and long-standing customer relationships. The investments we are made are intended to build on that foundation. Our focus is now on translating the manufacturing infrastructure we have created into production output, disciplined execution, and financial performance. I will now hand over the call to Mr. Sanjot for the operational review. Thank you.
Sanjog Mantri (Quality Power Electrical Equipments Ltd): Thank you, Mr. Bhageerathan Pandian. Good afternoon to everybody. I would like to briefly update you on the operational activities at our Sangli facilities during this quarter. The past few months have involved several activities running in parallel, including customer inspections, multiple quality and compliance audits, execution of existing orders, and the transition of manufacturing activities to our new global coil factory. Our production, quality, engineering, and maintenance teams have been managing these activities while continuing to support customer delivery requirements. I would like to acknowledge the efforts of our employees, particularly those on the shop floor, who have worked through these operational changes relentlessly. With the commencement of production at the new factory, our attention is now on stabilizing manufacturing processes, improving material flow, and increasing production throughput. One of our operating principles is to improve output per employee through better production planning, standardization of processes, and more effective utilization of available manpower. We are also examining revised productivity-linked incentive schemes that align employee earnings with measurable improvements in output, quality, and efficiency. In parallel, we are identifying areas where mechanization and automation can reduce manual intervention, improve process consistency, and optimize manpower requirements. These measures are being considered across winding, material handling, and other repetitive manufacturing activities. The scale of activities undertaken during this quarter has also highlighted the need for better coordination between departments, more disciplined production scheduling, and clearer allocation of resources. At Sangli, the immediate emphasis remains on
Sanjog Mantri (Quality Power Electrical Equipments Ltd): improving productivity from the existing workforce, reducing process inefficiencies, maintaining quality standards and ensuring that the new manufacturing infrastructure is utilized effectively. I would like to thank our production, engineering, quality and support teams for their contribution during this period. Thank you, and I hand it over to our CFO, Mr. Rajesh Jayaraman, please.
Rajesh Jayaraman (Quality Power Electrical Equipments Ltd): Thank you, Mr. Bharani. Hi, Mr. Sandeep. Good afternoon everyone. I will briefly take you to the financial performance of Quality Power for second quarter and first half of financial year '27. For the quarter, our consolidated revenue from operations stood at ₹285.45 crores, while profit after tax reached ₹63.33 crores, representing a year-on-year growth of 80.10%. Our financial performance reflects the business mix, operating efficiencies, and continued attention to cost management across the group. Our consolidated order book has crossed ₹2,000 crores. With the commencement of manufacturing operations at our new facilities, our focus remains on financial discipline, working capital management, procurement planning, customer collections, and monitoring capital expenditure. We continue to review the financial performance of our subsidiaries with particular attention to margins, inventory, receivables, and cash flow. As our operations expand, maintaining financial controls and ensuring accountability across business units remains central to our approach. I would also like to take this opportunity to acknowledge the efforts of our finance, accounts, and secretarial teams. Over the past few months, the teams have been working simultaneously on the preferential issue, preparations for the QIP, due diligence relating to the bim-bim acquisition, regulatory compliances, and the quarterly financial results. These activities involved considerable coordination across departments, external advisors, and regulatory stakeholders. It has been a collective effort, and I'd like to thank everyone involved for their contribution. I would also like to thank our statutory auditors and other audit teams for their continued engagement and support throughout these processes. As we move ahead, our financial priorities remain consistent: disciplined capital allocation, cost control, working capital management, and focused execution. Thank you. We can now proceed to the question-and-answer session.
Moderator: Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Manav Singhal, an Individual Investor. Please go ahead.
Manav Singhal: Hi. Thank you for the opportunity, and congratulations on a great set of numbers. So, as we understand, sir, that you are raising around ₹700 crores via QIP, and you just mentioned the proceeds of this fund raise, but could you be more specific as to how much quantum will be utilized for each fund raise, and within capacity expansion as well, what will be the exact utilization of this money that will be raised?
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