Triveni Turbine’s over 40-45 percent of revenue comes from the export market, Nikhil Sawhney, VC & MD, told CNBC-TV18. Sawhney also said that the export market is margin accretive.
The company reported a mixed set of earnings for the September-ended quarter. Revenues have gone up by 11.5 percent year-on-year (YoY). However, margins have come down from 27 percent at the same time last year to now 19.3 percent.
“We have, historically, seen over 40-45 percent of our revenue coming from the export market, which is a higher margin. In this quarter, we have seen a significantly higher domestic participation in our revenue and that has contributed to a lower margin level. Of course, there is an impact of near-term commodity price increases,” said Sawhney.
On renewable energy, he said, "Over the last 5-6 years, we have seen Triveni Turbine transition to renewable-based products as well as customer base. In fact, nearly 55-60 percent of our orderbook is from renewable energy space and another 20 percent odd from sectors such as waste heat recovery, etc., which are also renewable in nature. Therefore, we do need to invest more in the renewables space."
"We had an order intake of Rs 307 crore for the past quarter and now our orderbook stands at Rs 828 crore, which is somewhat at the same level as our total revenue of last year," he said.
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According to him, there is a need to invest in after-market digital solutions for customers. "Our typical product cycle lasts between 25-30 years and so we do need to be with the customer for that period of time. From the company's perspective, about 80-85 percent of the value of a customer, in terms of profitability, comes from the after-market and so we do need to invest in after-market solutions from a digital perspective to be able to be with our customers from near-time and on-time perspective,” said Sawhney.
For the entire management interview, watch the video.