Generator and electric motor manufacturer TD Power Systems has signed a five-year contract to supply traction motors to Europe, and sees a Rs 300 crore opportunity from the business. Shares of TD Power were higher by over 2% in mid-day trade on October 21.
TD Power said the five-year contract for traction motors was signed with an Indian entity of a major international company. "The initial order worth Rs 18 crore has been received by the Company for scheduled delivery in April 2025. The total business volume is expected to be around Rs 300 crore over the next 5 years."
A traction motor converts electric energy into mechanical energy to propel something forward, or to rotate a machine.
TD Power has been focusing on expanding presence in overseas market, which it says presents a 'much larger opportunity' for the company as it has several verticals. "Definitely, for us, the export market is a much larger opportunity, and we are seeing more growth coming for us from these segments. In particular, we are seeing very, very big growth taking place in gas engines, gas turbines and hydro," TD Power said during the June quarter earnings call.
The transition towards renewable energy and businesses like waste to heat are driving demand in this category. The increasing demand for electricity for the EV sector is also a major factor driving overseas business potential for TD Power. The company now exports 4-pole and 2-pole generators to the Middle East's oil and gas industry, and is supplying motors to steel, cement and power sectors.
The market for traction motors for Indian Railways has become very competitive, TD Power said, hence they have been staying away for the past few quarters, and only suppplying small quantities for the railways orders. "Our strategy is to just be active to a minimum extent and then once the prices recover, to go a little bit more aggressive in that market." The company is hopeful that opportunity size scales up to Rs 100 crore in this segment.
During FY24, the total order inflows was at Ts Rs 1,051 crore, with domestic order at 43%, and export including deemed exports orders at 57% of the orders.
Shares of TD Power are higher by 71% in the last one year, and the company has a market capitalisation of around Rs 6,450 crore.
The company recently bagged two major international gas engine generator orders worth Rs 142 crore.
For the June quarter, TD Power posted a Net Sales of Rs 273.78 crore, up 24.28% on year, and a Net Profit of Rs 35.35 crore, up 32.62% on year.
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