triveni turbine ltd Management discussions
GLOBAL ECONOMY
The global economy registered a growth of 3.4% in 2022, led by emerging and developing economies (EMDE) reporting a 4.0% growth, followed by advanced economies at 2.7%, according to the World Economic Outlook 2023 report published by International Monetary Fund (IMF). The growth projection for the global economy in 2023 is expected to fall to 2.8%, owing to worsening economic outlook, continued high inflation and geopolitical tensions. The economic growth prospects for the EMDE are projected to be stronger than the advanced economies, at 3.9% in 2023, while the growth forecasts for India and China stand at 5.9% and 5.2% respectively. In sharp contrast to this, the advanced economies are expected to decline to 1.3% in 2023.
Despite the economic outlook, decarbonisation and energy transition efforts continue to gather momentum. In the last few years, Governments across the world have made a host of commitments to sustainability especially in the run_up to and after the COP26 meeting in Glasgow in 2021 and these remain the bedrock for many energy strategies. In the last year, the world faced an unprecedented energy crisis which affected fuel supply especially natural gas leading to higher energy bills and supply shortages. This energy crisis promises to be a historic turning point towards a cleaner and more secure energy system which will drive greater alignment of economic, climate and security priorities.
GLOBAL ENERGY DEMAND
Global energy demand has experienced a significant increase over the past decade, driven by various factors. With the growth of population and industrialisation in developing countries, there has been a surge in energy consumption. Additionally, advancements in technology and the increasing reliance on electronic devices have contributed to higher energy demands worldwide. The expansion of transportation sectors, particularly in emerging economies, has also played a role in driving up energy requirements. Overall, the demand for energy has steadily risen, and this upward trend is likely to continue as economies develop and populations grow.
According to Renewables 2022 Global Status Report, worldwide energy demand increased an estimated 4% as economic activity rebounded in 2021. Heating and cooling contribute to 51% the Total Final Energy Consumption (TFEC), followed by transport at 32% and power at 17%. The penetration of renewables was lowest in those sectors that consume the greatest amount of energy. The highest penetration was in the general use of electricity (such as for lighting and appliances but excluding electricity for heating, cooling and transport), which accounted for around 17% of TFEC. Energy use for transport represented around 32% of TFEC and had the lowest share of renewables (3.7%).
The remaining thermal energy uses, which include space and water heating, space cooling, and industrial process heat, accounted for more than half (51%) of TFEC; of this, around 11.2% was supplied by renewables. The industrial sector includes energy consumption in manufacturing plants, refineries, mining operations, and other industrial processes. Energy is used for powering machinery, heating, cooling, and various industrial processes. Triveni Turbines caters to the industrial component of the overall heating and cooling segment, that contributes more than half of the global energy demand and includes both heat and power solutions. The comparatively lower contribution of renewables in the industrial segment highlights the demand potential for companies like ours that have a strong product portfolio and value proposition in the renewable space.
Several demand drivers and trends have shaped the global energy landscape. The transition towards cleaner and more sustainable energy sources has gained traction, as concerns about climate change and environmental sustainability have grown. Renewable energy technologies have seen remarkable growth, driven by declining costs and government incentives. The push for energy efficiency has also gained prominence, as individuals, businesses, and governments seek to reduce waste and optimise energy usage. Moreover, the electrification of various sectors, including transportation and heating, is an emerging trend that is expected to increase energy demand but can lead to a shift towards cleaner energy sources. As the world continues to address the challenges of energy demand, these drivers and trends will shape the future of global energy consumption.
GLOBAL POWER SECTOR
The global power sector which contributes to 17% of TFEC is a crucial part of the global economy, providing electricity needed for lighting and appliances, around the world. The sector is responsible for generating and distributing electricity from a wide variety of sources, including renewable sources like biomass, wind and solar, along with fossil fuels, nuclear energy, etc. With the growing demand for energy and the need to reduce carbon emissions, the power sector is undergoing a significant transformation towards cleaner and more sustainable sources of energy. This transition is expected to accelerate in the coming years, as countries and companies strive to meet their climate targets and achieve a more sustainable future.
During a year of tentative economic recovery, the renewable power sector took a large step forward, deploying a record amount of new capacity and experiencing greater geographic diversification. However, projects continued to be disrupted by supply chain issues and shipping delays, and a global rise in commodity prices led to surging prices for wind and solar power components. Despite the record capacity additions, the trends remain far from the deployment needed to keep the world on track to reach net zero emissions by 2050.
INDIAN POWER SECTOR
The Indian power generation industry has observed some key trends, like sustainable power development, enhanced focus towards concerns related to climate change, as well as eco-friendly policies. It is largely expected that the industry may witness greater acceleration towards eco-friendly "Green Power" solutions going forward. The past few years have seen Indias energy needs go up exponentially on account of rapid economic growth, as well as overall industrialisation and urbanisation. As per Ministry of New and Renewable Energy (MNRE), as of March 2023, India has total installed power generation capacity of 415 GW – a growth of 5% over March 2022. Of this, 41% share, i.e. 172 GW, is renewable power generation capacity, as of March 2023.
INDIAN MANUFACTURING SECTOR – SIGNIFICANCE OF CAPTIVE POWER GENERATION
The sector is fast emerging as one of the high growth sectors, driven by the Governments ‘Make in India programme aimed at placing the country on the world manufacturing map. Rising input costs (energy) and electricity prices, coupled with stringent Government regulations, are expected to drive investment in the establishment of captive power plants for continued uninterrupted power supply, leading to sustainable industrial operations.
Captive power generation is emerging as a key requirement for many manufacturing companies, where grid disturbances in power supply can affect the operations. Improvement in coal supply, growing awareness about renewable energy, and eco-friendly power generation policies will enhance the captive power additions in the country. The largest market for captive power generation in the country is the Industrial sector, mainly on account of the increasing demand for electricity from energy-intensive industries such as Cement, Steel, Petroleum Refineries and Chemicals, etc.
Captive power generation units can be fired using both fossil fuel and renewable fuel. The renewable fuel sources comprise non-thermal (such as Hydro, Solar Photovoltaic (PV) and Wind) and thermal (such as Bio-Power, Waste to Energy (WtE), Waste Heat, Concentrated Solar Power and Geothermal Power).
INTRODUCTION TO TRIVENI TURBINES AND THE OPPORTUNITIES FOR STEAM TURBINES IN POWER GENERATION APPLICATIONS
For the last 50 years, Triveni Turbines has manufactured and assembled engineered steam turbine solutions for meeting the heat and power requirements of industrial customers across the globe. The Company is a focussed, growing and market-leading corporation having core competency in the area of industrial heat & power solutions and decentralised steam-based renewable turbines up to 100 MW size. Our customers include end-user industries like Sugar, Distillery, Cement, Steel, Food Processing, Pulp & Paper, Pharmaceuticals, Petroleum Refineries, Chemicals, Petrochemicals and Fertilisers etc.
Steam turbines play a critical role in meeting the global energy requirements. These machines are widely used to generate electricity from steam, and are considered to be one of the most efficient ways to convert heat energy into mechanical energy, which can be further converted into electrical energy.
Steam turbines can also serve as a decentralised renewable energy provider, particularly in areas where there is a lack of access to the main power grid or unreliable power supply. In this context, steam turbines can be used in conjunction with renewable energy sources, such as solar or geothermal, to provide reliable and clean energy to users. Decentralised power generation refers to the production of electricity closer to the point of consumption, which can help to increase energy efficiency and reliability, reduce transmission losses and costs, and promote energy security. By using steam turbines in conjunction with solar, geothermal, or waste-to-energy sources, communities can generate clean and reliable energy while reducing their dependence on fossil fuels and increasing their energy security and resilience.
The Bio-Power industry turns many potential feedstocks into solid fuels (biomass or wood pellets, sugarcane residues and palm oil residues etc.), liquid biofuels (ethanol etc.) and gaseous fuels (biogas, landfill gas), which are then used to produce electricity, heat and transport fuels.
The residues from Sugar industry in the form of Biomass (Bagasse) are used as fuel to generate power that is sustainable. Aided by the National Policy on Biofuels and the incentives offered by the Government (on soft loans etc.), India is witnessing huge investment by sugar companies in both Greenfield and Brownfield expansions of sugarcane-based and grain-based distilleries. This will open up huge opportunity for steam turbines in the future.
The Pulp and Paper industry constantly focusses on improving energy efficiency, which is attained through increased use of non-Bagasse (e.g. wood waste) based fuel for power generation, and through appropriate usage of steam. With many paper companies in India looking at energy conservation through eco-friendly ways, this will lead to more opportunity for steam turbines.
The industrial use of biomass, particularly from sugar and palm oil mills, as well as wood waste from pulp and paper mills, is conducive to the production of power for captive consumption. About 70% of the biomass power globally is currently co-generated with process heat, as seen in the use of heat sources for district heating in European countries, and for industrial process heating applications the world over.
The drive to utilise locally available agricultural and forest residues has enabled generation of power closer to the point of consumption, which in turn has facilitated setting up of biomass-based power production facilities.
Waste-to-energy (WtE) Industry refers to a variety of treatment technologies that convert waste to electricity, heat, fuel or other usable materials, as well as a range of residues. There are several primary waste streams in urban areas, with Municipal Solid Waste (MSW) being one among them. MSW streams are disposed of in municipal landfills, followed by Commercial and Industrial Waste (CIW), to set up WtE based power production facility that utilises energy value in waste to generate electricity and/or heat.
Thermal treatment of waste is an environmentally acceptable alternative method, also known as incineration with energy recovery. It is a major waste treatment method in some developed countries, and by far the most widely adopted technology that dominates the global WtE industry. The Refuse Derived Fuel (RDF) production involves separating, sorting, drying and compressing the combustible portion of the waste, resulting in a product which can be used as a feedstock for any of the three thermal processes, or combusted in an industrial application.
Energy efficiency has become a top priority for the Cement industry but adoption of Waste Heat Recovery (WHR) systems in cement facilities still has a long way to go. Large cement companies are primarily considering WHR based power plants for their Greenfield projects, which will lead to more opportunities for steam turbines and create awareness among medium and small sized cement companies. Triveni Turbines has developed efficient injection condensing turbines that use medium pressure steam as turbine inlet and low pressure as injection steam.
The Steel industry is characterised by high load variations on account of many on and off conditions of furnace and kiln, causing load fluctuations in furnaces and kilns, and thus affecting the stability of the grid and quality of power supply. Therefore, it is extremely critical to have a constant and reliable source of power. Power has been one of the major cost components of the Steel industry. Hence, the availability of captive power becomes crucial for continuous operation of a steel plant. The opportunity for steam turbines from integrated steel plants in India for Direct-Reduced Iron (DRI) processes is quite significant. The waste heat recovered from the DRI plant will meet the captive power requirement of the steel plant.
The Oil & Gas Industry is encountering several difficulties due to contemporary energy refining methods. As a result, customers are actively seeking ways to optimise energy efficiency, decrease their carbon footprint, and reduce operating expenses. The cost-competitive nature and the ever-changing demands of end-users have motivated them to pursue plant efficiency improvements through energy recovery technologies, ultimately minimising energy wastage. In this scenario, the potential for steam turbines can be harnessed by providing high efficiency turbines for both power generation and drive applications.
ADVANTAGES OF TRIVENIS STEAM TURBINE GENERATORS IN COMBINED HEAT AND POWER APPLICATIONS (CHP)
Triveni Turbines provides steam turbine solutions that use low pressure steam, generated through extraction turbine for heating application by producing both heat and electric power. The cost of power generated through this process is 14-15% lower as against that of power generated through IPPs.
While solar renewable energy is used as a utility power plant only during the day, power produced through CHP/ cogeneration benefits the plant throughout the day by addressing its combined heat and power requirements. This gives the latter a strong edge. As a result, the ongoing rapid increase in electricity consumption, coupled with growing focus on electricity generation through biomass energy sources, thermal treatment of waste and recovery of waste heat, is expected to unleash sustainable power generation through the cost-effective approach of combining both heat and power.
GLOBAL STEAM TURBINE MARKET OVERVIEW
Utility Turbines leading to long-term decline in global steam turbine market
The global steam turbine market has witnessed a decline of 4% per annum, from 115 GW in 2012 to 74 GW in 2022. This is largely attributable to a 4.7% p.a. decline during 2012-2022 in the >100 MW market category (utility turbines), due to transition to renewable and clean energy technologies from coal-based power technologies in countries across the globe. This segment currently accounts for 88% of the overall market.
In 2022, the overall global steam turbine market grew to 74 GW, up 34% year-on-year driven by growth in the segment of utility turbines driven by increased global demand following a sluggish year due to the pandemic.
Overall Global Steam Turbine Market has been Declining over the years (in GW)
Triveni Turbines operates in the industrial steam turbines market below 100 MW, and this segment is marginally down (CAGR of -0.1% p.a.) during 2012-2022. Within this, the <30 MW or smaller range, the market has registered a CAGR of 1.2%. And in the 30.1 to 100 MW range, the market has seen a decline of 1.1% CAGR.
In 2022, the <100 MW global steam turbine market declined 30% year-on-year to 8.8 GW, majorly due to lower demand from China on account of continued lockdowns along with Russia.
Triveni Turbines is among the Top two players globally in <100 MW segment
In the last decade, Triveni Turbines, has outperformed broader market trends owing to the increasing demand for steam turbines in its addressable markets as well as expansion in the Companys market share. Triveni Turbines market leadership has been built on a foundation of strong and continuously evolving research, development and engineering capabilities. The customer-centric approach to R&D, along with a keen focus on delivered product and life-cycle cost has allowed Triveni Turbines to set benchmarks for efficiency, robustness and up-time of the turbine. As a result, the Company is among the top 2 globally in a technically challenging field dominated by large multinationals. The Company has also benefited from a dominant position in the renewable-fuel based segments such as biomass-based power production, Waste to Energy (WtE), Waste Heat Recovery.
Thermal renewable fuel-based power generation increasing
In the last 10 years, in the overall steam turbine market, fossil fuel-based power generation, previously the main source of fuel, declined to 57% in 2022 from 74% in 2012, whereas thermal renewable fuel-based power generation increased to 9% in 2022 from 4% in 2012.
However, unlike the global steam turbine market where fossil fuel dominates, in the <100 MW range, where Triveni operates the growth of thermal renewables has been quite consistent and strong. The share of thermal renewable fuels is quite significant, at 66% in 2022 compared to 37% in 2012. In contrast, the share of the fossil fuel declined to 15% in 2022 from 21% in 2012.
INDIAN STEAM TURBINE MARKET OVERVIEW
In 2022, the Indian Steam Turbine market for sub-100 MW range grew 15% (in MW terms) over 2021, whereas the sub-30 MW range grew 22% (in MW terms) over 2021. The demand for heat and power from the industrial segment was the key factor contributing to the rebound in the Steam Turbine market to the 2019 levels.
The market was primarily driven by thermal renewable based power plants (including biomass, waste heat and WtE), followed by fossil fuel fired power plants. Majority of the steam turbines requirement in 2022 came from power generation applications (using MSW, biomass, waste heat and fossil as the fuel), and from energy-intensive segments like Steel, Cement, besides segments like Sugar, Distillery, Food Processing, Pulp and Paper, Chemicals and Oil & Gas for Combined Heat and Power applications.
With the manufacturing sector on a growth trajectory, the demand for steam turbines is expected to remain robust in the future, owing to investments for increasing the production capacities among industries such as Sugar, Distillery, Steel, Cement, Pulp and Paper, Food Processing and Chemicals, among others.
PRODUCT BUSINESS REVIEW
Order Booking
Despite uncertainty in the global economy, the Company performed well in terms of overall order booking in FY 23. Finalisation of orders from industrial customers, followed by power producers (along with extended scope offerings) and API drive turbines, led to the higher order booking growth YoY.
The overall product order booking for FY 23 went up by 22% compared to the previous fiscal and reached Rs. 11.43 billion. This is the highest order booking ever in the history of the Company. Order booking for the product segment has grown at an impressive CAGR of 13% from FY 18 to FY 23.
In the domestic market, the Company registered product order booking growth of 38% compared to the previous fiscal. Key segments of this order intake in FY 23 were Sugar, Distillery, Food Processing, Pulp & Paper, Chemicals and Waste Heat Recovery (comprising Steel and Cement).
In the international market, the Company registered product order booking growth of 7% compared to the previous fiscal. We were able to close some key milestone orders in both small and large power ranges regions like Europe, Africa, Central & South America and North America.
Enquiry Generation
Overall enquiry generation increased 41% YoY in FY 23. Domestic enquiry generation declined by 16% YoY, with the West region garnering the highest enquiry base followed by the South and North regions. In terms of segments, Sugar and Distillery combined contributed the most to the enquiry base, followed by Process industries comprising Food Processing, Pulp & Paper, Chemicals etc., followed by Steel, Cement, IPPs and Oil & Gas (API – Drive Turbines).
International enquiry generation increased by 82% YoY compared to FY 22. Europe generated more enquiries, followed by Southeast Asia and Turkey. Among segments, IPP was the biggest contributor to the enquiry base, followed by Process industries, Steel and Oil & Gas segment (API – Drive Turbines).
A marginal slowdown was noticed in the domestic market and also in the international market (Middle East North Africa - MENA and Central & South America). The TTL team managed to overcome this and increased the enquiry generation, which is quite a positive development in the current scenario. The API enquiry base is spread across geographies, and comes from all the Original Equipment vendors, National Oil Companies (NOCs), EPCs/PMCs.
AFTERMARKET BUSINESS REVIEW
In FY 23, the aftermarket business unit experienced strong growth, thanks to a significant influx of new orders. This has further strengthened the units already diversified portfolio of revenue streams dedicated to servicing and optimising turbine performance globally.
Our mission is to ensure that turbines operate at maximum capacity. We are committed to providing full-service support throughout a turbines lifespan, from its initial commissioning to ensuring successful performance over its lifetime.
To reinforce its customer-centric philosophy, the Company has strategically located service offices throughout India, along with international offices in Europe, West Asia, Southeast Asia, and Africa. By providing prompt service support in different time zones, the Company is earning the trust of customers in overseas locations.
We collaborate with various other stakeholders to advance our offerings to the market. Our goal is to be the preferred lifetime service solutions provider for customers, supported by our culture of innovation, operational excellence, safety and quality.
As a multi-brand service provider, we leverage our accumulated knowledge to service turbines, regardless of their make. Our primary objective is to provide timely service and spare parts support, to ensure that customers achieve the designed performance of their turbines, ultimately leading to increased customer satisfaction. We achieve this through the deployment of innovative business models and hybrid asset integration and optimisation.
The success of the aftermarket business is evident in its order bookings and sales growth, which saw increases of 88% and 82%, respectively, in FY 23. With aftermarket contributing to 29% of order booking for the year (up from 21% in FY 22), the Company is confident that this segment will continue to provide a significant share of the overall growth in the coming years.
MANUFACTURING
Two state-of-the-art manufacturing facilities in Bengaluru, located at Peenya and Sompura (India), and one facility at Pretoria (South Africa) provide timely delivery of products and services to the customers. Each of the above facilities has full green cover, creating an oasis in the respective industrial areas. Our CapEx investments are aligned to further boost our capacity, to 250-300 turbines per annum, in FY 24.
TTL has carefully created its manufacturing capabilities in terms of infrastructure, human resources and processes to meet the current and future needs of the market and to serve the customers.
The manufacturing units are equipped with all the facilities required to produce and test steam turbines up to 100 MW. These include best-in-class high precision CNC machines from across the globe to produce critical parts such as casings, rotors, blades, nozzles and blade roots. TTL is one of the few steam turbine manufacturers globally to have such full-scale in-house facilities. Seamless component quality is assured through CAD-CAM-CNC machining – CMM process equipment with minimal manual intervention. Further, the CNC machines are IoT Industry 4.0 enabled, providing real-time production status. These high-end machines enable readiness of critical components from raw materials in the quickest possible time. The component manufacturing, as above, is coupled with adequate number of fully equipped steam turbine assembly-cum-test stations. Assembly facilities include blade mass and moment balancing machine, low speed balancing machine, high speed balancing machine, rotor run out test equipment, laser alignment equipment, SCADA etc. TTL balancing facilities are capable of providing high quality balanced rotors for any rotating equipment, from 60 Kg to 55,000 Kg mass, up to 32,000 RPM. Testing facilities include 100% standby diesel power plant, water treatment plants, boilers, condensers, and cooling towers as needed. TTLs facilities enable production and testing of the turbines as per the stringent API standards - API 611 and API 612.
Manufacturing processes are designed, implemented, continuously improved and certified to management systems such as Quality Management System – AS 9100D, ISO 9001:2015; Environmental Management System – ISO 14001: 2015; and Occupational Health & Safety Management System: ISO 45001:2018; The Indian Green Building Council (IGBC) green factory guidelines (Peenya facility has achieved Platinum rating as per IGBC). Manufacturing facilities are zero liquid discharge plants, which fully utilise the water and do not discharge any waste water outside the premises. TTL is harnessing solar power and has installed an additional 1,000 kW solar panels in its factory rooftops in its quest for green power and care to environment. Following this, a total of 1,300 kW of solar panels are in use, replacing the daytime use of electric power based on thermal power plants provided by BESCOM.
Manufacturing is supported by able and efficient supply chain partners, such as suppliers, sub-contractors and logistics partners. Competent supply chain partners are identified, developed and nurtured to provide seamless supply of parts and services. Performance of supply chain partners are continuously monitored and improved through periodical meets, audits, technical and other supports. Over a period, this has enabled TTL to build a trusted, capable and confident supply chain base to meet the quantum increase in the production levels.
Operations are integrated through SAP ERP, Primavera; while 5S, Daily Work Management, Lean Principles, Quality Circles, Small Group Activities, Root Cause Analysis, CFTs,
OEE, Kaizen are the various tools and techniques adopted to improve the processes, and to involve and empower the operating personnel. Peoples capabilities are improved through training and mentoring, including enabling of continuous learning through digital platforms.
Having undergone a significant capacity expansion last year with the addition of another bay (C-bay) at the Sompura facility, TTL is now prepared to deliver between 250-300 turbines annually, provide outstanding aftermarket service (spares, services, and refurbishing), and make prompt deliveries in accordance with customer demand in the years to come. In FY 23, the Company commissioned additional assembly and testing facilities along with heavy material handling facilities at its Sompura plant.
TECHNOLOGY, RESEARCH & DEVELOPMENT
Energy markets, globally, are demanding higher efficiencies & sustainable power generation. Over decades, Triveni Turbines has developed expertise in custom engineering turbine solutions, through in-house research & development (R&D). The innovations, in terms of advanced impulse & reaction blading and high efficiency low pressure stages allow Triveni to set energy conversion benchmarks. The product portfolio, which covers Power, Biomass, Waste-to-Energy (WtE) & Waste Heat Recovery (WHR - Chemicals, Paper, Cement, Pharma, Distillery and Hydrocarbon) applications, allows turbine offerings to diverse needs of the industry.
In FY 23, the focus of the R&D programme has been the following:
• Development of high-speed power density turbine models
• High efficiency turbine models, for higher MW range
• Expansion in the API turbine market
• Energy transition & sustainability products
High Speed Turbine Series
During the year, Triveni has developed turbines for high speed applications, which result in high power density models. These models are compact, more efficient & allow expansion into cold country markets, with high vacuum.
Turbine Series for High Efficiency
For the higher MW range, advanced LP module, enhanced efficiency HP blading & better LP flow control techniques permit Triveni to offer benchmark heat rates through its turbines.
Functionality, safety and reliability of the turbines are validated at Trivenis high-tech testing facilities – which include provision for high speed balancing (HSB), mechanical run test (MRT), Blade-Tip Vibration Measurement (BVM), Wheel Box Test for LP blades validation and in-house load test facility.
High Speed Axial Exhaust Turbine
Triveni continues to execute highly customised engineered turbine projects, which include axial exhaust turbines that help customers reduce the power plant footprint & civil cost by as much as 30%. These axial exhaust turbines, intended for export market, run at higher speeds as compared to past offering for axial exhaust arrangement.
Pillar Mounted Turbine-Baseplate Package
Customers face challenges in modernising the ageing power generation equipment. Existing powerhouse layouts require customers to demand the turbine vendors to meet stringent footprint requirements. Triveni has also developed novel mounting arrangement for the turbine-alternator package on the pillars of the plant instead of conventional support on a foundation deck. The turbine-alternator package, which is an export order to Europe, reduces the cost of civil work substantially.
API Turbine Series
API portfolio of Triveni caters to multitude of drive applications & offers solutions to specific customer needs from footprint & operational perspective. Customisation of API turbines include, but not limited to, governors, lubrication, bearings & supervisory instruments. Standardisation, modularity, introduction of new frames & enhancement of existing frame capabilities were also main pursuits of API product program.
Energy transition & sustainability products
Triveni Turbines is championing the energy transition efforts through development of subcritical and supercritical CO2 based power blocks. These technologies offer themselves as higher efficiency & compact replacements to steam-Rankine cycle.
World market for heat pumps is growing rapidly. Due to its favourable thermophysical properties, CO2 is regarded as an alternative in residential and commercial heat pumps. Triveni is associating with leading academic institutions to develop next generation transcritical CO2 Heat Pumps.
Innovative solutions for the Aftermarket business
Trivenis aftermarket business has built an excellent record in analysing issues in customers equipment & providing solutions that permit uninterrupted operation. Trivenis multi-brand refurbishing service called Triveni REFURB has redesigned, manufactured & supplied several power generation turbines to replace OEM equipment.
• Amongst very difficult engineering projects, some of the highlights are: Triveni REFURB has replaced internal components of above 300 MW direct drive turbine operating in a combined cycle application.
• A Geothermal rotor supplied with enhanced metallurgy and improved design, by Triveni REFURB, has continued to perform under demanding operating conditions, without experiencing wear outs.
Triveni has also provided re-lifting solutions for other turbomachinery equipment such as compressors, gas expanders, turbopumps and gas turbines.
Continuously upgrading analysis capabilities
Triveni is constantly looking to enhance the analysis capabilities for validation of a wide array of products developed at our research centre.
Associations & Awards
Triveni collaborates with domain experts in steam turbines. Association with renowned universities & design-houses, in India, Europe & USA, make Triveni uniquely positioned to bring products to market faster than competition.
During the year, the Company was awarded a Special Appreciation Award for its overall IP ecosystem in the 8th CII Industrial IP Awards, 2022.
Footnotes:
+Global Warming Potential (GWP) is an index of total energy added to the climate system, by use of a refrigerant, relative to that utilisation. Radiative Forcing is the concept behind
added by CO2
definition of Global Warming Potential. Radiative Forcing is the net change in the energy balance of Earth system due to adoption or release of a refrigerant into atmosphere. As a result of the release of a refrigerant, the balance of Earths absorbed radiative energy & re-radiated energy is disturbed, in effect, resulting in global mean surface temperature to rise. This Radiative Forcing is measured in W/m2 & influences the energy balance of radiated/re-radiated energy, for thousands of years, in case of some refrigerants. The ratio of net energy imbalance, relative to CO2 release, over a defined period of time (typically 100 years) is the GWP100.
R-32 & R-134A are the most common refrigerants (HFCs) used for Air Conditioners & Refrigerators, respectively. GWP100 of R-32 & R-134A are 677 & 1300 respectively.
INTELLECTUAL PROPERTY RIGHTS
Invaluable in-house Intellectual Property (IP) is generated through the research efforts undertaken by the Company. It is, therefore, a practical necessity to adequately protect these innovations & technological improvements for safeguarding the Companys innovative edge in the industry. A dedicated team of IP specialists works closely with the R&D team, from the initial planning and conceptualisation stage to the manufacturing stage, in order to capture and protect the generated IP.
For the protection of its long-term IP assets and building a robust IP portfolio, the Company has instituted a well-rounded IP strategy with the aim of securing and preserving its technological advantage in the industry. With its global focus and reach, the Company constantly undertakes patent and industrial design filings in various international jurisdictions, while enhancing its IP portfolio in India. The Company has filed for IP protection via patents and industrial design registrations in India, Europe, South East Asia, and in the United States of America, and plans to protect its IP in the new international markets where it serves. A substantial number of Intellectual Property Rights (IPRs) have already been awarded to the Company in India and other jurisdictions. The Company had filed 338 IPR in the market globally till March 31, 2023.
These include IPR filings in steam turbines and CO2 based
power systems. During the year, the Company was awarded a Special Appreciation Award for its overall IP ecosystem in the CII Industrial IP Awards.
IT AND DIGITALISATION
The Company has embarked on a journey towards digital transformation over the past few years. During the past couple of years, all of its processes have been digitised, and the Company continued its journey of digitalisation of key processes during FY 23.
The focus of our digitalisation efforts was sharpened around three aspects:
1. Strengthening and integration of digital core.
2. Value generation for customers and the Companys frontline personnel to deliver value.
3. Improving value delivery by supporting stakeholders to deliver value in the most process compliant and efficient manner.
The Companys digital core consists of various industry-standard hardware infrastructure and software platforms that support customer relationship management (Salesforce), product lifecycle management (Teamcenter), business processes (SAP, Primavera) and operations technology (Vericut, TopSolid, MasterCAM, D-MRT). Many of these platforms are already operating on Cloud. Interfacing across these platforms to seamlessly integrate their data is already happening with APIs. The Company will focus on transitioning to the latest technology for these platforms, either on-premise or on-Cloud. And, the focus will be on fully integrating all platforms to create unified product data management.
Customer value generation is at the core of the Companys digitalisation strategy. Be it faster response to customer sales enquiries or to customer complaints, the Company has focussed on developing IT/OT platforms that help its personnel to fulfil customer expectations. The Company is also integrating its huge body of knowledge about installed product base and processes into an integrated, IT-enabled knowledge management system. This will help our frontline personnel respond to customers faster on their queries and complaints, and deliver even better value on service.
With sizeable manufacturing footprint catering to global business, efficiency of value delivery system plays big role in the Companys success as a cost-leader in supplies and differentiator in service. Ensuring industry-standard hardware and software platforms is the starting point to give the Companys value delivery system an edge. This has continued with implementation of human capital management system (HCMS) that digitalised the Companys hire-to-retire process.
Multi-level security measures, to counter the ever increasing risk of data security and cyber security, are critically reviewed for their adequacy and effectiveness. Attempts to breach personal data and extract monetary benefits through social engineering by malicious actors have been thwarted during the year. The Company was successful in preventing any security breach during the year. But we realise that, especially in the matter of cyber security, past success is no guarantee for secure future. So we continue to be vigilant, upskill ourselves, and deploy the latest security measures.
SUPPLY CHAIN MANAGEMENT
One of Triveni Turbines competitive advantages remains its solid supplier base. To meet the increase in demand, TTL adopted a three-pronged strategy in consolidating the supplier base in FY 23: a) continuously enhance existing supplier capabilities, b) enhance capacities of existing suppliers, c) develop additional suppliers. Following due diligence, a significant number of suppliers and subcontractors were brought on board during FY 23 to increase capacities.
By including suppliers in the early stages of the development of new technology and products, and by utilising world-class supply chain management processes using the appropriate tools and systems across functions, the Company continues to be relentlessly focussed on improving the growth of its global supply chain. The business also keeps spending money on hiring, educating, and growing leaders to build one of the best supply chains in the market.
In order to maintain the necessary stock of raw materials and other commodities at appropriate levels and enable a smooth flow of production, the Company places the right attention and stress on inventory control. In addition, an ideal inventory buffer is built based on forecast in order to shorten the delivery cycle times, advance planning, and focus on enabling the Company to deal with supply chain disruptions brought on by COVID-19 and other global geopolitical upheavals. An ongoing focus is placed on periodical supplier meets, supplier education, training of supplier personnel, investment in suppliers operations and equipment, long-term contracts, building trust and support as needed, recognition to suppliers based on performance, etc. As a result, customers are receiving timely support for products and services, smoothly and continuously.
The Company conducts periodic vendor-wise spend analyses, and has put in place suitable control mechanisms (internal and also with suppliers) to guarantee compliance with regulations, on-time delivery, standardisation, desired level of quality, favourable reviews, and dependable business relationships.
The Company aspires to consistently enhance the customer experience in terms of quality, delivery and cost, with an emphasis on ensuring that its supply chain partners grow in a participatory and mutually beneficial manner. The pursuit of quality and supplier involvement continues with the aim to provide higher levels of customer satisfaction.
QUALITY ASSURANCE
Implementation of a quality management system that complies with AS 9100 D and ISO 9001:2015 criteria leads to continuous quality improvement across the value chain. Overall quality assurance is built on the foundation of production specific standards for steam turbines API 611 and API 612. For each of the customer projects, quality assurance plans are drawn, taking into account the mandatory requirements, customer & consultant-specific requirements, and country-specific requirements.
Continuous improvements are achieved in the customer satisfaction index and complaint resolution time through proactive customer feedback. Employees are sensitised, motivated and empowered to take appropriate actions to ensure improvement in customer satisfaction levels. TTL continues to assess the Net Promoter Score (NPS?) and is able to achieve improvements year-on-year. Areas for improvements are identified through customer feedback, and appropriate actions are taken.
In TTL, quality control permeates every step of the value chain. Starting with the quality of the proposal, order, project, engineering, supplier, process and product, it ends with the quality of the service. The level of staff competency is continually raised to fulfil the needs of clients from various market segments. Employees are encouraged and supported in their enrolment in specialised programmes offered by API, NACE, and other organisations.
Supplier quality plays an integral role in TTLs quality programme. Through the use of concurrent engineering, suppliers are involved from the beginning of the design process. Suppliers are accepted after passing through a set of quality gates. This facilitates the quickest and best product realisation. The quality of the finished product is guaranteed via design FMEA, validation using specialised software, and component-level QC. Quality assurance is deployed through SAP and primavera processes.
Converting the design intent into product reality is achieved by stringent in-house quality control. Quality control is exercised at three stages: raw material, in process, and final assembly & testing. TTL has necessary quality control equipment, such as Spectrometer, PMI, UT, MPI, LPT, a wide range of measuring instruments, laser alignment equipment, state-of-the-art CMM, and a wide range of conventional and digital measuring instruments in its array.
A number of QC professionals in the fields of metallurgy, NDT, welding, RLA, and failure analysis have been appointed by TTL. Leading research organisations support TTL in its quest to improve the quality of its product offerings.
Root cause and corrective action (RCA) and Kaizen have become a culture in the organisation, helping eradicate issues faced at the operational level and also at the customer end. This culture continues to yield better results in first pass yield (FPY) of the turbines Factory Acceptance Testing (FAT) and also helps in keeping the CoPQ (cost of poor quality) value under control.
Digitised supplier evaluation process continues to ensure balance between risks and opportunities, and helps in meeting the demand of on-time delivery of products with increase in number of turbines manufactured. Remote FAT inspection options to customers and supplier inspections ensure quick turnaround time (TAT) of quality control processes. TTL is also poised for improved data-based decision-making for delivering better quality through its digitisation programme.
World Quality Day celebrations were conducted in November 2022 by involving the employees throughout the organisation. In accordance with the theme for year "Quality conscience: Doing the right thing", various events were conducted. Employees presented the Kaizens implemented by them to showcase how small improvements can result in great success. This set the stage for ‘doing the right thing, at the right time. TTL won the Silver memento in the 3M competition organised by CII-TPM Club of India. TTL employees won prizes at the Quality Week competitions held by Quality Council of India.
Quality First continues to be the focus of the Company to serve its customers, both domestic and overseas, by providing reliable and competitive products / services.
HUMAN RESOURCES
Our Philosophy
Triveni Turbines believes in the power of people. The Company is conscious of the fact that a happy workplace results in engaged and energised partners. Riding on the energy levels of our people, we continue our efforts to scale greater heights, in business, technology, and processes.
Operating in dynamic global business scenarios over these years, the team at Triveni has developed an agile approach, resilience, and creativity to counter the increasing complexity, chaos and convergence in everything we come across. Our team stays focussed, confident and ready to rise to the occasion to own responsibility. We are committed to growth in the face of constant change.
People strategy well aligned with business strategy
Triveni Turbines people strategy is fully aligned to our business strategy, and it is aimed at enriching, enhancing, and building competencies in people to deliver consistently in a sustained manner. Our high-performance culture ensures that ambition is rewarded. Our commitment towards winning together ensures that loyalty and hard work is recognised. The right blend of creativity and convention helps us build a future-aligned organisation while retaining our core values.
In todays volatile market, the aptitude and ability to learn quickly, and promptly adapting to new situations is essential. Our people development policies are aimed at increasing the appetite for learning in our employees. High learnability allows individuals to acquire new skills and knowledge continuously, leading to consistent delivery and increased career opportunities within the Company, and ensuring faster personal growth. We also acknowledge the role of self-paced learning in the flow of life. Triveni Turbines believes in following a blended approach for learning, and has created avenues for employees to learn using different media and platforms, including online learning tools, besides conventional classroom sessions.
Engagement with employees and customers
Connect, communication and engagement with employees is a continuous practice embraced by us to enrich employee experience. Engagement initiatives like "Triveni Talk", "Trivenometry", "World Quality Day", and celebrating festivals and occasions, adds richness to the bonding of the teams while giving them opportunities to explore their creative sides.
We firmly believe in customer centricity, and thus keep customers at the centre of everything we do. This approach helps us to always be closer to the requirements of the customers. Partnering in regular customer engagement initiatives, like Net Promoter Score (NPS), continuous customer feedback on execution experience, Perceived Quality and User Experience (PQ & UX) testing, creativity workshops etc., is an important contributor to enriching customer experience.
Forward-looking approach
Triveni Turbines performance management and succession planning is Forward-looking. It rewards both potential and performance, building a robust leadership pipeline in the process. Competency development and job rotation help in engagement and enrichment of employees, striking a balance between their career aspirations and organisational growth.
Effective policies and processes
Our HR policies are completely aligned with the organisations goals and values. These policies cover various aspects of the employee life cycle, and enable a smooth employee experience. Our policies are regularly reviewed and updated to stay compliant, and in sync with the changing business needs. Effective HR policies and processes help us in growing, attracting and retaining top talents, promoting a positive work environment, and ensuring fair and consistent treatment of all employees. Our people-centric ecosystem results in psychological safety and emotional well-being, enabling our people to give their best. Our pro people outlook helps us to maintain a competitive edge by aligning best-inclass practices with the organisations strategic objectives.
Learning & development
Our Learning Centre is a dedicated, world-class, in-house training facility to make learning fun and focussed. We believe in being proactive to keep pace with the ever-changing business needs. We continuously revisit our offerings, including approach & content, to stay relevant and be business-ready. Development, engagement, and successful talent development through constant re-skilling and upskilling of employees, as well as building the leadership bench and creating a talent pipeline for the future, are critical to the growth ambitions of the Company. Building a resilient and future-ready team requires strategic orientation, long-term perspective, commitment to talent management, focus on developing high-potential employees, and a culture that values learning and growth. Developing internal competency, capability and capacity is our priority.
We are developing a futuristic mindset and an agile talent pool required to succeed in the long term. Our re-fuelled HR team, comprising domain specialists, provide the necessary direction and expertise to build capability and capacity to be future-ready to successfully meet the dynamic business scenarios. The Company continues to believe in building partnerships and drawing synergies with technological and management institutes to create talent availability for the future, and stay competent to augment future technologies for creating customer value.
FY 23 highlights – Focussed on talent acquisition and competency development
Headcount ramp-up was a major activity in FY 23 to support the business needs, based on the detailed strategic workforce planning carried out during the year. There was a net addition of 20% headcount (Permanent Employees: 722 in FY 23 compared to 603 in FY 22). This included roles across the business value chain, ranging from Technology, Sales, Service, Execution, HR, SCM and Finance. Besides this, connecting with premium institutes helped the organisation in selecting and engaging interns to build the future bench for technical talent, especially in the areas of Thermal, CFD, etc. The outlook for FY 24 is in a similar direction, keeping the business growth plans in perspective.
Competency development has been a key focus area to upskill and reskill our workforce for becoming future-ready. In FY 23, there has been a 20% increase in average man days of training per person for lateral hires despite the sizeable increase in headcount. Connecting with domain specialists like PMI (Project Management), RIMS (for Risk Management), etc. helped strengthen our readiness for certification in functional competencies, while Leadership for R&D Managers, etc. helped in building managerial competencies.
Besides this, our Learning Centre re-designed the training and competency building for the fresh engineers from college. The curriculum, spread over eight months, included core technical training (mechanical, electrical, etc.), practical training on our shop floor, machining vendors, as well as project sites. It was designed to strengthen the core capability in the fresh engineers. This is complemented by the coverage of behavioural topics like presentation skills, communication skills, working in teams, problem solving, etc. Additionally, our CBT centre has been instrumental in helping the new hires in simulated training on turbines.
ENVIRONMENT, HEALTH AND SAFETY (EHS)
TTL has implemented Environmental Management System and Occupational Health and Safety Systems complying with the requirements of ISO 14001:2015 and ISO 45001:2018 respectively. The management system is certified by Indian Register Quality Systems, accredited by RvA Netherlands.
Peenya factory is certified under The Indian Green Building Councils (IGBC) Green Factory building as a Platinum rated facility. The Company has initiated a system for monitoring its GHG (Greenhouse Gas) emissions during FY 23 as a part of its continual improvement programme.
Continual improvement in Environment, Health and Safety (EHS) parameters are achieved through operational controls and management programmes. TTL has an enviable track record of having zero man-hours lost due to accidents for the past several years. Robust engineering controls are in place in the factory premises, including a system for capturing of incidents to pre-empt the actions required for eliminating the accidents.
Cross-functional teams of employees focus on conservation of energy, water and natural resources and waste elimination through active participation in developing, implementing and improving the processes. All the shop floor personnel undergo annual health check-ups mandatorily.
TTLs manufacturing facilities are eco-friendly. Both the manufacturing facilities at Bengaluru are zero discharge facilities. Entire water is recycled and utilised for internal use, and no waste water is discharged beyond the premises. Oil used in the testing and other processes is recycled multiple times before finally being handed over to PCB approved recyclers for another lease of life. The entire premises are well lit with ample daylight and natural ventilation, thereby avoiding use of electric lights and air conditioners by design. Air conditioners are used only in conference rooms and CAD
/ CAM offices. Ample green cover with native trees forms a rainforest-like ambience, ensuring that the temperature in the campus is less than the surroundings. Rainwater harnessing is carried out through harnessing ponds and soak pits. The manufacturing facilities have plenty of green cover with native and exotic trees and plants, natural landscaping, rainwater harvesting facilities, and solar panels for harnessing renewable energy.
TTL has invested in an additional 1,000 kW solar power plant during FY 23 on its factory roof. With this, the maximum permissible solar capacity under BESCOM rules for roof mounted has been reached. Following this, a total of 1,300 kW of solar panels will be in use, replacing the daytime use of electric power based on thermal power plants provided by BESCOM. These facilities are scheduled to be commissioned in April 2023, with net metering facility to export surplus energy during holidays.
The entire campus is covered with electronic surveillance through CCTV and IT-enabled security systems.
BUSINESS OUTLOOK
For Triveni Turbines, the strong business performance for FY 23 is expected to continue during FY 24. This is on account of its strong carry-forward order book and continued development of new market segments of API turbines for Oil & Gas industry, as well as turbines in the higher power range. Prospects for the aftermarket segment are bright as well, with an increasing portfolio of offerings, viz. services, refurbishment and spares, across a wider customer base of steam turbines, utility turbines, geothermal rotors. Strong domestic supply chain guarantees competitive advantage and business continuity, even when global supply chains and economies are going through a rough patch. In order to continue generating value for customers, managing inflation-induced impact will be one of the key areas of focus for the Company.
The outlook for Indias economy is bright, albeit moderate compared to its own past performance. Thus, relatively stronger domestic conditions – higher growth, better conditions for business, credit availability, etc., will create more domestic business opportunities for the Company.
While slowdown in advanced economies, higher interest rates, and increased complexities of trade restrictions pose a challenge to maximise opportunities in international business, the increasing demands for renewable energy, waste to energy (Wte) and decentralised power solutions continue to present significant opportunities for companies like ours, to provide innovative solutions in these areas.
We believe these opportunities, both in domestic and international markets, will help Triveni Turbines sustain growth and margins in the coming years.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
CSR Objectives and Vision
The Company wishes to be perceived as a ‘Company with Conscience, and to actively and continually contribute to the social and economic development of the communities for the benefit of the deprived, underprivileged and differently abled persons. The Company continues to pursue its endeavour to improve the lives of people, and provide opportunities for their holistic development through its initiatives in the areas of Healthcare, Education & Training, and Technological Development.
At Triveni Turbines, we have always believed in doing well by doing good. It is our firm belief that the long-term success of a corporate depends on giving back to the society it operates in, and ensuring its operations are sustainable. All CSR projects/programmes undertaken for the period were conceived and implemented through a focussed approach towards the target beneficiaries for generating the maximum impact. They were undertaken in partnership with credible implementing agencies.
As an integral part of our commitment to good corporate citizenship, we strive to be a socially responsible company and strongly believe in development which is beneficial for the society at large. As a corporate citizen receiving various benefits out of the society, it is our co-extensive responsibility to pay back to the society in terms of keeping the environment clean and safe, by adhering to the best industrial practices and adopting the best technologies, and so on. It is the Companys intent to make a positive contribution to the society in which it lives and operates. In order to leverage the demographic dividend of our country, the Companys CSR efforts shall focus on Health, Education, Employability and Environment interventions for relevant target groups, ensuring diversity and giving preference to needy and deserving communities inhabiting urban India.
Triveni Turbines endeavours to integrate social and environment concerns in its business operations. The Company demonstrates an increased commitment at all levels in the organisation to operate is business in an economically, socially and environmentally sustainable manner. The objective of our CSR policy is to actively contribute to the social, environmental and economic development of the society.
CSR Focus Areas
Though there are many areas which can be addressed, due to Indias cultural diversity as well as lack of education, awareness and affordability of a quality life in the society, the Company has identified the following areas for the well-being of the people as a whole.
Education and Women Empowerment
India-Israel Master-Classes Series on Emerging Technologies
As part of its Education focus, the Company during FY 23, provided financial support to a non-profit organisation that focusses on value-based leadership development and open dialogue on important issues facing the Indian society, to steer its transformation. This non-profit organisation connected Indian students from universities and colleges with experts from Israeli academic institutions, companies and entrepreneurs through online classes. This Online Master Class series was an initiative to promote academic linkages between India and Israel by enhancing technical knowledge and awareness about emerging technologies among college students in India. Under the backdrop, the focus of these classes was to provide students the opportunity to understand emerging trends in technology, global standards, practices and augment capacity building in the field of emerging technologies.
The participating students had the opportunity to attend 4 Master Classes conducted by leading experts to understand contemporary trends and dynamics in the global technology front. Israel is at the forefront of breakthrough technology and these experts were leading Faculty members from different departments of the Tel Aviv University (Israel), School of Mechanical Engineering and School of Law.
Other Educational Initiatives
As part of its education and training programme for differently abled children, the Company provided required education, training and therapies, such as speech therapy, occupational therapy, visual therapy, orthopaedics treatments, to bring a qualitative change in the lives of the mentally and multiple challenged people.
The Company also provided financial support to the Government Model Primary School in Bengaluru by extending support to meet the expenses of the said Primary school. The initiative was aimed at enabling the children to further continue their education. The Company also provided stationery to the school for the students.
Technology and Innovation
CSR and innovations are the foundation of business competencies. Technology and innovation have merged slowly over the last decade, and improvements in the CSR process can be referred to as socio-innovations. A company should be able to contribute towards important issues such as social justices, poverty and climate change. The successful brands of the future will be only the ones that see these challenges as opportunities for innovation, rather than risks to be alleviated.
TTL has provided support to a leading academic institution in the extension of the Energy Research Laboratory facilities, which are involved in carrying out research programmes in the new area of power conversion. Trivenis assistance to leading academic institutions helps in enhancing localised content for products, and assists in the development of vendors and their supply chain. These initiatives contribute to socio-technological innovation, thereby serving the cause of social justice and poverty alleviation.
Healthcare
As a part of its CSR initiative, Triveni Turbine Limited sponsored a comprehensive health check-up programme for adult population, especially of the lower socio-economic strata, in a charitable hospital in Delhi. Under this project, the hospital provided free investigations and medical advice/ consultation to over 1,245 adults. Various problems, such as anaemia, hypothyroidism, diabetes & pre-diabetes, renal disease and liver disease were identified and treatment for the same was facilitated.
FINANCIAL REVIEW
Consolidated Financial Statements
The Consolidated financial results of the group for the financial year 2022-23 compared with the previous year are summarised below. The Consolidated financial statements have been prepared consolidating the results of subsidiaries Triveni Turbines (Europe) Pvt. Limited (TTEPL) wholly-owned subsidiary based in UK, Triveni Turbines DMCC (TTDMCC), wholly-owned subsidiary based in Dubai, Triveni Turbines Africa (Pty) Ltd (TTAPL) wholly-owned subsidiary based in South Africa, Triveni Energy Solutions Limited (TESL, formerly known as GE Triveni Limited) based in India, (only the share of profits was considered in the consolidated results until September 6, 2021 until which TESL was a joint venture and thereafter became a wholly-owned subsidiary of the Company) and TSE Engineering (Pty.) Ltd (TSE) based in South Africa became a subsidiary (70% controlled) effective March 1, 2022.
These subsidiaries cater to various needs such as customer preferences in jurisdiction, financial flexibility, local compliances and enhance operational efficiencies. The financial review is presented for Consolidated financial results as it presents a holistic view of the groups financial performance.
(Rs. in Million)
| Particulars | 2022-23 | 2021-22 | Change % |
| Revenue from operations | 12,476 | 8,522 | 46.4 |
| Other Income | 426 | 295 | 44.5 |
| EBITDA | 2,764 | 1,921 | 43.8 |
| EBITDA Margin | 22.2% | 22.5% | |
| Exceptional Items* | - | 1,982 | (100.0) |
| PBT | 2,555 | 3,648 | (30.0) |
| PAT | 1,929 | 2,702 | (28.6) |
| Total Comprehensive | 1,898 | 2,900 | (34.5) |
| Income | |||
| PBT excluding exceptional | 2,555 | 1,708 | 49.6 |
| items | |||
| PBT Margin excluding | 20.5% | 20.0% | |
| exceptional items | |||
| PAT excluding exceptional | 1,929 | 1,223 | 57.7 |
| items | |||
| PAT Margin excluding | 15.5% | 14.4% | |
| exceptional items |
* Exceptional Item represents settlement consideration received by the Company from D.I. Netherlands BV, net of associated expenses and provision of obsolete/non-useable inventories, as explained in Note No. 44 of the audited Consolidated financial statement of March 31, 2023.
The aforesaid summarised financial results are based on the Consolidated financial statements which have been prepared in accordance with Indian Accounting Standards (Ind AS) notified under the Companies Act, 2013 ("the Act") and other relevant provisions of the Act.
Consolidated Financial Performance
The Revenue from Operations at Rs.12,476 million has grown by 46.4% as compared to FY 22 due to an all-round strong performance including product, aftermarket and exports along with significant growth of Service business from overseas subsidiaries.
The EBITDA of Rs.2,764 million is higher as against previous years EBITDA of Rs. 1,921 million, an increase by 43.8%. EBITDA margins declined marginally by ~30bps to 22.2% in FY 23 as against 22.5% in FY 22 primarily due to increase in input cost.
As explained above during the previous year, the Group had earned a one-time Exceptional Income of Rs.1,982 million (net of expenses), which significantly increased the Profit of the Group during previous year and hence PBT and PAT are not comparable to current year.
Hence in order to assess a meaningful comparison, the one-time exceptional income of previous year is removed for better analysis. On the basis of above, the Profit Before Tax (PBT) for current year is Rs.2,555 million and is 49.6% higher than previous years PBT of Rs.1,708 million Similarly, the Profit After Tax (PAT) for current year is Rs.1,929 million and is 57.7% higher than previous years PAT of Rs.1,223 million.
Revenue from Operations
Revenue from Product sales has increased by 33.5% and Aftermarket sales by 81.9%. Higher revenues from international market contributed to overall improvement of Revenues by 46.4%. The revenue in Product as well as in Aftermarket Sales segment is shown below:
(Rs. in Million)
| Particulars | 2022-23 | 2021-22 | Change % |
| Product Sales | 8,359.0 | 6,259.7 | 33.5 |
| % to Total Sales | 67.0% | 73.5% | |
| Aftermarket Sales | 4,116.5 | 2,262.7 | 81.9 |
| % to Total Sales | 33.0% | 26.5% | |
| Total Sales | 12,475.5 | 8,522.4 | 46.4 |
During the year, the Company continued its growth both in domestic and export sales. However, the sales mix was unevenly skewed. While export sales recorded 121.3% increase in current year reflecting strong order book of the previous year, domestic sales increased by 14.9%. The exports during the year were higher than last year triggered by favourable global energy scenario and increase in capital infrastructure post relaxation of Covid-19 restrictions. Thus, demand from International market had doubled fetching high export order booking and orders in hand.
The overseas subsidiaries contributed a significant the growth in exports. The break-up of domestic and export sales and the % change in sales mix is shown in table below:
(Rs. in Million)
| Particulars | 2022-23 | 2021-22 | Change % |
| Export | 5,574.4 | 2,518.7 | 121.3 |
| % to Total Sales | 44.7% | 29.6% | |
| Domestic | 6,901.1 | 6,003.7 | 14.9 |
| % to Total Sales | 55.3% | 70.4% | |
| Total Sales | 12,475.5 | 8,522.4 | 46.4 |
Other Income
Other Income has increased by 44.5% over previous year, due to higher interest income from bank deposits by Rs. 82 million and income from mutual fund investments of Rs.91 million. The increase in surplus fund from operations in most part of the year yielded higher interest on returns from mutual funds. (Investment in bank deposits and mutual funds has reduced due to payout towards buyback amounting to Rs.1,900 million and dividend of Rs. 501 million during the year.) The Company continues to invest surplus fund in short-term high-quality liquid mutual fund and fixed deposits in reputed banks as per laid down policy of the Group.
Expenses
Cost of goods sold
( Rs. in Million)
| Particulars | 2022-23 | 2021-22 | Change % |
| Raw material consumption, | 6,471.4 | 4,702.5 | 37.6% |
| change in inventories | |||
| Subcontracting Charges | 864.5 | - | |
| 7,335.9 | 4,702.5 | 56.0 | |
| Percentage of sales | 58.8% | 55.2% |
Cost of goods sold i.e. Raw Material cost, changes in inventory and sub-contracting charges as percentage of sales has increased to 58.8% as compared to 55.2% in FY 22. Overall impact of price increase of raw material and component, relatively lower margin utility order in SADC region and general cost pressure on supply chain system across the economy has pushed up the cost.
Employee Cost
There is an increase of 24.9% in employee cost of the Company from previous year. The increase is due to annual increment as well as various HR strategies to augmenting the organisation structure required for meeting the growth strategies, mainly in design and engineering, digital systems, international marketing, supply chain and supporting functions. The Company has taken various initiatives/policies towards digital initiatives and automation. Accordingly, the Company is continuously focussing on to improve manpower productivity and customer satisfaction.
Other Expenses
The Other Expenses excluding subcontracting charges has gone up by 28.8% over previous year. Other expenses include manufacturing expenses, administrative expenses and selling expenses. Manufacturing expenses such as store, spares, tools, power and fuel etc., are semi-variable in nature and increase in these expenses is in proportion to higher production. The administrative cost has also gone up due to increase in business volume. The increase in opportunities in international and domestic markets has resulted in higher travelling and associated cost, especially international travel cost. Further, higher Exports during the year have resulted in corresponding higher Selling expenses. The rise in manufacturing and administrative cost is commensurate with higher level of operations in current year and also partly due to general inflation.
Depreciation and Amortisation
There are no material changes in Depreciation and Amortisation expenses as compared to previous year.
Balance Sheet
Major items, including where significant changes have taken place during the year are being explained hereunder:
Non-Current Assets
Property, Plant and Equipment (PPE), Capital work-in-progress & Intangible assets
Total additions to PPE and Intangible assets made during the year is Rs.425.4 million which mainly comprises Building of Rs.175.8 mIllion and Plant & machinery of Rs. 74.4 million on account of expansion at existing Sompura Unit to facilitate higher production to cater the growing market and setting up a new facility for Servicing at our subsidiary in South Africa, amounting to Rs. 69.6 million. Capital work-in-progress mainly represents extension/commissioning of Solar power in manufacturing facilities in India which is expected to capitalised in FY 24.
Current Assets
Inventories
Total inventories at the year-end stood at Rs.2,000.3 million, as against Rs.1,616.9 million in the previous year, an increase of Rs.383.4 million. The increase is majorly on account of planned purchase due to increase in orders in pipeline and orders in hand. Majority of these stock will be converted to Finished Goods in its normal production cycle.
Trade Receivables
Trade receivables have increased to Rs.1,292.8 million, as against Rs.1,014.8 million in the previous year. This increase of Rs.278.0 million over the previous year is due to higher sales during the year. These trade receivables are due as per contractual terms of payments and good in nature.
Other financial assets
Other financial assets have increased to Rs. 235.5 million, as against Rs.172.8 million in the previous year. This increase of Rs.62.7 million over the previous year is due to Increase in interest accrued on bank deposits by Rs.35.0 million and contract assets by Rs.47.8 million.
Other current assets
Other current assets have decreased by Rs.57.7 million over the previous year which is mainly due to higher realisation of export incentive resulting in decrease in export incentive receivables by Rs. 52.0 million, Indirect tax receivable has significant decreased by Rs.47.2 million due to receipt of GST refunds and utilisation of GST credit and compensated by increase in advance to suppliers by Rs.30.8 million. All other items under this head are normal in nature and fully recoverable.
Non-Current Liabilities
These mainly comprise deferred tax liabilities (net) and certain long-term provisions towards employee benefits as mandated by relevant provisions of Ind AS, warranty etc. which are made in normal course of business.
Current Liabilities
Current liabilities mainly consist of trade payable for purchase of goods and services and advances from Customers. Trade payable has increased by Rs.52.8 million to Rs.1,143.4 million, in view of higher purchase of raw material and components to cater to production for orders in hand. The payments to these vendors are not contractually due till the year end, and will be paid by due date.
The other major components of current liability are advances from customers which has increased by Rs. 681.4 million i.e. an increase of 23% as compared to FY 22 due to increase in order booking.
Headline figures for consolidated financial statements duly compared with standalone are provided hereunder:
(Rs. in Million)
Financial Statements |
||
| Particulars | Consolidated | Standalone |
| 1 Revenue from operations | 12,475.50 | 10,832.52 |
| 2 Profit before tax | 2,555.04 | 1,953.79 |
| 3 Profit after tax | 1,928.80 | 1,448.74 |
Continuing the momentum of strong cash generation from operations, the Group has maintained the working capital and strong liquidity. The free cash reserves generated from business operations during the year, have improved over the previous year even after the payout towards buyback of shares amounting Rs.1,900 million and dividend of Rs.500 million during the year.
KEY CONSOLIDATED RATIOS
| Ratios | FY 23 | FY 22 | Change % | Remarks |
| Debtors Turnover | 2.70 | 2.39 | 13.30 | Debtors turnover is higher due to increased turnover and lower average trade receivables. |
| Inventory Turnover | 3.58 | 2.93 | 22.24 | Inventory turnover is higher due to increased turnover and better supply chain management. |
| Current Ratio | 1.86 | 2.29 | (18.70) | Current ratio is lower due to higher advances from customers for orders in current year, and decrease in cash and investment balance due to buyback of shares. |
| Return to Equity | 23.83% | 16.37% | (45.62) | Return on equity is higher due to increase in profit during the year as compared to previous year and reduction in equity due to buy back. |
| Operating Margin (EBIDTA/ Sales) | 22.16% | 22.55% | (1.73) |
Operating margin is lower due to increase in cost of goods sold. |
| Net Profit Margin (PAT/Sales) | 15.46% | 14.35% | 7.71 | Net profit ratio is higher due to increase in profit during the year. |
Indicates favourable ratio movement from previous year Indicates adverse ratio movement from previous year
The calculation of above ratio is based on consolidated financial statements of the Group based on formulas used as described below and not necessarily in accordance with formula prescribed by Guidance note on Schedule III issued by The Institute of Chartered Accountants of India.
Formulas used in key ratios a) Debtors Turnover ratio: Revenue from operations divided by Average trade receivables. b) Inventory turnover ratio: Cost of materials consumed and Changes in inventories of finished goods and work-in-progress divided by Average inventories. c) Current ratio: Current assets divided by Current liability. d) Return on equity: PAT (Adjusted for exceptional items (net of tax impact) and share of loss from Joint venture) divided by average total equity. e) Operating Margin: EBITDA divided by revenue from operations. f) Net Profit Margin: PAT (Adjusted for exceptional items (net of tax impact) and share of loss from Joint venture) divided by revenue from operations.
Standalone Financial Statements
The financial results of the Company for FY 23 compared with the previous year are summarised hereunder:
( Rs. in Million)
| Particulars | 2022-23 | 2021-22 | Change % |
| Revenue from operations | 10,832.50 | 8,113.70 | 33.51 |
| Other Income | 391.40 | 264.90 | 47.72 |
| EBITDA | 2,151.2 | 1,716.40 | 25.33 |
| EBITDA Margin (%) | 19.86 | 21.15 | |
| Exceptional Items | - | 1,889.00 | (100.00) |
| PAT | 1,448.80 | 2,494.90 | (41.93) |
| PAT Margin (%) | 13.40 | 30.70 | |
| Other Comprehensive | (54.20) | 4.00 | |
| Income (net of Tax) | |||
| Total Comprehensive | 1,394.50 | 2,498.90 | (44.19) |
| Income |
SUBSIDIARIES/JOINT VENTURES
The financial performance of international subsidiaries of the Group continues to be in growth trajectory with positive outlook. However, the financial performance of the domestic subsidiary, that is TESL (which was a joint venture up to September 6, 2021) is lower than previous year. This is because, post dissolution of the Joint Venture (JV) structure, the business of > 30 MW turbines, which was earlier catered by the JV, is now integrated with the parent company. The main business of TESL was restricted to export services of existing contracts.
In March 2022, Triveni Turbines DMCC (TTDMCC), Dubai (a wholly-owned subsidiary of TTEPL), acquired 70% equity shares of TSE Engineering Pty. Ltd. (TSE), a company registered under the laws of South Africa and engaged in high precision engineering, repairs and servicing of industrial plant machinery in the South African Development Community (SADC) region.
In general, customers have been very acceptive and supportive of this new venture, and have welcomed this long-term investment by Triveni Turbine in the SADC market region. This would greatly enhance the Companys ability to respond faster to its customers in the SADC region, and build relationships with new customers requiring service and upgrades of turbines of other makes.
With strong technical support of the ultimate holding company, VIZ. TTL, along with its own resources, TSE has laid the foundation for a successful business model for the near future. The investment into machinery and plant has already started showing desired results, though still not to the full extend expected. The Company is hopeful of deriving the full benefit of the investments in the near future. During the year, our existing subsidiary in Africa received a large order from a power utility company in the SADC region for overhauling and maintenance of their fleet of utility turbines. This performance has encouraged the Company to pursue and focus on similar business, and we expect further orders of similar nature and value that can be executed in the next few years.
RISK MANAGEMENT POLICY AND INTERNAL FINANCIAL CONTROLS
Risk management within the Company is guided by Enterprise Risk Management (ERM) Framework & Policy, 2021. This is reviewed by the Risk Management Committee of the Company every six months, along with its implementation.
During the year, the Company focussed on competency development on risk management. An initiative to qualify a number of its key operational personnel as Certified Risk Management Professionals (CRMP) was one such measure.
The Company also identified areas for improving its risk management maturity over the next two years. Another area of focus for the Company is to leverage data and analytics for risk assessment and monitoring. Risks are monitored periodically with lagging and leading indicators. Effectiveness of control measures on identified risks is also monitored quantitatively.
Besides periodic assessment, management and monitoring of enterprise risks, the Company also assesses risks at individual order level and following similar risk management practices. Risk management for large, complex and nonstandard orders are given special treatment with review at various levels of management.
With continued focus on competency development and analytics in risk management, the Company is looking to improve its maturity level, thereby ensuring that business results are not affected by internal and external uncertainties.
| Identification of Major Risks | Description of the Risks | Risk Control Measures |
| Operational Risks | Loss of reputation, market share and/or profitability due to not meeting contractual conditions of orders. | Capacity addition in engineering, assembly and suppliers/sub- contractors capabilities is done over the year to meet increased volume of supplies. |
| Technology Risks | Loss of reputation, market share and/or profitability due to gap in specification expected by the market and product offered. | Dedicated technology programmes are undertaken for IPG and API turbines for developing models that fit into market requirements. |
| People Risks | Loss of reputation, market share and/or profitability due to not having adequate and competent personnel across functions to manage growing volumes and increasing customer expectations. | Gaps in key capabilities for accomplishing business goals are identified and missing capabilities are hired/acquired and on- boarded with high-priority. |
| Strategic Risks | Shrinking of market size due to slowdown in global growth, stress in financial sector in developed economies and growing geo- economic fragmentation. | Aggressively pursue market in developed economies with cost and service leadership for bigger share of shrinking market. Focus efforts on emerging economies that continue to grow at modest rate. |
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2024, IIFL Securities Ltd. All Rights Reserved
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ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.