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2026.09.30 | TB | Power | CG Power: Transformer Competitiveness & GTM

原标题：CG Power – Transformer Portfolio Competitiveness & Go-to-market Strategy

#power #industrials

Third Bridge · 2026-09-30

Analyst-led • 14 Sep 2026

Companies: CGPOWER IN, SCHNEIDER IN, ENRIN IN, POWERINDIA IN, GEV US, 532928 IN

Suchint Kr Thareja (SKT) Senior General Manager, Sales & Marketing at Voltamp Transformers Ltd

Jet Woo (JW) — Third Bridge Sector Analyst

Agenda

Key Insights

Introduction

JW [00:00:09]: Welcome to Third Bridge's Interview entitled CG Power – Transformer Portfolio Competitiveness & Go-to-market Strategy. I am Jet Woo, and I will be facilitating today's Interview with Mr Suchint Kr Thareja, former Regional Product Head of Transformers for Sales Network for North India at CG Power and Industrial Solutions Ltd.

Suchint, before we start today's Interview, please state I agree or I disagree to the following statement: You understand the definition of material non-public information and agree not to disclose any such information, or any other information which is confidential, during this Interview.

SKT [00:00:58]: I agree.

JW [00:01:00]: Could you please begin with a one-minute introduction to your background?

SKT [00:01:08]: I'm Suchint Kr Thareja, and I am taking care of marketing, B2B transformers. I have been in this industry for the past 21-plus years. I've got an experience in multiple functions in transformer industry, India as well as globally. Today, I thank for selecting me for this discussion. That's it from my side.

Questions

00:01:44] In Q1 FY27, CG Power management announced that the Power segment order backlog was INR 14,434 crore, up 14% QoQ. How much of this backlog do you believe is attributable to transformer sales?

SKT [00:02:12]: Approximately 65% is to transformers.

JW [00:02:21]: How would you break down the 65% across voltage classes or end-customer applications?

SKT [00:02:32]: Basically, in 65%, approximately 40% is for 400kV and 765kV power transformers. The balance would be in up to 220kV. That's about distribution and they have two transformer factory as of now, in Bhopal and another one is in Gwalior. Gwalior factory caters up to 220kV transformers. Bhopal factory is catering 400kV and 765kV.

00:03:04] What do you believe is driving the order book growth within the specific voltage categories at CG Power that you mentioned?

SKT [00:03:14]: Basically, if we talk about India, this 65% of power transformer I talked about, out of which around 60% is for domestic business only. In that 60%, the major demand and the order booking is from PGCIL, which is the national PSUs. In 400kV, 765kV because CG is present in this segment is for more than 1.5 decades, so they are very well positioned in terms of their credentials, their supplies. They are a very reputed brand in India to manufacture this particular range of transformers as well as reactor.

JW [00:04:07]: What about the export business? You mentioned that 40% of the order book is for exports.

SKT [00:04:17]: No, out of 65%, I said that around 60% of the business is Indian only and 5% is for export. In 60% remaining, the 765kV and 400kV transformers reactors caters to about 40%.

00:04:40] Looking at domestic demand, how would you break down CG Power's order book across regions?

SKT [00:04:52]: Basically, PGCIL is a national grid so that is pan-India basis. I would say that maximum order book they have is from PGCIL as on date, around balance 40%, around 30% is only from PGCIL. Rest 10%, they have some state electricity boards or NTPC order, which they have recently booked in.

00:05:22] Do you see any specific bottlenecks for CG Power in converting its order book into revenue?

SKT [00:05:41]: There are a couple. Now CEA, which is a Central Electricity Authority in India, they have mandated that effective August 2027 onwards, 765kV transformers are to be short-circuited. Right now, CG doesn't have that credential with them. Having this kind of a heavy order booking, they will have to carry out this short-circuit test. That is (1). (2) In 400kV transformers, their transformer has failed, they need to carry out a short-circuit test of 400kV so that this order booking, they can easily execute it. Right now, CEA is emphasising that any transformer manufacturer should have a short circuit test before supply. What has happened since they have done the order booking, but with that order booking, before supplying it, they need to carry out the short-circuit test.

00:06:56] Are there any other bottlenecks for CG Power besides short-circuit testing, perhaps in terms of the supply chain?

SKT [00:07:47]: I was mentioning that in terms of supply chain, so today, what is happening that transformer manufacturers in India, they are heavily dependent on imports of raw material like CRGO and copper. That has remained to be a bottleneck for CG Power as well. Their dependability on import is significantly high. Secondly, in Bhopal territory, they need to develop a couple of ancillary vendors, the processors who can… Right now, some of the material they need to take it far from state of Gujarat being placed in MP. That transportation cost also gets added to it. Thirdly, they need to emphasise a lot in developing their design team because over the years, they have developed their capability in having a same set of standard designs of 400kV and 765kV. Their dependability on 400kV and 765kV is significantly high. However, if there are demand per se coming in from export market or from any other national utilities, wherein the design would be different, there they need to develop a capability of their designers. These are the couple of pointers I'm having.

00:09:27] What do you think are the challenges involved in qualifying for or successfully passing the short-circuit test?

SKT [00:09:53]: It is very difficult to say because in transformers, if a transformer is not passing through a short-circuit test, there can be various reasons. One can be manpower skills. Second can be design. I did mention about improving their design capabilities because they have been making the same design over the years. Now if there is any changes in the design, if they do not have much of a capability in design, then the chances of failures are very high. Any transformer, which is not passing through the short-circuit test, this means it is having some design problem or there is a problem related to the assembly or manufacturing.

JW [00:10:44]: Are you saying that, historically, CG Power's transformers haven't undergone any significant design changes?

SKT [00:10:53]: Absolutely.

00:10:57] Looking at the 400kV and 765kV range of transformers, how do CG Power's offerings compare with those of international players in terms of pricing, reliability, order intake, etc?

SKT [00:11:33]: In terms of reliability, CG makes a reliable transformer. Coming on to the pricing, basically, they have a very good advantage because CG and transformers, the bushings, they are a manufacturer of bushings. Those bushings are utilised in their own transformers. That is an advantage to them. Secondly, in terms of pricing also, they become very competitive as compared to international players like Hitachi, Siemens or Toshiba for a matter of time. That way in terms of… Reliability, I have already mentioned. In terms of lead time, because of the supply chain issues, they do struggle in terms of a lead time because today, the demand of transformer is very high. If any manufacturer has got a very good ecosystem in terms of supply chain development of vendors, then there is an edge. I feel that in CG Power, they need to develop that vendor base so that they can focus a lot on lead time.

00:12:52] How does CG Power's current lead time compare with that of the competitors you mentioned earlier?

SKT [00:13:04]: If I talk about international MNCs like Hitachi and Siemens, they are very well within the contractual delivery timelines. CG Power because of the heavy order booking as of now and the supply chain, they are lagging behind in terms of timely delivery. However, it is not 100% of the time. I would say, about 60-70% of the time only they are able to meet the targets. The balance 30-40% is something which is they need to improve upon.

JW [00:13:49]: Does it mean that, for the 30-40%, CG Power is required to pay a penalty?

SKT [00:13:57]: Basically, it's not necessarily they have to pay penalty because what happens that a transmission project when it is built up, sometimes there are delays from the perspective of which are… I mean to say like a transmission line is to be built up. If transmission line hasn't come and even the transformers are delivered, but the transformers are supplied and after supply also transmission lines got delayed, which is not in the scope of CG Power. In that case, although the transformer supply was delayed, but it has not impacted as such on the timeline or it has not caused any as such loss to the employer. In that case, the time extensions are being provided, and that doesn't lead to any financial losses to the manufacturer.

00:14:55] How would you describe CG Power's go-to-market strategy for its transformer portfolio?

SKT [00:15:10]: Right now, they are focusing a lot on one CG. What they are doing is they are trying to club their different products under one umbrella. They are manufacturer of EHV, switchgears, medium voltage switchgears, GIS, bushings, transformers. They are trying to position themselves right now by offering the complete product baskets what they have. That is the one strategy on which their focus is more. Now another aspect is since CG Power is a very, I would say, more than eight decades old organisation in India. For them, their credentials are very, very high. The quality of the product is also so good. Only thing is that because of these two impacts, their products, their name is almost approved in all the projects. That is an advantage to them. Their emphasis right now is to ensure that the transformers are supplied well within the timeframe.

00:16:29] Comparing CG Power with other companies that have a large portfolio of products, such as Siemens or Schneider, how would you compare their product portfolios in terms of completeness, pricing and interoperability?

SKT [00:17:07]: Basically, if we compare CG Power with Siemens or Hitachi or for the matter Schneider, basically, the technology-wise, in terms of Schneider, Hitachi and Siemens, they have a good automation products, which CG Power is not having, number one. If we talk only about products like transformer, switchgear, they have a good… What they are doing is they are doing a volume business. They have a huge capacities with them. The capacity utilisation of the plant is quite good. Thereby, they are capturing the market share. Whereas if we go to Hitachi or Siemens, they have a limited manufacturing capacity, and they focus on the niche segment wherein they get a good price margin within India. Like-to-like, they don't get into it. CG Power, their focus is more on the volume. and thereby generating profitability for the organisation, whereas Hitachi and Siemens, they don't focus much on the volume, they focus on the profitability. That's the major difference between the two. If we compare on the pricing part, definitely, Siemens will be having the highest pricing of a transformer as compared to Hitachi and then to CG.

JW [00:18:48]: How much of a discount would you say CG's transformers are priced at relative to Siemens?

SKT [00:18:59]: I would say between CG, suppose if I hypothetically if I say 500MB, 400kV transformer. The price difference between CG and Siemens would be about 20%. There is another aspect which I would like to add upon in this discussion because what is happening, these MNCs, they need to pass on their profitability, their margins to their parent organisation. However, in CG Power, that is not the case. Therefore, the overheads of these MNCs are also high as compared to CG. That can be one of the aspect of being low on the prices.

00:19:48] How successful would you say CG Power is at packaging its portfolio of power equipment together to secure deals? You mentioned that this is the company's current go-to-market strategy.

SKT [00:20:10]: This particular strategy, they have started two years back because prior to that, they were focusing on individual product shares enhancing the market share of individual product. Now their focus is more on combining the packages. Having said this, if you talk about SCADA, if you talk about automation, they don't have expertise in that and they are still dependent on Schneider or Siemens or Hitachi or maybe Honeywell. That is the only area that is a grey area for them. Otherwise, if they are having an automation product with them, then they can better beat this segment as a complete package.

00:21:11] We've spoken about the multinational corporation competitors. How does CG Power compare with domestic players such as Taril?

SKT [00:21:28]: CG Power is definitely better placed as compared to Taril. If we look at the financials which are available in public domain, so CG carries a better reputation towards their vendor partners in terms of timely payments. In terms of deliverables also, they carry a better positioning as compared to Taril because if you look at the trade payable of Taril, which is there in the public domain is significantly higher vis-à-vis to their top line. Probably, I think it is around 20% of their top line compared with the top line. Whereas if you look at CG Power as a whole, their trade payable would be around 10%, 10-11%. That is another aspect which can be talked about in terms of healthiness or it can be looked at from a culture of the organisation that they are more focused on developing their vendors, taking care of the interest of them. That is one aspect. Then in terms of timelines, delivery timelines, I would say that CG Power is better placed as compared to Taril.

JW [00:22:53]: What about other domestic competitors, such as Atlanta Electricals?

SKT [00:23:04]: Atlanta Electricals, they do not have 400kV, 765kV product as such right now. Although Atlanta Electricals, they have their plant in place for both these ratings, but they are lagging in terms of pre-qualification criteria. For them to come up to this level will take time. Because they have the product, they need to first have an order, then the product has to undergo a type testing and then they can do it as the competition. Right now, Atlanta is not in the competition for CG.

00:23:48] How do you expect the prices of 400kV and 765kV transformers to trend over the next 1-3 years?

SKT [00:24:10]: Basically, in the 400kV, marketing is going to be cluttered. Already, there are 7-8 manufacturers in the country and another seven manufacturers are going to come up, onboarded in six months of timeframe. Country would be having about 14-15 manufacturers manufacturing 400kV transformers. In 765kV, I think the scenario would take a little more time. Probably in two years' time, I see that 3-4 names would be added in 765kV. That development manufacturers have already declared that they are entering into the higher voltage class manufacturing. In two years of time, I think as far as whatever is the order backlog CG Power is having, I don't see that there is any challenge for next 2-3 years to CG Power. Post that, I think in 400kV, definitely after, I would say that about two years of time, there's going to be a huge competition to Taril or to CG Power, to Toshiba, it's my opinion, it's going to be very cluttered.

00:25:42] If the market is essentially doubling in terms of the number of manufacturers for 400kV transformers, how significant do you think the impact on transformer prices will be?

SKT [00:26:02]: It's a very good question, I must say, because the transformer pricing today, it all depends on the imported material like CRG or copper. Now we have seen that after west Asia crisis, we have seen that the oil has also surged significantly. What is happening that with CG Power and with all these players coming in and since the demand is already there, at the same time, the suppliers are going to be more and suppliers will have tremendous pressure to develop ecosystem with their supplier vendors. I see that this price is going to go down. Probably today, I see there is a downfall of about 20%, 15-20% easily in next one-year timeframe despite the fact that the raw material commodity remains to be on the higher side. This is an impact which I can see because today, what has happened that Indian manufacturers, they have gone all out in terms of carrying out the expansions. Those manufacturers, those who are having credibility, they have already declared their manufacturing plant expansions, for them, competition will not do much, but those players who do not have the credentials, there will be a lot of pressure on them to meet up to that level.

At the same time, since country demand is there, so there will be a lot of government initiatives to promote the new powers as well. All these factors are going to create a pressure on the regular manufacturers of 400kV and 765kV. That pressure, I would say that is going to build up again and again. In next one year of time, you'll see that they will have to focus a lot in terms of the supply chain management and other factors to create a differentiation of their product.

00:28:25] You mentioned that, in the 765kV segment, there will be an additional 3-4 names added over the next 1-2 years. How many players are currently qualified in this space?

SKT [00:28:42]: In 765kV, there is Hitachi, there is Siemens, there is Toshiba, there is GE, then there is BHEL, there is TNR and CG. Combined together, there are total seven names right now. Now the players who have announced entry into 765kV is Atlanta Technical Associates, Shirdi Sai Electrical. These are the three names which they have already announced it. I think there are a couple of more names, but they have not announced it in public domain, so I would not be mentioning there. Apart from these three, you can add two more names who will be adding up into 765kV. Combined together, there will be around 12 names in this segment. This is all going to happen in another one year's timeframe.

00:29:58] In terms of pricing for 765kV transformers, do you expect a similar price trend relative to 400kV transformers?

SKT [00:30:11]: No. In 765kV, first of all, the new entrants will have to perform a short-circuit test. That is one. Secondly, 765kV is not going to be a cluttered market as we are seeing it. I don't see there is going to be much of a challenge in 765kV to CG Power.

JW [00:30:43]: Are you not expecting a negative trend in terms of pricing?

SKT [00:30:52]: No, 75kV, I don't see there is going to be much of a dip in terms of pricing because that market is not going to be much cluttered as compared to 400kV.

JW [00:31:05]: Do you expect them to remain intact?

SKT [00:31:08]: Yes, margins are going to remain intact for next at least 2-3 years. Three years, we'll have to see how the country turns around. In 765kV maybe next three years, the margin point of view, I don't see any challenge.

00:31:23] You mentioned that a lot of transformer manufacturers are expanding their capacity and backward-integrating. I understand that CG Power has in-house bushing manufacturing capabilities for certain required components, such as RIP [resin impregnated paper] and OIP [oil impregnated paper] bushings. How significant is this relative to players that depend on imported bushings?

SKT [00:32:23]: Definitely, that's the cutting edge which CG Power has fought. I think in India, as we talk about, so one name is Hitachi. CG Power definitely has got an edge because they have got a better control of the bushing. Today, the rest of the other manufacturers, they have to be dependent on other make supplier. That remains to be a good advantage to CG Power by having bushing as a manufacturer. Otherwise, if we look at in backward integration, although in public domain, few of the manufacturers have talked about backward integration. If we look at the transformer being a very complex product, so there are many manufacturers who dropped their idea of getting into the backward integration because that's not the core of their business. They prefer to develop their vendor partners, the supply chain ecosystem through which by having some, I would say, exclusivity contracts with the suppliers. That business models are better working as compared to having a backward integration.

Few of the manufacturers, they announced it and later on, they realised that it is not what to do. Much of backward integration is also not healthy because ultimately, the core business remains in delivering the transformer in time, being provided reliable product within the given timeframe. and needs to be profitable at the end of the day. That is more important.

00:34:24] Given that CG Power and its competitors are expanding their capacity and bidding aggressively, what do you believe the company's market share in the 400kV and 765kV markets will look like over the next 1-3 years?

SKT [00:34:49]: Basically, it's related to capacity expansion of CG Power, you mean to say?

JW [00:34:55]: Yes.

SKT [00:35:13]: Basically, in 400kV, the market share, as I mentioned that already 6-7 manufacturers are going to enter into 400kV. I said about three have already declared and two more are to be joining in 765kV. Five in 765kV and 7-8 in 400kV. Definitely, the market share is going to impact. That is going to impact because at the same time, the demand of the country is high. I see that in 400kV, next two years' time, I don't see any challenge to CG Power for 400kV. For three years' time, I see that 765kV, no more challenge. After that, we can see there is some sort of a dip in terms of market share because the competition is going to increase a lot. That is going to be impacted.

JW [00:36:14]: Is this market share by production capacity or by revenue?

SKT [00:36:20]: This is in terms of revenue I'm talking about, not in terms of capacity.

00:36:27] When bidding against competitors for large utility tenders, what do you believe is CG Power's advantage? You mentioned that the majority of its portfolio comes from PGCIL [Power Grid Corp of India Ltd].

SKT [00:36:51]: Basically, the best advantage with them is pricing and right now, there was one grey area, which CG Power has worked out. The grey area earlier was that there was no inter-divisional coordination, but now they are working on go-to-market strategy by combining their product baskets as a one solution. That is taking care of it. That will also give them an advantage and better lead time and providing a one-stop solution to the user. That is going to be an advantage to them. Even if I talk about, say, that country is seeing a lot of renewable generation and the large EPC player or a renewable source developer would prefer to have buying from single source wherein they get complete product basket and get one solution depending on different products. If delivery timelines are not matching, then only they will prefer to split the order between gears and transformers.

00:38:12] How strong is CG Power's ability to integrate components from other players, if you were to take the company's transformers and pair them with somebody else's switchgear, for example?

SKT [00:38:32]: In terms of compatibility, it's because the design is very standard, so there isn't any issue as such. Because these transformers, the life of these transformers are more than 20-plus years. What happens that almost all the designs, the accessories, bushings or radiators, all accessories have been standardised in such a way that it can be fit into in any design. Even if the transformer of Siemens is there, it can have the accessories of other makes as well because it is standardised.

JW [00:39:20]: Is there no necessary edge to having better integration with other players' components?

SKT [00:39:28]: No.

00:39:34] In Q1 FY27, management mentioned that CG Power's transformer capacity is expected to expand by 45,000MVA over 12-14 months, with the first phase of 10,000MVA expected in the first quarter. What do you believe are the potential challenges in scaling up this new capacity?

SKT [00:40:11]: Basically, last week only, they have announced that the new facility it's ready partly. The number one challenge, I would say that the transformer as per CEA guideline, any manufacturer has to ensure type testing of a transformer from the same plant of manufacturing, which CEA has been repeatedly emphasising upon. CG Power whatever transformer they deliver, they need to carry out type testing of that transformer, short-circuit test from that transformer from that plant. That is the first challenge they are going to have. Otherwise, second thing would be that they will be having 45,000MVA capacity in place, so the capacity utilisation because their product will not be type tested, although they have supplied… They must be having a type test of their other factories. Government currently is not providing any relaxation in this context. They need to carry out a type test for this plant, new plant. They will be having a challenge of producing a lower range especially in the private sectors wherein they do not ask. In government sector, definitely, they will be demanding these type tested from the same plant. Initial years, they will have to focus on private segments wherein there are no such stringent requirements are there. Thereby, they might also end up in having a very low capacity utilisation till the time they build up this capability.

JW [00:42:08]: The main challenges for this new capacity are type testing as well as circuit testing. Is that correct?

SKT [00:42:19]: Yes.

00:42:21] Looking at the current capacity in the market, what do you believe CG Power's utilisation rate is likely to be right now, given that demand in the market is so strong?

SKT [00:42:37]: Right now, it is very good. The capacity utilisation would be somewhere around 75-80% around rate because not many players are there as of now in the country. I think another one year or two when there will be more manufacturer, then they will have to trade. I'm sure the management will be taking care of that part. Right now, as of now, for this one-year time, I don't see there is any challenge as such in terms of ensuring a good capacity utilisation because their order backlog is already high, and they will have to just focus on the product capability in terms of short-circuit test and then they can mitigate those challenges.

00:43:35] How do you believe the gross margins for CG Power's additional capacity will compare with those of its existing capacity?

SKT [00:43:55]: The new facility initially during the start-up time, there will be… Since the scalability of the new facility will not be high because of this capability issue. If we say that CG Power right now is having about 16-18% EBITDA-level margin, I see that that is going to continue with the same. With the new facility when it comes up with the private player, if they focus more on the private segments or in the data centre segment, there they can have a better margin. Of course, the capacity is very high and producing a low transformer because data centre market, they cater usually 220kV transformers. That 220kV market share, if they can cater it, they can get the better margins. Suppose if they keep on depending themselves only on 400kV and 765kV, what they have been doing, then in that scenario, starting, there will be challenges in terms of low capacity utilisation, low margins definitely will be there or alternatively, if they have to improve the capacity utilisation, alternatively, they will have to focus more on export. There, they can have better margins.

00:45:31] How would you compare the pricing of Indian transformers in export markets with that of other major producers, such as China?

SKT [00:45:58]: Indian manufacturers are definitely price competitive. The only challenge is in terms of geographical location that there are transportation time. Transportation is very high from Indian origin, that is the only impact. Otherwise, what I see that in a couple of years, we are seeing that there will be JSW and JFE are going to start the manufacturing of CRGO in India. That is really going to boost a lot in terms of the consumption of CRGO from India. That is going to be even cheaper than the current scenario. In that scenario, the Indian manufacturers definitely will be able to mitigate this transportation disadvantage what they have got. Otherwise, if I talk about bushing as well, what we have seen so far is that in India, in these 400kV and 765kV, CEA has mandated usage of resin-impregnated bushings. Those bushings are so far being only assembled in India, but the core are being imported from outside. For example, Massa Izolyator Mehru, they have a JV. What is happening that Massa from Russia, they are exporting their core of the bushings to Mehru and Mehru is manufacturing it in India and thereby making these resin-impregnated bushings available in India.

Now similarly, Yash Highvoltage is another one who are getting the core from their Switzerland-based counterpart, MGC and thereby assembling it. Now what is happening because of the demand going high, these players have started working on the development of core within India. I think very shortly, we will see that complete bushings will be manufactured in India. Now that is another aspect because today, what is happening, one is the lead time of these resin-impregnated bushing because imported bushing lead times are right from 12-18 months for 400kV class. If it is getting manufactured in India, this lead time will definitely go down. What is happening today, the lead time of the bushing is more than the lead time of manufacturing of transformer. In terms of price-wise, you will see that bushing contributes hardly 1-2% or rather maximum 3% of the price of a transformer. The lead time of the bushing is very, very high as compared to lead time of manufacturing of transformers.

This scenario, it is restricting Indian manufacturers to play a significant role in export. I think once bushings or CRGO being taken care of, then the ease of doing export business for Indian manufacturer will be much, much higher, and they will be price competitive as well. There is another commodity like insulation that so far, so good, there has been not much of challenge so far. If that is also being added in Indian manufacturing portfolio, then that can give further advantage to Indian manufacturer to be price competitive and beat even China.

00:49:59] Do you think the domestic Indian market can absorb the new transformer manufacturing capacity coming from all the major players that are expanding and qualifying, or do you think the export market will be required to offset this additional supply?

SKT [00:50:36]: Right now, I think, as I said, that 400kV, 765kV market is already going to be cluttered, so in terms of return on investment for any new manufacturer from outside to come in and setting up the plant in India doesn't make it viable option. Yes, an organic acquisitions can also be thought of, that is a fair idea that can help them to gauge the market share and enhance their footprint in India. That is the option which remains to be open for overseas players. If any overseas player has to come in India, it's going to be very, very challenging for them.

00:51:26] In terms of Indian players and the current players in India exporting outside the country, which geographic markets do you think will be attractive? Would it be the Middle East, the US or Europe?

SKT [00:51:50]: I see that there is going to be a huge, huge potential in US, even in Europe because in European market, what I see that the dependability on renewable sources are more high. The existing grids are already reaching to an ageing level. They are gradually rehabilitating or upgrading their current existing grids. The demand of transformers are going to be very, very high in Europe as well as in the USA. Only thing is that these couple of advantages if Indian manufacturers can get in terms of supply chain control or by having dependability on in-house in Indian manufactured components, that will give a good price advantage to them, and that will also impact on the margins as well.

00:52:54] How do you believe CG Power's current management is navigating the transformer market? Do you agree with the company's capacity expansion strategy?

SKT [00:53:23]: It's quite evident that because they have declared not only expansions, they have also declared greenfield plant. Definitely, they must be having some strategy in place in terms of loading their new facility. These are some sort of challenges, which I have already mentioned during this discussion which are to be mitigated by them on immediate basis so that they can enhance and improve the capacity utilisation ASAP. Because today, of course, that CG Power, their positioning has been good over the years in India and valuation of their brand is very, very high. Therefore, for them to come up and acceptability of their product is quite good because they have been manufacturing transformers and the end user will always prefer to have a reliable and reasonable product. From that perspective, their current management would have thought of expanding the capacities. I think the methodology for them to enter into a different segment, which they have not yet announced so far in public domain, like HVDC or STATCOM, these are the areas.

There are very few manufacturers in India who are making… Right now, Siemens, Hitachi and GE, they are only three players who are into HVDC and STATCOM technologies. Also the demand for those transformers are high. Probably the current management would have thought of entering into those segments because if they enter because that segment is going to grow for next 5-10 years' time. Another aspect is that we really don't know probably there are already discussions going on that to uplift this voltage class from 765kV to 1,200kV. Probably the new facility would be focusing on the higher range, which will help them to get into the 1,200kV segment as well.

JW [00:56:03]: Do you believe that CG Power is positioning itself to enter the HVDC [high-voltage direct current] segment as well?

SKT [00:56:13]: Yes. I'm not sure about HVDC [CG Power] entering into HVDC or STATCOM segment, but yes, for 1,200kV, they have already specified in a couple of forums, so that is there.

00:56:28] What do you believe is CG Power's North Star? How does this translate into the company's decision-making strategy, whether in terms of backward integration or capacity expansion?

SKT [00:56:49]: Not exactly in terms of backward integration because they believe in getting into the product and penetrating the market with their presence. It's absolutely not in terms of backward integration because as I said, that a couple of manufacturers thought of getting into backward integration, but in transformer manufacturing, it's very critical. It's not so easy to have a control on the backward integration operations like cutting off CRGO until unless if there is any financial benefit that organisation has got. For an example, in our country, we see Toshiba T&D. They are doing a backward integration. They manufacture radiator, transformer tank in-house, carry out, they do have a core-cutting facility in-house. They have a better advantage because in Japan, they must be having a tie-up in terms of sourcing of CRGO. That's the advantage they are having it and they are carrying out in India and giving them benefits. That is not applicable for CG Power or for any other manufacturer.

Definitely, backward integration is not the strategy. They are thinking about enhancing their capability from 765kV to 1,200kV, thereby penetrating the market, enhancing and then catering to reduce their lead time of transformers as well as reactor so that they can have a better edge over any other manufacturer. Another thing is when we talk about transformers, they have a better control on bushings. The failure rate of their CG bushings are quite negligible. Therefore, they play a very vital role in terms of integrating their bushing business with the transformers.

JW [00:58:54]: Is there anything else you would like to add regarding CG Power?

SKT [00:59:06]: No. I think if you have any other query or if I could not answer any of your queries or you need a little more elaboration from my side, then I can definitely add value.

JW [00:59:22]: I think that is all for today's session. Thank you so much for your insights. I really appreciate the informative session.

SKT [00:59:36]: Thank you so much. Pleasure is all mine. Have a nice day.

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