Key Highlights

Order book position as on Mar 18 stood at Rs 2149 crore at consolidated level. At standalone level the order book stands at Rs 1482 crore as on Mar 18. Around Rs 400 crore of orders at standalone level are from project business.

The legacy orders still are there but their losses have come down from around Rs 80-100 crore a year to around Rs 40 crore in FY 18. These orders are mostly in irrigation sector. With election near the corner, hope the orders get completed.

The company continued to focus on product segment in water segment.

Power sector order booking was low due to sluggishness in thermal power projects. UMPPs are on hold due to environmental and other issues.

Small pump business was affected due to GST issues. New products launched in past couple of years helped the company to sail through. A total of 30 new products have been introduced and productionized during FY 18.

At standalone level

• net sales was up by 10% in FY 18. Sale or product business now constitute around 93% of total sales and grew by 16%, while project sales which account for around 7% of total sales, decreased by 8%.
• Exports account for around 7% of total sales.
• The company will dispatch projects only on confirmation of recovery of money.
• Gross margin was affected due to adverse product mix, higher raw material costs and lower sale of spares.
• Working capital borrowings reduced to Rs 118 crore from Rs 190 for FY 17.

At consolidated level,

-Net sales of overseas subsidiaries are up by 8% YoY to Rs 847 crore, however international subsidiaries made loss of Rs 40 crore as compared to Rs 45 crore in FY 17. Further improvement is expected going forward due to uptrend in global oil prices.

-Crude oil prices going up is good for the subsidiaries, as majorly its expertise is in offshore and onshore pumps. Margins in offshore is better than onshore. Due to lower crude oil prices, the sale of spare parts and order book per se were lower. Increase in oil prices would mean higher offtake, higher spare part sale and higher consumption demand leading to better margins.

-the company has 45% market share in offshare pump market in the world.

- Margins were best in FY 14 when the price of crude oil was at around US $120. Expects margins to improve but will take some more time before it reaches to those kind of margins.

KBL has presence in solar pumps sector. All orders executed only on immediate payment basis. The company is looking at government tenders.

In small pump segment difference with unorganised sector pre GST used to be around 30% that has come down to around 20% post GST and going forward this gap should further narrow down.

Rs 346 crore debt at consolidated level is largely working capital debt. Expects debt to come down going forward.