Key takeaways of the call

Order book as end of Jun 30, 2018 was about Rs 18191 crore. Order intake in Q1FY19 was Rs 2748 crore and the company is currently L1 for orders worth Rs 3175 crore. The L1 order includes orders worth Rs 1000 crore from PGCIL.

Sales in Q1FY19 was up by 11.1% to Rs 2105 crore largely driven by non T&D business as T&D revenue was down by 14% to Rs 1277 crore. Considering GST impact, the sales on like to like basis grew by 18% in Q1FY19. EBITDA margin for the quarter stood at 10.3% compared to 9.3% in Q1FY18.

Lower T&D revenue in Q1FY19 was largely due to delay in translation of order into revenue as major part of FY18 order inflows had bulked up in late Q3 / Q4 as well as execution delay due to elections in certain states of India such as Karnataka as well as relatively higher monsoon disturbance than last year. Both domestic and international T&D business revenue has declined in Q1FY19. However the T&D revenue will surely pickup in balance period of current fiscal.

Railways & Civil: Growth story continues; Solar: Execution of the 130 MW APGENCO project is nearing completion; Cables: Higher export and HT cables revenues over.

Tenders floated by TBCB, PGCIL and SEB together have been quoted for project cost worth about Rs 5000 crore, which is expected to get finalized in next one quarter. Moreover RFQ was floated for some new TBCB projects and that order is expected to get finalized in another 3 months. Have to watch whether the finalization picks up in Q2 or Q3 of FY19.

Large TBCB orders are yet to be placed by private players in domestic market.

The company is confident of international order inflow as the company has put in strong bids and waiting for finalization of it. The company has put in bids for worth Rs 5000 crore in Bangladesh alone.

Given the current strong order book, the company is confident of achieving targeted growth metrics (15% growth in STO) for FY19.

Lower OE during Q1FY19 was due to forex gain. Forex impact was about Rs 20 crore. If Rupee depreciates further than Rs 68.50 against USD the company will gain otherwise not much of impact on account of forex.

Strong margin despite lower T&D revenue is largely due to improved margin on new businesses as well as forex gain which resulted in lower net other expenses. Margin of railways and civil and cables have seen improvement. The 100-125 bps improvement in EBITDA margin of railways. Also the overhead absorption well spread across the all business aided the margin improvement.

In current fiscal the interest cost as % of revenue will be maintained at FY18 levels.

The company will capitalize capital expenditure of about Rs 140-150 crore in FY19.

The company has got Rs 1000 crore orders in last 2 years from PGCIL and it's already L1 for order worth Rs 1000 crore from PGCIL. So the company is not worried by lower ordering of PGCIL.

Investments in Middle East are not yet towards productive assets. Slowly some tenders have floated in Saudi Arabia b UAE is still subdued. However the company has bagged Rs 400 crore of orders in ME region in Q1FY19. Lot of tenders is there in Africa, Far East as well as Bangladesh.

The company bagged Rs 4000 crore orders in railway segment and this year expects order worth Rs 5000 crore this fiscal. Railways order book is close to Rs 5000 crore.

Next year the company expects revenue of Rs 2200-2300 from Railway business.

Foreign currency debt was converted into rupee debt. Net receivables in us dollar has increase as there is reduction in forex debt.

Liquidity tightness in the market but the company is not facing crunch. The small vendors are feeling the heat and there for they could not be afford long payment cycle.

About Rs 300 crore of receivable due as of now from Saudi is getting delayed. Non receipt of collections from Saudi has increased debtors days by 2 days.

The number of participation is again increasing.

Rupee and foreign currency debt is about 60:40