Key takeaways of the call

Order backlog as end of Oct 10, 2020 was approx. Rs 2663 crore (EPC Domestic Rs 621 crore; EPC exports 358 crore; EPC EHV Rs 562 crore, Domestic Institutional cables Rs 1026 crore; Exports 96 crore) down from Rs 2951 crore (EPC Domestic Rs 705 crore; EPC Exports Rs 389 crore; EPC EHV Rs 627 crore; Cables domestic institutional RS 1112 crore; cable exports Rs 118 crore) as end of July 31, 2020 and RS 3244 crore (EPC Rs 1233 crore; EPC EHV 731 crore; cables Domestic institutional Rs 1116 crore; Exports cables RS 164 crore) as end of Mar 31, 2020. The company largely maintained domestic cables institutional order book.

Domestic Wires & Cables (B2C/retail cables business) has done very well in Q2FY21 with improvement on sequential basis. In Domestic Wire and Cable business, the company have achieved 95.70% sales in Q2FY21 as compared to previous year same period. Overall in Wire and Cable business, the company have achieved 87% and 82% of sales in Q2FY21 and H1FY21 as compared to previous year same period.

The company is bullish about performance of the company's B2C business in 2021-2022. The company is increasing penetration in existing market where it has presence and get into unrepresented areas/markets by appointing new dealers. The total active working dealer of the Company as on Sep 30, 2020 was approximately 1600 Nos. The company is also increasing retail outlets attached to a dealer. Looking to take retail to about 40% of sales from about 30% in H1FY21.

In H1FY21 while institution accounts for about 51% of sales, retail about 30% and exports 19%.

Working on new retail products to be sold through same dealerships or other like-minded dealers. The work on new retail products are at initial stage and the company would be in a better position to give more details after 4-6 months.

In case of B2B business the company expects demand to come in in subsequent quarters with unlocking and gradual pick up of economic activity. Good demand is seen in case of construction of hospitals, metros and airports, modernization and expansion of chemicals/fertilizers plants etc.

Exports – The company is developing many new markets, but the efforts on that front was hampered/disturbed by COVID, as travel is still suspended.

EHV: Government efforts to convert Over Head transmission/power lines to under ground to trigger demand. The company expects the execution of Rs 148 crore 400 KV EHV order from TamilNadu EB will get executed in CY2021.

EPC: the company is now more focused on power T&D and is reducing focus on rural electrification projects.

Expect margin to be around 11% for FY21. Will try to improve on that.

Planned capex of the company is Rs 150 crore and that will be incurred in FY22. The company will do similar kind of capex for next 2-3 years.

Order book for cables & Wires will not be more than 3-4 months. Only EHV the order book will be of 5-8 months.

Finance cost for current fiscal will be in the same ratio of FY20.