Power
Mech Projects hosted a conference call on Feb 2, 2022. In the conference call
the company was represented by S Kodandaramaiah, Director Business Development;
Rohit, VP Business Development and J Satish, CFO.
Key
takeaways of the conference call
Order
book of the company as end of Dec 31, 2021 stood at Rs 7497 crore with the
company having bagged orders worth Rs 1971 crore in 9mFY21.
On
including the large Rs 9294 crore MDO order that is executable over 25 years
the order intake for 9mFY21 was Rs 11265 crore and the order backlog was Rs
16791 crore.
The
current order book is well diversified with erection account for 27.7%, O&M
17.5%, electrical 1.8% and civil and other works about 52.9%. But including large MDO order the order
backlog mix is about 55.4% coming from mining, 23.6% from Civil & other
works, 12.4% from erection, 7.8% from O&M and 0.8% from electrical works.
In
terms of power and non-power, about 64.2% of the order book (excluding MDO
order) is from power sector and 35.8% is from non power. Further of the current order book about 10%
is export orders and balance 90% is domestic orders.
On
track of achieving guidance on all parameters. The company is confident of
achieving Rs 4000 crore plus order intake for FY22. The company have a L1 order
book of Rs 1500 crore including an large water project, Rs 230 crore of railway
project Rs 115 crore worth of FGD orders from BHEL. O&M orders worth about Rs 1000 crore are expected
in Q4Fy22.
The
company expect to close current fiscal with an order backlog (excluding MDO
order) of Rs 8800-9000 crore with order intake of Rs 4000 crore plus in FY22.
Considering
the fact of entering FY23 with strong order backlog, the company is confident
of crossing a STO of RS 3000 crore for FY23 and the margin is expected to go up
from 11.5% post Q2FY23. Some cost
related to Covid and Royalty Expenses (for PQ in Railway projects) etc are
expected to go out and that will improve the margin.
Not taking orders
less than 12.5-13.5% in case of new bids compared to current margin of 10-11.5%.
So till H1FY22 the margin will be in the
range of 11-12% as it will take alteast 3 quarters for the margin to improve.
Tax
rate will be 25% for current fiscal and next fiscal. But considering the
international projects the effective tax rate will be little lower at about 23.5-24%.
Capex
planned for current fiscal is Rs 25 crore and of that it have spent about Rs 15
crore in 9mFY22. Capex for next fiscal will be about Rs 35-40 crore.
The
MDO project is executed by 76% subsidiary so will be part of consolidation. Equity
infusion for this MDO project will be about Rs 25-30 crore this fiscal.
Expect
Railway and Water to account for about 10-12% and 10% of the revenue of the company
going forward.
Expect the NLC's 3*800
MW Talavera project order to get finalised next fiscal.
No immediate plans
to bid for power generation or development project.
In domestic market huge
investment is taking place with opportunity are coming in big-way in
infrastructure.
In civil the focus
of the company is water and rail.
The power sector
order backlog of Rs 4810 crore comprise largely of O&M and civil jobs. The pie of BHEL orders is on steady
decline.
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