Key Highlights

Domestic revenue during the quarter stood at Rs 340 crore up by 14% YoY while exports grew by 97% to Rs 121 crore.

In June 18 quarter, Civil segment reported net sales of Rs 141 crore up by 60% due to higher construction work for Vishakhapatnam project which is a Rs 360 crore project., Erection segment reported net sales growth of 26% to Rs 181 crore largely due to strong international erection work, O&M saw a growth of 6% to Rs 133 crore.

Power accounted for around 70% of revenue and remaining was from non power which is in line with management's expectation.

Higher exports and better execution led to higher margins.

Strong traction of orders seen from Saudi Arabia, Bahrain and Oman apart from African countries like Nigeria along with neighbouring countries like Bangladesh.

Interest cost included some forex losses on foreign LC charges. Otherwise non power orders and international orders have better working capital terms.

Expects debt levels to remain around Mar 18 levels going forward. There may be some requirements of non fund based limits due to higher turnover.

The company received order inflow of around Rs 3600 crore till Aug 18 making total order book as on Aug 18 at around Rs 6400 crore which is the highest for the company in its history.

Expects to end FY19 with order book around current levels. Expecting another orders of around Rs 1500-1700 crore in remaining FY 19.

The company will cross Rs 4500 crore of order inflow for FY 19 as against earlier target of Rs 3500 crore.

Both at power and non power levels, total bidding opportunity of around Rs 10000 crore exists right now. This includes power orders including EPC business of around 6400 MW from BHEL, in AP, Odisha, Jharkhand, around Rs 1200 crore of opportunity from steel and refinery segment, and sanitation orders of around Rs 3000 crore both from power and non power plants including co gen plants.

The company has received around Rs 1300 crore of orders for building schools and other infrastructure from AP government on HAM (Hybrid annuity model) basis. This is funded by Central Government.

Being an AP company, the state government wanted a local company to undertake the prestigious contract. The terms of payment are very lucrative. 40% is given as upfront support from Central Government backed by Nabard, 10% as advance at 6.5% and rest the company has to manage.

PowerMech has kept an internal margin of around 25-30% in this project. So funding requirements and margins are very much in control of the company.

A separate SPV is formed for this project. Also one part of the contract is outsourced to a subcontractor on a back to back basis and other one the company is implementing on its own. The project has to get completed in 24 months.

Of the total order backlog Power would constitute around 65-68% of the order book and rest is form non power segment. Within Power, around Rs 2400 crore is mechanical and erection segment, Rs 1000 crore from O&M segment and around Rs 200 crore from electrical work.

Exports contract account for around Rs 1150 crore in the total order book.

No major capex aimed going forward.

Overall tax rate will come down at consolidated level, as tax rates in some of its African subsidiaries is lower than normal tax rate.

Expects net sales growth of around 25% for both FY 19 as well as FY 20 with better margins at operating levels.