Key takeaways of the call

Order book as end of Dec 31, 2018 stood at Rs 10787.0 crore up from Rs 7873.1 crore as end of March 31, 2018. Of the order book of Rs 10787 crore, about 43% (or Rs 4617.0 crore) were consultancy orders and 57% (or Rs 6170.0 crore) were turnkey orders.

Order intake in 9mFY19 was up by 181% to Rs 5786.3 crore [Consultancy domestic Rs 1396.2 crore, Consultancy – overseas Rs 84.9 crore, turnkey was Rs 4305.2 crore] from Rs 2057.1 crore [Consultancy domestic Rs 1282.7 crore, Consultancy – overseas Rs 294.7 crore, turnkey was Rs 1577.4 crore] in corresponding previous period. Order intake in Q3FY19 was down by 22% to Rs 90.8 crore of which consultancy order was Rs 77.8 crore.

Major order intake in 9mFY19 was Barmer- Rajasthan Refinery order that comprise Rs 1100 crore of consultancy order and Rs 4200 crore of turnkey order. Barmer-Rajasthan refinery order will start contribute to revenue only from FY21.

For FY19 the company expects to clock a turnkey turnover of about Rs 1100-1200 crore. Consultancy revenue for FY19 will be equal to that of FY18.

The company expects to register 15% growth in revenue for FY2020 with majority of the revenue coming from turnkey segment and consultancy accounting just about 7-10% of total sales.

The company expects a segment margin of 25-30% for consultancy and 5-6% for turnkey.

The Polypropylene Plant project of BPCL's Kochi Refinery and IOCL's Panipat Refinery Expansion is expected to get finalized in next 2-3 months. The company is favorably (L1) placed for both these projects. The company expects both to get awarded in Q4FY19 or one in Q4FY19 and another in Q1FY20.

The company is also favorably placed for one mid size overseas project for consultancy work. This overseas project is a green field project. This order is also likely to materialize in current fiscal or beginning of next fiscal.

Next year the company expects finalization of orders such as Numaligarh Refinery expansion [this year it got pipeline order from Numaligarh] order; Strategic reserves project at 2 locations one each in Odisha and Karnataka.

GAIL's Kakinada petrochemical project that was on hold right now may also get reviewed and can come next fiscal.

End of next year or beginning of a year next to that, the company expects awarding of Chennai Refinery order, followed by Cavery Basisn Refinery project at Nagapattinam, Bina Refinery expansion, Mangalore Refinery Expansion projects.

Expect order inflow to the tune of Rs 1800 crore for consultancy business next fiscal.

Currently the company is doing feasibility study for Cavery Basin Refinery at Nagapattinam and the order of it will come only in FY21.

No major write back is expected in FY19 and FY20 even though there will smaller one which will be immaterial.

Turnkey execution – If there is no major material the revenue will be lower for turnkey. So quarter over quarter variation will be there in revenue.