Key takeaways of the call

Order backlog as end of Dec 2018 about Rs 755 crore and of which about 74% is systems, 16% transactional and 10% services. Transactional products refers to MCP, MVP (MTO references) & ENP.

Outside group (OG) order inflow was about 900 crore for 9mFY19 and Inside Group (IG) order inflow was about Rs 80-85 crore. In Q3FY19 OG order inflow was Rs 400 and IG order inflow was Rs 88 crore. Not experiencing any slowdown in order intake at the moment the pipeline is strong.

Employee restructuring in ETO [ETO here refers to MVP, MVE, MVT and MVS] targets downsizing manufacturing workforce by about 17-18%. The company looks to downsize about 190 people (including 120 dominant employee) and of which about 85% of employees is not part of company's rolls. The company expects to complete the workforce restructuring by end of March 2019 at both the plants. Exception item of Rs 19.4 crore in Q3FY19 is mainly consists of employee restructuring cost in ETO Plant.

OG sale was down by 19% in Q3FY19 and down 1% in 9mFY19. IG portion is about 17% of sales in Q3FY19.

Transactional sale is up by 18% in Q3FY19 and 22% in 9mFY19.

Sales for Q3FY19 and 9mFY19 was offset by one time export of Rs 50.5 crore to SL-BD last year & solution sales of Rs 28.6 crore in Q3FY19.

Services accounted 17% of 9mFY19 STO and it registered a growth of about 4% in 9mFY19.

The company always reviews it's order book and clean up the order backlog. In Q3FY19 also it did the same and order de-booked are largely from private sector after negotiating with the customer.

Government led investment has shifted from rural electrification to urban infrastructure upgrades. The company works on action plan to grow substation automation through system integrator.

Goals for 2019 are : 1) Grow Transactional; 2) Grow Automation; 3) Refocus from Electric Companies to Electro Intensive and Data Centers; 4) Optimize Power Systems and 5) More Services.

The company while transforming its business model as far as Electric companies with new approach such as selective via channels except smart offers in case of ETO, transactional products via partners etc., it is also refocusing from Electric Companies to Electro Intensive and Data Centers considering low margin levels due to L1 based decision making, very long payment period in electric companies and difficult to manage customers.

Profitable growth by Transactionalization and turnaround of power systems in line with Energy Rebound 2.0 guidelines.

New strategic measure and market action plan are to bring additional revenue to the extent of Euro 17-16 million on yearly basis

The company is successful in loading the plant. YTD numbers of the company reflects it and the improvement is on right direction. Plant utilization is around about 70-75%.

RM to sales leverage is restricted as the company is doing lot of contract manufacturing.