Kalpataru Power Transmission hosted a conference call on Feb 14, 2022. In the conference call the company was represented by Manish Mohnot, Managing Director. 

Key takeaways of the call

Standalone order backlog (Including Linjemontage, Sweden & Fasttel, Brazil) as end of Dec 2021 stood at Rs.12,646 Crores as on 31 Dec 2021 with order inflow till date in current fiscal stand at Rs 4364 crore including Rs 1498 crore in H1FY22, Rs 2063 crore in Q3FY22 and Rs 803 crore in Q4FY22 till date.  Order inflow was largely driven by orders in T&D business. L1 order book of the company was about RS 4000 crore and expect that to firm orders by next month.  About 80% of L1 order book is from T&D international.

Consolidated Order Book as on 31 Dec 2021stood at Rs.31,702 Crores[domestic 68%, international 32%] [urban infra/water 31%, T&D 24%, B&F 30%, railways 9%, O&G 6%]with the company receive orders worth Rs 14348 crore till date in FY22. In addition the company have L1 orders worth Rs.5,300 Crore (KPTL = Rs 4,000 crore and JMC Rs 1,300 crore).

Standalone revenue declined in Q3FY21 largely due to: (1) Strategic shift in dispatches; and (2) Lower order inflows in first half of FY22.

Strategic shift in despatches is on account of two factors. Firstly freight price and availability of containers become challenge and customers have extended the delivery period. This is the major reason for strategic shift in Q3FY22.  Secondly the company has shifted the delivery in certain EPC projects to cash on the commodity cycle at right time but the impact of it in Q3FY22 is not much.   Not many delays in domestic projects.

Consolidated revenue growth driven by healthy momentum in project execution in B&F, Water and international T&D subsidiaries.

Revenue of Linjemontage (Sweden) of Rs.364 Crores and Fasttel (Brazil) of Rs.139 Crores in Q3FY22

Exceptional Items in Q3FY22 consolidated financials include: (1) Gain on sale of KMTL of Rs.262 Crores; (2) Value of fixed assets of Shree Shubham Logistics Ltd. (SSLL) written down by Rs.22 Crores; and (3) An amount aggregating of Rs.86 Crores for shortfall in termination payment and expected credit loss for Kurukshetra Expressway Private Ltd. (KEPL).

The company expect a consolidated OI of Rs  20000 crore for FY22 with about Rs 8000 crore from KPTL and Rs 12000 crore from JMC.   Order inflow guidance of KPTL is reduced to Rs 8000 crore from Rs 9000 crore.  Standalone order inflow target for FY2023 is expected to be at Rs 6,000 crore-7000 crore.

The pledge of shares has not come down as earlier expected. It expects the pledge to come down gradually over three quarters of FY2023.

Things are looking much better for next fiscal considering strong order book for standalone KPTL. But there could be some degrowth in revenue for current fiscal.    

International T&D front the company have started bidding for WB orders and visibility is strong. Domestic transmission Visibility improved in last 90 days with both state and central government PSUs float lot of tenders and awardings.  Transmission domestic will get good OI and order book going forward.

FY22 EBITDA is more difficult to project given uncertainty in prices of commodities, but right now what it look at is 9-10%. And once uncertainty goes off it will be looking at double digit EBITDA margin for the company.

The company have declared lot of investments as non-core including development projects in transmission and road sector. Road one exited and one looking to divest.  Indore project is near completed 45% is sold and all sales are to happen in by fy23.  The Subham Logistics is also declared as non-core.   Strategic perspective technically non-core is expected to get divested by next 24 months.

Indore Real Estate project investment of Rs 300 crore will be get back in next 12-15 months.

Expect debt to gradually come down in next 4-5 quarters. Keeping debt at minimum level by March 2023. 

Oil & gas segment – start seeing traction in tenders coming from all large PSUs.  In the international O&G markets the company have qualified and submitted bids at international level but not yet successful and expects to some order intake going forward.

Railway – have healthy orders to support for 18-20 months of delivery. Looking at rebuilding orders book. Looking at some tenders in international railway orders especially in Africa.

The company will get into growth mode next fiscal on standalone as the order awarding visibility has improved in transmission sector (from earlier delayed to pick up in ) as well as O&G.

Fixed price order book is 70% for standalone KPTL.