Key takeaways of the conference call

Order intake in FY13 was Rs 754 crore [Manufacturing Rs 325 crore; EPC Rs 346 crore; Projects Rs 83.13 crore] compared to Rs 522 crore in FY12 translating into a growth of 44%.

Total order backlog as end of March 31, 2013 stood at Rs 676.3 crore. Of which manufacturing order book as end of March 31, 2013 was at about Rs 263.2 crore [Domestic:Exports=62:38], the EPC order book was Rs 361.3 crore [100% domestic] and the project orders are at Rs 51.9 crore[98% exports & 2% exports).

Seeing some positives going into FY14, including the recent sharp rise in order intake; recovery in manufacturing business visibility from overseas markets – both direct and through OEMs; stronger pipeline of domestic business enquiries for both EPC and manufacturing; expansion in the EPC order book to be executed over FY14 and FY15; significant cost benefits in TG Island business from the weak Yen; strong cash position to be used for financing expansion in manufacturing capacity; and benefits accruing from cost containment initiatives.

Manufacturing revenue (prior to intersegment & inter-company eliminations) is expected to recover to FY12 levels of about Rs 411 crore. Expects revenue weakness in H1FY14 but the manufacturing operations running strong to full capacity in second half and continuing that into FY15 as well.

Revenues from projects business will be significantly lower due to poor order booking last year caused by a very strong Yen.

DFPS, a subsidiary which operates the EPC business of the company will see revenue visibility once the implementation timelines of recent order inflow becomes clearer. Given strong EPC order the company is confident of better times ahead for the EPC business as well.

On the back of weakness of yen on consolidating Japanese company, the translation loss was Rs 7.3 crore for FY13 and that for Q4FY13 was about Rs 2.6 crore.

In domestic market the company is getting strong traction from diesel engine generator along with hydro generators but the steam generators is seeing less and less demand. However the manufacturing business of the company is benefiting out of strong growth in exports with the efforts of the company started 2 years ago. Traction in order booking coming out for hydro business with the association with Voith Hydro.

On EPC front there are about 8 orders worth about Rs 3000 crore in the Market and everyone is competing for that. These orders in pipeline are largely of 7X100 MW Reliance order and some small orders in Cement, sugar and metals industries. The company is hopeful of bagging significant share of it.

Growing the international presence, the company launched USA operation in FY13 and also increased business from Japan.

For manufacturing domestic enquires are more for hydro and diesel but to lesser extent for steam turbine.

Order booking in domestic market is largely driven hydro and diesel engines segment and that is expected to continue. In exports side the order booking to be driven by hydro and gas engines.

The company expects the share of exports to grow to 40% in FY14 manufacturing revenue. Higher concentration in hydro as well as traction in GE's gas orders with expected repeat order in second half of FY14 to drive exports.

The new plant for more than 50 MW generators will be operational by Oct 2013. The new plant on full capacity will bring in incremental revenue of Rs 200 crore. The capex on the plant is Rs 120 crore. The two orders of 67.5 MW each will be delivered with-in current fiscal.

In EPC the company sources boiler from a Chinese company, who are well known players in CFBC segment and it uses Siemens turbines along with the company's generator.

In manufacturing business the exports will give a 2% point better EBITDA margin compared to domestic.

Order book of Japan subsidiary is Rs 40 crore.

The company terminated its negotiation with Vestas due to unfair contractual conditions.

On the back of power cut in the country the generator demand for less than 3 MW is witnessing strong growth from diesel power generation segment.

Generator margin will be better than 15% driven by better capacity utilization if the commodity prices are stable.