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The company held its conference call on 31st July 2017 which was addressed by Mr Sunil Wadhwa MD
Key Highlights
For T&D industry, railway electrification, smart cities, implementation of Uday scheme etc are very positive over and above the orders that are coming from PGCIL and State grid companies. Transmission sector should see an investment of around Rs 2.6 lakh crore in 13th 5 year plan.
The company has received orders worth of around Rs 1582 crore in June 17 quarter, up by 99% on YoY basis. Major orders are received in TBCB space, in 765 KV GIS space and in balance of system in Solar space.
Order backlog stood at around Rs 8425 crore as on June 17 as compared to Rs 8150 crore as on Mar 17. Order book is up by 7% on YoY basis.
The execution was strong in June 17 quarter which led to higher sales and margins. Expects strong execution to continue for the rest of the year but 40% growth achieved in June 17 quarter in sales is too optimistic to expect in coming quarters.
Overall margins should be around 7-8% at the operating level, although higher execution can lead to higher margins.
Management expects the orders for T&D sector per se to remain flat in FY 18 due to the fact that orders from Power Grid being 1st year of 13th 5 year plan will be lower compared to last year which will be compensated by orders from State grid. Some tenders and enquiries do come from private sector but they are uncertain and difficult to determine a trend.
The company should see higher orders due to increase in market share from the same order pie. The order pie should increase in FY 19 and atleast 12-15% growth in overall tenders for transmission sector should be visible from FY 19 onwards.
Key orders from various utilities include: 400/220/132KV GIS substation at Hardoi road in Lucknow from UPPTCL, GIS extension of Gumma substation from HPPTCL, 400/132KV switchyard extension at Kahalgaon from NTPC, 765 & 230KV GIS in North Chennai from BGR Energy Systems Limited, Multiple orders of 765/400/220 KV substations, reactors and transformers from Power Grid in states of Karnataka, Jharkhand, Rajasthan, Maharashtra, MP, AP, Haryana and UP, 400/220 KV GIS Substations at Gurgaon, Palval area in Haryana from Sterlite Power Grid Ventures Limited under TBCB etc.
While Uday has seen some improvements in some States, operational improvement in many states is still to be seen. Distribution side have a great business opportunity now to complete the last mile connectivity as lot of activity has happened on transmission side.
Not much capacity addition happening in thermal space whereas renewable will aid in overall capacity addition.
Growth in FY 18 will be more of execution-led growth.
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