Key Highlights

GST implementation resulted in higher working capital costs. Negotiation on civil contracts due to GST also affected some execution and payment delays. Cash flow constraints due to GST which should settle down in next 4 months.

Company should see debt levels back to around Rs 200-220 crore as compared to around Rs 250 crore now.

Overall GST had positive impact on the company, with company now can take some input credits which it was not able to do earlier.

Order inflow till date was up by around 26% YoY to Rs 1158 crore. The company is on track of its order inflow guidance of around Rs 3700-3800 crore of order inflows in FY 18.

Order backlog as on date is around Rs 4100 crore which should reach to around Rs 4500-4600 crore by end of FY 18.

Execution to rise going forward and expects H2 FY 18 to see execution growth of around 20% YoY. FY 19 should also see an execution growth of around 16-18% YoY given strong order book visibility and no slow moving contracts.

Going forward by FY 19, O&M to remain around 33-35% of total sales which is from Power sector. Erection which is 90% from power sector to remain at around 40-45% of total sales as compared to around 65% in past. Civil would account for around 20-22% of total sales which will be 90% from non power sector.

So overall at consolidated level, around 22-25% of total sales in FY 19 to come from non power sector as compared to around 15-16% currently.

Margin contribution from Power sector is around 14% while non power is around 12-12.5%, so at blended level, the company expects around 13.3-13.5% OPM in next 2 years, which will increase going forward. Long term aim of the company is to stabilize around 14.5% margin levels.

Within non power sector, the company has orders from T&D sector, Railways, Road EPC, Building civil orders, industrial zone civil orders, rural electrification orders and civil orders from petroleum and refinery sector. All these would amount to around Rs 1600 crore worth of orders within the order book of around Rs 4500 crore by FY 19.

The company will also play its role in upgradation of the refineries to BS VI norms. Expects tenders of around Rs 25000 crore to be bid for the upgradation of the refineries in next 12-18 months.

Rs 700 crore order booking in H1 FY 19 is from international orders. They have better margins and payment terms.

Overall looking at international revenue contribution and O&M sales, the company would not require any incremental working capital going forward.

In Power space, lot of tenders expected from NTPC, Reliance, Dooshan etc in FY 18 in Power Thermal space. Currently there is a visibility of around Rs 8000 crore worth of tenders for Erection in H2 FY 18 in India.

No major capex in FY 18.

Overall tax rate will come down at consolidated level, as tax rates in some of its African subsidiaries is at 15-18%.