Key takeaways of the call

Q3FY18 revenue from cranes was up by 70% to Rs 185.13 crore. The revenue of construction equipment (CE), Material Handling (MH) and Agri Equipment was up by 57%, 46% and 3% respectively to Rs 21.64 crore, Rs 19.5 crore and Rs 52.76 crore. In case of cranes, the company is growing faster than the competitor. The construction equipment namely backhoes loaders etc the whole industry is doing well.

The company during Q3FY18 has clocked a volume of 1260 number for pick n carry cranes, 64 nos of mobile tower & tower cranes together, 1024 numbers of tractors and 215 numbers of forklifts.

Order inflow in last one to one-and-half month was strong and it just raining of order inflow. Order inflow in Jan 2017 was 50% higher than orders received in the month of Oct/Nov/Dec 2017 levels.

The company is now looking at a growth of about 35-40% growth for FY18 as the company has already registered a sales growth of 38% for 9mFY18, which is well in excess of the already upwardly revised 25% growth target set for FY18.

Currently the company does not require any fresh capacity. Current capacity of the company is good enough to generate revenue of about Rs 1500-1600 crore. The company's capacity utilization for cranes was about 60%, CE was 30%, MH was 50%, agriculture equipments it is 50%. The company has enough land bank for capacity augmentation and fresh capacity will be put in place in 4-7 months. Maintenance capex towards current capacity will be about Rs 8 crore.

Profit percentage will improve further with revenue going up. Steel prices increase put pressure in Jan 2018. The company has increased price by about 2.5-3% in August 2017. With steel and other input prices harden the company is pushing for 3.5% price increase starting Feb 2018.

The company's market share in MH is about 20% but in case of CE and Agri Equipment is not worthwhile.

Rental business has clocked revenue of about Rs 15 crore in 9mFY18 and about Rs 18 crore in FY17. Rental business is targeted to reach a size 6-7 times of current size in next 2-3 years.

About 50-60% of demand comes from infrastructure i.e. urban infra, railways, roads, rural electrification etc. and balance from industries. Even tower cranes demand has improved. Barring NCR all other cities are seeing improvement in real estate construction leading to improvement in tower crane demand.

On construction equipment the company will be adding a model in case of Motor grader; the company has products in vibrators and backhoe loaders. The company will add excavators going forward.