Key takeaways of the call

Order inflow in Q1FY20 and H1FY20 is Rs 101 crore and Rs 194 crore respectively. Current order book excluding SL order as end of Sep 30, 2019 stands at Rs 756 crore. Of the order book excluding SL order the share of exports is 30% and the share of infra/government is very miniscule.

Order bid pipeline is Rs 4000-5000 crore and of which about 30% is municipal and infra orders. The company is hopeful of concluding one or two large orders by end of this fiscal. The exact order size of these orders will be known only when the negotiations complete and scope is fixed/known.

Engineering - Improvement in revenues and margins on the back of healthy order backlog at the beginning of the year.

Sri Lanka (SL) order execution is proceeding satisfactorily. Revenue recognition in the quarter ended Sep 2019 has picked up pace based on work progress. Q2FY20 revenue booked is Rs 102 crore (against Rs 10.62 crore in Q2FY19). The company has booked revenue of Rs 41 crore in Q1FY20 from SL order. Invoicing in engineering division excluding SL order is Rs 166 crore in Q2FY20.

Having booked revenue of Rs 143 crore in H1FY20 from SL order, the company is very much on track for a revenue booking of Rs 500 crore from this SL order in FY20. The company expects booking of another Rs 350 crore plus next fiscal in case of this order.

Overall scale of operation of engineering has gone up and the benefit of that has improved the profitability. The company is cautiously optimistic about improvement in profitability. The benefit of scale and topline growth has to percolate to bottomline.

Chemicals - Sustained demand in certain segments has contributed to improvement in sales and profitability in Q2FY20. The company continues to invest in the capacity expansion in Chemical segment to meet the increasing market demand

Consumer Products - Increased market penetration has resulted in growth. The company expects improved financial performance in the ensuing quarters with increase in volumes.

Export revenue in H1FY20 is Rs 240 crore with major portion coming from engineering division with pick up of pace in execution of SL order.

Incremental capacity addition is Rs 50 crore in addition to normal maintenance capex. Capex is largely in the chemicals segment.

Historically the mix between resins and WT chemicals is 50:50. The share of resins is now higher due to increase in exports.

Chemicals - Capacity utilization is different for each products. The capacity utilization was close to 70% for resins and that for water treatment chemicals is about 65%.

Employee trust stake is classified as non promoter non public as per SEBI guidelines.