Key takeaways of conference call

Sales for the quarter ended Dec 2011 was lower by 36% to Rs 803.74 crore but the degrowth in EBITDA was restricted to 12% (to Rs 131.32 crore) as the EBITDA margin expanded to 16.4% from 11.9% in corresponding previous period. Eventually the net profit was lower by 38% to Rs 54.74 crore hurt by 175% jump in interest cost and higher tax incidence. The PAT margin stood at 6.8% compared to 7% in corresponding previous period.

EBITDA Margin little over 16% is on account of order mix with about 60% of the revenue coming from BoP orders and 38% from EPC orders. Unlike earlier BoP orders which are of fixed contracts the Chandrapur and Marwah BoP order has inbuilt price escalation clause apart from high margin nature of it.

Chandrapur and Marwah have contributed about Rs 180 crore each for the quarter ended Dec 2011 and the revenue contribution from Mettur is Rs 140 crore and Jalawar is Rs 130 crore. Revenue recognistion from krishnapatnam order is Rs 50 crore.

Expects to close FY12 with a sales of Rs 3400 crore and a PAT margin of 6.5% to 6.7%. With the company closing 9mFY12 with a sales of Rs 2309 crore expects a sales of about Rs 1100 crore in Q4FY12.

Order backlog of the company as end of Dec 2011 is Rs 8200 crore. This order backlog is excluding the NTPC's bulk order for 4X800 MW TG sets worth about Rs 3000-3200 crore for which the company is L1. The company expects to close the fiscal with an order backlog of Rs 10000 crore (not considering RJVUNL order) and FY13 sales of Rs 4500-5000 crore.

In FY13 the company expects the mix to change with increased contribution from EPC orders coming in as well as execution of NTPC bulk orders. Thus the EBITDA margin of FY13 is expected to be in the range of 11-12%.

Retention money as of now is Rs 1200 crore and of which retention money pertaining to project under execution is Rs 750 crore and balance Rs 450 crore is outstanding in case of completed/commissioned project. Of the Rs 450 crore o/s retention money the company expects to collect/receive Rs 150 crore before March 2012. Retention money outstanding incase of Vijayawada project is Rs 120 crore and of which Rs 40 crore is already received.

In case of Mettur the project will start operation by May 2012 and in case of Kalisindh the commissioning activity has just started. Chandrapur – some time in Dec 2012 ready for commissioning. Marwah – expect commissioning to start by August. Krishnapatnam – 2500 piles already done. Erection already started, Engg more than 50% is over.

Major BoP under pipeline is Singareni Collerie's 2X600 for which BTG order has been placed with BHEL and now they have to finalise BoP order.

Loans in the books as end of Dec 2011 is Rs 2080 crore. Debtors about Rs 3800 crore and Cash is Rs 800 crore.

Construction activity on both TG plant and Boiler plant JV is expected to commence in April 2012 as there was delay in getting small land from TN Govt. The company hopes to get that by end of month. The commissioning of TG plant is 18 months and 12 months for boiler plant since commencement of construction activity. The company has invested about Rs 100 crore in equity of these two JV companies in 9mFY12 and not much of investment is planned in Q4FY12. The company expects to invest about Rs 300 crore in equity of these 2 JV companies in FY13.

Power projects under pipeline/planning: Things are picking up in state utility side and about 6000 MW worth of supercritical orders are likely to be tendered out in next 6 months.

Scale down of revenue guidance for FY12 from earlier Rs 4850 crore is largely on account of civil construction delays in certain projects such as Krishnapatnam etc. This has resulted in shift in revenue recognition in such projects from earlier schedule.