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Alstom T&D India (formerly AREVA T&D India) held a conference call on Feb 16, 2012 to discuss the performance of the company for the quarter ended Dec 2011. In the conference call the company was represented by Ratin Basu, MD Sunil Mathur, CFO and Eswara Moorthy, Finance Director.
Key takeaways of the conference call
Sales for fourth quarter ended Dec 2011 was lower by 49% to Rs 678.9 crore and the operating profit was lower by 76% to Rs 38.1 crore as the operating margin crashed to 5.6% compared to 11.8% in the corresponding previous period. The PAT eventually was lower by 66% to Rs 30.2 crore.
Sales for twelve month ended Dec 2011 was down by 23% to Rs 3116.3 crore and the PAT was lower by 37% to Rs 117.1 crore.
The financial results of the company for quarter/12 month ended Dec 2011 excludes "Distribution Business" except for the period January 2011 to March 2011 as the demerger is from the Appointed Date of April 1, 2011. Consequent to this the previous period figures are not on like to like basis.
The market continues to be extremely tough due to postponement of investments as well as huge SEB losses, preventing investments in the Power Sector. Despite adverse market conditions, the company have posted 12% increase on like to like basis in order intake for twelve month ended Dec 2011 and 13% increase in order backlog over annual 2010. The order backlog as end of Dec 2011 stands healthy at Rs 4335.6 crore, a all time high order backlog for the company. Projects accounts about 50% of the current order backlog.
Order intake for Q4FY12 is Rs 664 crore compared to Rs 1290.3 crore in the corresponding previous period. Q42011 order intake was lower due to delay in customer ordering. The order intake for CY2011 on like to like basis is Rs 3393 crore.
Order flow came mostly through selected Utilities, including Power Grid, small and medium size orders across Industry and Infrastructure segments of the market.
Power generation market has been further impacted due to 1) Deferment of investment by most private IPPs; 2)Severe cash shortage at SEBs is causing them to scale down power purchases and 3) Banks are cautious in sanctioning fresh loans to the SEBs. Resultantly the power equipment market has shrunk significantly in CY2011. Hopefully Shunglu committee report on SEB financing would be addressed by Central and State Governments within 2012.
Industry & Infrastructure sectors are yet to show positive growth in Capex. However Powergrid is maintaining its Investment program. Hopefully NTPC will also now able to clear its backlog of orders with Supreme court having given a clear verdict.
The company has bagged Bareilly (a 756 kv) substation order worth Rs 100 crore and with this the company has bagged 17 out of 40 765 kv substations so far finalised in the country. In 12 th five year plan, 765 kv will be the grid backbone voltage and the company is well positioned to capitalize on this.
The quarterly sales of Rs 678.9 crore are lower as compared to previous quarter due to delayed Customer clearances (due to land and coal linkages).
765 kv GIS is a new phenomenon. Land is an issue for 765 KV GIS projects with in the city but outside city it will not be an issue as land prices are not astronimical. Few GIS project which power grid has floated in recent past. Existing substation within city are expected to be converted into GIS in next 5 years.
The company has kickstarted the progress of sale of its land assets.
The Board of the Company decided to change financial year of the company to April through March. Accordingly, the current financial year is for a period of 15 months ending in March 2012.
The Hon'ble High Courts of Gujarat and Delhi had at their respective hearings on September 19, and October 24, 2011 sanctioned the Scheme of Arrangement for demerger of the Company's distribution business into Smartgrid Automation Distribution and Switchgear Limited. On filing the Certified True Copies with the Registrars of Companies on 26th November, 2011, the demerger has been given effect to.
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