Key takeaways of the call

Revenues for the quarter was lower by 5% to Rs 331.3 crore, but the EBITDA (excluding forex loss/gain & oneoffs) was higher by 18% to Rs 14.4 crore with EBITDA margin expanding by 80 bps to 4.3%. After accounting for forex loss of Rs 5.7 crore (nil in Q1FY12) Restructuring (separation & integration) cost of Rs 1.6 crore (nil in Q1FY12) and provision for doubtful debts is Rs 6.4 crore (write back of Rs 3.5 crore in Q1FY12)the EBITDA (after one-offs) was Rs 0.7 crore, a fall of 96%. Finally at PAT level it was a loss of Rs 5.1 crore compared to a profit of Rs 8.2 crore in the corresponding previous period.

Market is not the same as it was in corresponding previous quarter. Order intake impacted by tough macro environment since January 2012. In tough financing environment there is delay in decisions. Order intake on a high base was lower at Rs 332.1 crore (down 16%yoy from Rs 393.8 crore). But the order intake for Q1FY13 was higher by 16%qoq from Rs 286.2 crore in Q4FY12.

In March 2012 the company cleaned up the order book by removing non moving orders worth Rs 100 crore. The order backlog is about Rs 11 billion as end of June 2012 end.

On the back of shortage of liquidity, the margin is not improving in the shorter term.

Sooner or latter investment has to come into this sector given the black out in the northern and eastern part of India on the back of grid collapse.

Financial difficulties with customers have increased the debtor's provisions affecting profit. The company continues to try for recovery of long time out-standings but on prudent basis it has provided for and if recovered the provision will be written back. In the short existence of the company after demerger the collections are good.

There is no delay in order finalization as far as infrastructure solution front such as substation etc.

In one product the company is importing finished product, components from China. On account of rupee depreciation, thus there is an actual loss of Rs 4 crore out of total forex loss. The balance is MTM loss etc.

Separation, integration and restructuring expenses has been amortised over a period of time instead of one go write off so it will continue for some more quarters.

Smart grid revenue is part of automation business and that is not a big number right now but expect this revenue stream to get accelerated going forward given huge requirement for modernization of the T&D network in the country.