Key takeaways of the conference call

Of overall FY13 sales the split between product:project is 65:35 compared to 40:60 in FY12. Of the total compressor sales of Rs 448 crore for FY13 the split between product:project is 40:60 compared to 25:75 in the FY12.

Started FY13 with an order book of Rs 400 crore and it did a turnover of Rs 548 crore. Still have about orders worth on Rs 350 crore at the start of current fiscal.

Investment climate in the country has taken a beat for some years. Especially the O&G industry is also one of the major sector got impacted. Many of the tenders to be finalized couple of years ago have not been even floated. Many of tenders that have not floated then are now published. The tenders now floated are all for turnkey contract package. Since the company is in the business of supplying to systems with-in that, the order finalization for the supplies, the company addresses/have presence will happen only after finalization of turnkey contractor. Finalization of turnkey contractor will take another 3 months. So order finalization for the product/supplies catered to by the company will happen only by end of current fiscal.

Recently there was an ONGC tender and unprecedented number of players bought tender document. This high level of competition is largely on account of not much of business in the market. This level of competition drives down price.

Defence procurement is also standstill in FY2013. The tenders floated during the year have not seen any finalization.

The market outlook for FY14 is very similar to FY13.

In a difficult year the company understand where its costs where and tries to cut down the fabs. Efforts to cut cost and operational efficiency measures taken up and that turned fruitful. There is further room for further cost reduction.

Capex for FY14 is about Rs 30 crore excluding railways.

Transmission business registered positive growth in FY13 and the company thinks it will improve again this year as well both in terms of sales and profits. The growth in FY13 came largely from Railways and hope that will continue this year as well along with introduction of industrial gear boxes. There were improvements in process improvements. The company had not looked much beyond railways, the major customer. Off late the company is now entering into other types of gear boxes. The company has got encouraging success in new products and the company will capitalize on it this year.

Now the company is in approval list of many oil companies in Middle East.

Kirloskar Road Railer: Still awaiting for some clearance now scheduled for emergency brake distance test for full rake. The company has manufactured full rake and that has now to been assembled on track and they have to conduct emergency brake distance test. Once that is done then the KRR business will commence. No investor is identified yet to invest in the company. Spent a capex of about Rs 20 crore so far in it.

Actively looking at acquiring business in other part of the world. The company will not acquired business not in our core business or totally align to the company. Last year the company tried to acquire one company in transmission line last year but it was out-bided.

In transmission the company is in need for some technology to fill product gaps. The company is not in of any technology in compression space.

In industrial gear box space the company manufacturers only custom/tailor made gear boxes.

In railways the company's transmission products not only goes to new locomotives but also goes for refurbishing of old locos.

In numbers (volume terms) 95% the company manufacture in-house and 5% imports.

Of total compressor revenue 5% is exports. The company export refrigeration compressors etc.

The company makes both reciprocating and rotary/centrifugal. The company's manufacturing largely on reciprocating. The company does not have presence in large centrifugal/rotary.

Transmission product capacity utilization is around 80%.