TD Power Systems held a conference call on May 22, 2015. In the conference call the company was represented by Nikhil Kumar, MD of the company.

Key takeaways of the conference call

Order intake in Q4FY15 was Rs 83 crore and that for FY15 was about Rs 432 crore (up from Rs 363 crore in FY14). The order backlog as end of March 2015 was Rs 464 crore and of which about 61% are domestic, 28% exports, 11% is deemed exports. Of the total order backlog the share of manufacturing was about Rs 339 crore (domestic 46% and balance are exports/deemed exports), projects is about Rs 113 crore and EPC is Rs 12 crore.

The company is winding up the EPC business. The company already stops bidding for new jobs and will not be in market any more. Of the two projects pending in the EPC order book, one is ready for commissioning and another is ready for completion in June 10, 2016. So by end of Q2FY16 there won't be any contribution from EPC business.

In Q4FY15 the company in other expenses accounted a one off expenses of Rs 17.5 crore including Rs 8.5 crore towards cost for walking out from Phase II of the project under negotiation with customer and Rs 3 crore towards cost overrun. As the company brought in Rs 15.28 crore from reserves (future contracts) the impact in P&L is not full. The company is not expecting any major write off in case of balance EPC order book but clarity will emerge by Q2FY16.

The project business however will be continued. The execution cycle of project order book is 12 months. Project business incurring loss in Q4FY15 is due to timing of billing. The company will get back to historical margins.

Order visibility barring sugar is bleak. The demand from sugar being seasonal and being before sugar season the demand will diminish by August. After that if other sectors did not pick up, the situation will be challenging.

The company is witnessing pricing pressure in both domestic and overseas market. But the company is making efforts to minimize the impact of it with renegotiating prices of sourcing materials with vendors. Lack of adequate orders for all increased the competition and driving down prices in the domestic market, but in overseas market with the company become more visible the established players are pushing down the prices to thwart competition.

After winding up of EPC business, of the consolidated cash position as end of March 2015, the cash of about Rs 192 crore in parent and Rs 15 crore in Japan will be preserved.

Japan Subsidiary is doing lot of project business inside Japan. Of the total project order book about Rs 43 crore is order book of Japan subsidiary.