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Elgi Equipments held a conference call on June 1, 2015. In the conference call the company was represented by CMD of the company.
Key takeaways of the call
Exports (excluding sales to subsidiary) for the quarter and fiscal ended March 2015 stood at Rs 18 crore and Rs 64 crore (down from Rs 92 crore in FY14). Sales to overseas subsidiaries (replenishment of stocks) were about Rs 110 crore in Q4FY15.
Water well rig segment sales witnessed improvement in Q4FY15 compared to corresponding previous period. But the sales were no way near to the levels where it used to be.
In FY15 the aggregate EBITDA of international business was a profit of Rs 6.5 crore. In FY15, Rotair grew by 12% in sales and maintained profitability (in terms of %). Since the focus of Rotair for the current fiscal going to be improving profitability margin the sales may grew by about only 9-10%. The performance of Brazil subsidiary has improved. While ELGI USA has reported lower losses, the PAttinson has reported flattish profitability.
Forex impact for the quarter and fiscal was Rs 10 crore and Rs 14 crore respectively. This is largely on account of MTM losses on account of borrowings outstanding, dues back to ELGI. Brazil has loan from parent of about USD 34 million.
India's contribution to EBITDA would have dropped by Rs 28 crore for FY15 but that of international (exports plus sales to subsidiary) increased its contribution to EBITDA by Rs 15 crore.
Share of Aftermarket to sales has growth from about 14-15% about 7-8 years ago to about 24-25% now. Projects accounts less than 9% the balance were accounted by products.
Debt reduction in Rs 50-60 crore is expected in current fiscal.
Start selling the newly developed centrifugal compressors after severe trails running into thousands of hours. But building a range of products will take about 2.5 years and similarly for built up installation to get the customer confidence.
Oil free screw sales increased in India. Now the company is 90% domestic and balance will be indigenization soon.
Going forward the tax rate will be about 28-30%. The higher tax rate in second half of FY15 was largely on account of settlement with Atlas Copco.
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