TD Power Systems held a conference call on May 13, 2016. In the conference call the company was represented by Nikhil Kumar, CMD and Prabhakar, CFO.
Key takeaways of the call
Order backlog as end of March 31, 2016 stood at Rs 375.1 crore and of which domestic orders were Rs 195.3 crore, exports were Rs 122.6 crore and deemed exports were about Rs 57.2 crore. In terms of vertical while the manufacturing account about Rs 294.7 crore (of which domestic is Rs 114.9 crore and balance are exports & deemed exports), project business was Rs 78.9 crore (all are domestic orders) and EPC business was Rs 1.6 crore.
Manufacturing order intake for Q4FY16 was about Rs 100 crore compared to Rs 83 crore in corresponding previous period. Order intake Rs 350 432 crore 198 crore
Project business order intake for Q4FY16 was Rs 21 crore and Rs 64 crore for full year.
Sales revenue of Manufacturing business for FY17 is expected to register a growth 12-15%. EBITDA margin expected for FY17 for manufacturing business is about 10.5-11.5%.
In manufacturing business, the growth in revenue is expected to be driven by gas turbines, moderate growth in hydro. The domestic steam turbine and hydro business is expected to be weak with lower volumes. Moderate growth in volume in case of railway exports is expected starting from Q3FY17 onwards.
Project business sale for FY17 is expected at about Rs 95-100 crore. The EBITDA was expected to be about Rs 5-6 crore for FY17.
EPC business has come to a conclusion. No further loss is expected going forward in current fiscal (FY17) as the company has completely provided for any expected losses. Running expenses of about Rs 8-10 lakh per month is expected to continue till Q3FY17 and thereafter that will also disappear.
The company has made a provision of about Rs 5.11 crore towards doubtful debts in case of project business done 3 years ago. This relates to 2X13 mw turbines sold to Indian customers by Japan Office.
Expense in case of mfg business has gone up and there is no provision in case of manufacturing business.
US operation has ceased and no provision towards it.
Gas business is all exports with major customer segment being IPP and captive power. Western Europe and Australia are the major customer markets.
Competition is aggressive even in export markets with European players fighting back with price cuts. This is temporary phenomenon and will disappear going forward in medium to long term.
The five generator supplied to America customers is already installed in locomotives and are under trial.
Captive power market in domestic market in FY16 was about 600 mw down from about 3000 MW in 2012. This is not expected to go down further. Enquiries are there but that is not got converted to orders in last year. Steam turbines are having a delivery period of 9 months minimum. So this year growth for domestic manufacturer of small turbine manufacturers is expected to be export driven.
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