Key takeaways of the call

Tail winds of Q4FY16 continued in Q1FY17. Except exports, revenue of all segments has seen strong growth in Q1FY17. Export hit largely due to zero off take from Saudi Arabia and Egypt in Q1FY17.

The volume of DV Series in Q1FY17 was 230 number compared to 190 number in Q1FY16. In value terms it is Rs 32 crore in Q1FY17 compared to Rs 27 crore in the corresponding previous period. The volume of 750 KVA in Q1FY17 DV Series is 25 numbers and that is part of Q1FY17 DV Series numbers.

The company launched the indigenously developed 1010 kva DG set with 16 cylinder CRDi engine in June 2016. KOEL Green emerged as the only brand in India to provide full product range from 2 kva to 1010 kva. The company will be looking to launch products upto 2000 kva in next 2 years. There are requirements for such large DG sets from customer segments such as data centres etc.,

Market feed-back for 750 kva is encouraging and the order book for the same is good. The enquiry is for more than 200 nos. In 750 KVA the company expects a sales volume of 100 numbers in 2016-17. The company is the last entrant to 750 kva and the company's 750 kva engine is on par or superior to that in the market. Fuel efficiency etc is superior to product available in the market. The price is on par with that of competitors.

Since Q4FY17 the ME market especially the Saudi Arabia where the company has 10% market share has seen payment delays post change in Monarchy there by lead to lower demand. The South African and Nigerian market volumes were impacted by devaluation of currency. Egypt also confronted by the same currency variation issue.

Power Gen market as a whole has witnessed 9.2%yoy growth in Q1FY17. Expect the market to register a growth of about 7-8% growth for the year 2016-17. Telecom demand is junky and come up during a quarter and dries up in another.

KOEL Industrial segment witnessed a growth of 23%yoy in Q1FY17. While tractors market is recovering from last year dip in anticipation of good monsoon, applications like Backhoe, Transit mixers and compactors showed positive growth benefiting out of increased construction activity and investment in road sector. Construction equipment and earthmoving segment registered over 40%yoy growth in Q1FY17. The tractors segment demand was up by 6%yoy. The company expects the industrial demand for FY17 is expected to be good compared to last year driven by positive government policies.

The company has registered an exports growth of 13% in FY16. But with weak demand in market such as Saudi Arabia for power gensets the company has to look out for some other products such as diesel engine pumpsets which is in demand in Egypt and newer geographies for exports growth in FY17. Since Iran is coming up, the exports are expected to be good starting Q3FY17.

The company is not focusing on corporate and institution order on all India bases as far as PowerGen business in concerned especially Telecom. The company recently got an order from Punjab for 1000 nos.

Tillers volume is largely depend on policy and approval of the company's product. The company is consistently looking up a volume of about 500-600 number of tillers per month.

Diesel pumpset is the de-growing market and electric pumps are the growing market. The company has to enter new markets so as to increase volume.

Rejiging the entire supply chain to quick response to market demand. Present inventory in entire supply chain is optimized.