Key takeaways of the conference call

More than 50% of the business of the company is depended on Oil and Gas sector. The company's supplies are largely to long gestation projects typically of 18-24 months.

Oil & Gas - Currently now the investments are being discussed even though major investments commitment is still awaited. Hoping for larger investments to happen this fiscal apart from the current opportunities out of changes and process modifications. Piped Natural Gas is another segment that is witnessing steady traction with more geographies/cities getting/expand piped natural gas network with availability of gas. Along with this the thrust on CNG stations for vehicles are also happening. Order from places such as Kerala and Bangalore etc are trickling in.

Refrigeration compressor - the company is a dominant player in this business segment. This segment is growing steadily at about 5-7% every year as there is lot of thrust in preservation of food products. The company is just compressor suppliers for foods sector rather than systems suppliers.

Currently the company is not a big player in Air compressors. But the company is working on expanding its product offerings including screw and centrifugal compressors. Centrifugal compressor is already launched and it is well received in the market. The complete range of centrifugal compressors will be launched soon. Similarly the company is already in screw compressor and is in the process of developing indigenous technology for all ranges rather than depending on buyout technology. This will give a run for the money for the existing major players on launch of new products as they are developed indigenously.

Leaving out O&G demand, the growth in compressor business is normal.

Capacity utilization of transmission business is currently around 60%. Now the company gone into making industrial gear boxes for which the initial response is good. The company sees good niche for this large gear boxes which are currently dominated by imports. Large size gear boxes such as 16.5 MW size has come out well and are also getting orders in both fresh as well as replacements markets. Quarter on Quarter growth in revenue for this segment is expected to sustain.

For the last two fiscal the contribution of projects business to top-line is restricted to around 30% with balance 70% coming from products, unlike earlier where the project business has dominant contribution to sales.

Order book at about Rs 250 crore currently is almost same compared to corresponding previous period.

The company expects to maintain last fiscal margin for current fiscal as well.

The company is debt free and Cash/ treasury is about Rs 160 crore plus.

The company decided to amalgamation Kirloskar RoadRailer and Pneumatic Holdings into Kirloskar Pneumatic Company subject to all necessary approvals.

Road Railer business: Most of the clearances are obtained. Hopefully by end of this fiscal the service rollout will happen. Second rake is ready. The company has two terminals in Delhi and Chennai and for this business the company has already signed agreement with Indian Railways. It is too early to quote a sales figure for this new service vertical. Per rake loadable/carriable capacity is about 1000 tonnes per trip and the company expects around 52 round trips per year for each rake. Direct investment so far in this business including rolling stocks, terminal equipments and others put-together is about Rs 50 crore. Next year the investment could be about Rs 32 crore.