Key Highlights

The company did a smooth transition to GST in June 17 quarter.

Also the company did an acquisition of La Gajjar Machines which are engaged in manufacturing electric pumpsets having plant in Gujarat. Entire acquisition was from internal accruals. La Gajjar has strong presence in States such as Orissa and UP.

Power generation segment saw a sales growth of 9% in June 17 quarter largely due to telecom order of around Rs 22 crore from Reliance Jio. Expects good orders from telecom sector from Reliance and Bharti in FY 18.

Initially the margins in telecom gen set orders are less, but gradually the margins will improve as the scale picks up further.

Other than the telecom sector, the demand in power gen sets otherwise was normal in June 17 quarter.

Agri gen sets business was down by 6% as there was inventory destocking at dealers end. Things will gradually recover from Sep 17 onwards.

Electric pumps were launched in Bihar, Rajasthan and other markets. Expects to leverage the La Gajjar Machines products with existing dealers and distributors.

Industrial gen sets markets have seen a decent 15% growth led by growth of 18% in off highway segment. Good growth was seen from road and infrastructure segment.

The company received first of its order of DV series engines from Navy. Also received 4 large orders from Bharat Electronics.

Overall, Ebidta margin stood at 9.2% as compared to 12.5% for June 16 quarter. The company lost the quarterly benefits of around Rs 9 crore from Mar 17 onwards, which it used to have on account of subsidy and incentives from its Kagal plant. Further, acquisition related expenses, some front loading of expenses etc lead to lower margins.

The company was able to penetrate in newer markets of Latin America and some South East Asian countries for exports. Margins in exports are more or less similar to domestic market.

Overall, H2 FY 18 looks better

Cash equivalent as on June 17 stands around Rs 1045 crore.