• Operational income excluding other operating income was down by 4% to Rs 877.73 crore. However the Value of production for quarter was up by marginal 1% to Rs 960.24 crore. Value of production is 14.1% higher than sales for the quarter. Comparatively value of production was 8.5% higher than sales in the corresponding previous period. Sales lower than value of production for the quarter reflects inventory built-up which will get liquidated in coming months.
• Operating profit margin stood contracted by 360 bps to 4% and that can be attributed to higher other expenses. While staff cost as proportion of sales net of stocks was flat at 10.1%, the material cost was down by marginal 20 bps to 69.5%. But the other expenses jumped up by 390 bps to 16.7% thus offsetting the modest gain in other cost heads. The jump in other expenses largely on account of one time provisions towards doubtful debtors and tax litigations.
• Other income more than doubled (up 123%) to Rs 42.48 crore and thus the fall at PBIDT level moderated to 13%. The interest cost was up by 68% to Rs 23.99 crore. The depreciation was up by 2% to Rs 21.97 crore. Thus hit by higher interest and depreciation cost the PBT was down by 41% to Rs 31.43 crore.
• EO income for the quarter as well as corresponding previous period was nil. The tax provision for the quarter was down by 37% to Rs 10.91 crore but the tax rate was up at 34.7% compared to 32.6% in the corresponding previous period. Thus the PAT was down by 43% to Rs 20.52 crore.

Half yearly performance

Sales were up by 3% to Rs 1785.12 crore. But with OPM stand negative at 8.1% (compared to 5.4% in corresponding previous period) the operating profit was a loss of Rs 145.02 crore compared to a profit of Rs 93.62 crore in the corresponding previous period. Eventually at PAT level it was a loss of Rs 176.89 crore compared to a profit of Rs 46.25 crore in the corresponding previous period.

On the basis of internal evaluation including significant lapse of time and resultant increased in uncertainty in realization, the company has provided for an amount of Rs 69.3 crore towards doubt full debtors during the quarter ended June 2016. The management has also reassessed the pending matters relating to taxes, and accordingly has created provision of Rs 38.4 crore and Rs 145 crore towards direct and in-direct taxes litigation/disputes respectively during the same period. This has turned the bottom-line into red.

Order book

Order backlog as end of September 2016 stood at 8270 crore as the order intake being Rs 1250 crore in Q2FY17.

Other developments

The company achieved a significant milestone with the commencement of India's first ‘Make in India' 765 kV GIS dedicated manufacturing line at Chennai. The dedicated line will cater to the growing demand of 765kV GIS in India and abroad. The company has installed 755 GIS Bays, the largest in India. Since inception of its Chennai facility in 2009, it has produced over 450 GIS Bays till date - highest number in India by any GIS manufacturer. It also successfully commissioned 765 kV AIS substations at Phagi and Bhiwani for Power Grid and 132 kV GIS at Rawanbhata for CSPTCL.

Management Comment

Rathin Basu, Manging Director of GE T&D India said "Despite a challenging quarter given the investment environment, we achieved a strong order booking to add to our healthy backlog and are focused on driving execution and commissioning. Adding to our Make in India initiative we achieved another major milestone of manufacturing the first 765kV GIS Breaker at our Paddapai facility."

The stock hovers around Rs 346.65.