Key takeaways of the call

In FY18 Pick n Carry crane registered a volume growth of 51%, tower cranes up by 20%, Forklifts about 53%; agri equipment by 21% and the construction equipment including backhoe loaders grew by 47%.

Sales volume of pick n carry cranes was 5000 numbers, tower cranes was 77 numbers, forklifts 934 units, tractors 3520 nos, harvesters 77 numbers.

The company registered 47% volume growth in Backhoe loaders to about 230 units and the company expects to clock a growth of 70-80% in FY19.

Order intake so far in current fiscal i.e. FY19 witnessed a strong growth momentum of about 40-50% compared to corresponding previous period.

Expect the company to close current fiscal with a revenue growth of about 30-35%. EBITDA margin, PBT margin and PAT margin are expected at 11%, 8-9% and 6% respectively.

Roughly about 7-8% of volume demand would have come from replacement in FY18

The company expects its road construction equipment portfolio to grow at 70-80% growth in next 4-6 years.

Rental business grew by 20% in FY18. Rental business accounted for about 2% (or Rs 21 crore) of the revenue of the company. The company is choosy with whom it is working. Pick up in construction

Capacity utilization in case of cranes was 75%, Construction equipment was 30%, Material Handling including Forklift was about 50% and Agri Equipment was 50%.

At current location the company in possession and owning 80 acres and of which the company is using only about 30 acres. So it has enough land to expand at current location itself.

The company expects to increase its market share by at least 5% from current about 63%. The company's market share in Forklifts is about 20%.

The company is close to clinch a deal for contract manufacturing with a Polish Company for their overseas market in Africa etc. Under this arrangement the company expects a volume of about 4000-5000 tractors in 35-45 HP range. The volume is expected to kick in by end of this fiscal and full benefit of it may be in next fiscal.

The company is in the process of expanding the capacity of cranes by 50% and additional capacity will be available by Sep 2018. So there is will not be any capacity constraint going forward.

Frested is a wholly owned subsidiary and this SPV is created to acquire a company in Rumania, which was subsequently shut down as it could not run profitably. There is no addition share issue and thus it will be a win-win situation for the company. The operating cost of Rs 40-50 lakh in Frested will become zero with merger.

Exports are not used to account for not more than 1.5% share of the revenue of the company. But the company formed a dedicated export cell six months ago and managed to increase share of export to total revenue increase to about 4.5% in FY18. In FY19 it will further increase to about 8-10% on a higher base.

Backhoe loaders are the single largest construction equipment catergory with an annual sales volume of 40000 units. In Backhoe the company competing with a host of people including market leader JCB who controls about 65% of market share. About 50% market share of Motor Grader is controlled by Caterpillar but the company is able to make a quick inroad with price advantage and latest technology superior product. Other players in motor grader are BEML and Chinese imports. Other product is Vibratory Soil Compactors where the company is in direct competition with Volvo, Escorts etc.

The company has a backhoe loader capacity of 1200 numbers per annum and it can go up upto 1600 number per annum.

Depending on model of cranes there is a waiting period of upto 2 months.

Engaged Vector Consulting to streamline inventory and cutting down lead time of delivery of equipment/product for customers.