In interaction with Mr. Ankur Patni Executive Director on 2 Aug 2018
Key Highlights
Strong recovery in engineering sector. Visibility of orders remains very strong.
Order book is around Rs 585 crore excluding Srilankan order. Almost done with all legacy orders.
Rs 18 crore revenue recognized from Srilankan order in June 18 quarter. Ramp up to happen in H2 FY 19. As against Rs 120 crore of Srilankan order being executed in FY 18, around Rs 400 crore of order execution should happen in FY 19.
Certain dispatches planned in engineering sector in June 2018 quarter could not be dispatched due to customers delay in accepting dispatches. However things are getting clear and dispatches will happen in Sep 18 quarter.
Current orders being executed have better margins. Even the current order book position also has better margins than orders which got executed in FY 18, which will result in improvement in margins in FY 19 in engineering segment.
The company has taken partial shut down for 15 days in its Resin manufacturing facility due to ongoing expansions which will be complete by H2 FY 19. So dispatches have been delayed.
Margins in chemical segment remained under pressure due to rising commodity prices. Company is confident of margins to come back in coming quarters due to price hikes and once expanded resin capacity gets streamlined.
Losses in consumer product segment were lower due to better realization and contained expenses. In rural market the company is working with governments, NGO and other organizations for providing pure drinking water.
Membrane plant commissioned in end of FY 18 has started seeing its depreciation resulting in overall higher depreciation for the company.
The company earned exchange gain of Rs 9 crore is largely from exports from engineering and resin segments. So on segmental basis this forms a part of operating income while in profit and loss statement, due to Accounting standard the same is shown as other income.
Improvements in subsidiaries continue in FY 19. Losses will be contained but break even in all the companies will happen only in FY 20.
Rs 50 crore capex for FY 19 including the Resin expansion.
Eyeing waste related projects in coming years.
The shares of the Promoters are held in Trust and are in physical form, the company is trying to get it dematerialized by end of next quarter, so overall before FY 19, the company's scip will be out from T2T segment. That's the only reason why the company is in T2T segment.
From Q1 FY 20 onwards, the company will give consolidated quarterly results for the benefit of investors and shareholders.
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