Rajesh Doraiswamy, Jt. Managing Director of the company addressed the call:

Highlights of the call:

The company started as a single product manufacturer, manufacturing CAM operated rotary switches way back in 1986 in India and over the years we have evolved from a single product manufacturer to a company that offers total complete customized electrical solution to all our customers.

It has four state of the art manufacturing facilities are located in Coimbatore. We also have our in house R&D lab, which is recognized by the Government of India.

Through this focus and sheer determination to come out with products of highest quality it has been able to get a preferred vendor status with global giants like GE and Schneider.

All its products are internationally certified.

Net sales in Q1 FY20, grew 28.2% to Rs 162.1 crore largely driven by increase in business of Industrial Switch Gear and Wires & cables segments.

It saw good growth in revenues despite of the sluggish industrial market in India.

Sales growth was mainly driven by increase in switchgear business segment due to aggressive marketing as well as its wires & cables business.

In Q1 contribution from domestic sales was 88.6 %, mainly driven business of Industrial Switch Gear and Wires & Cables segments.

Industrial Switchgear accounted for 37.1% of net sales. This business grew 27.9% due to increase in demand across products especially an uptick in three phase dry type transformers and wire harnesses.

Wires & Cables accounted for 54.7% of net sales and it grew 27.4% mainly on account seasonal increase in demand.

Margins were impacted due to change in product mix and increase in raw material prices.

The market conditions continue to be challenging.

Despite difficult market conditions the company was able to grow its sales due to its long-term association with clients.

The management is confident that with its products of international standards, consistency in quality and timely delivery it will be able to continue to achieve stable growth.

Focus will always remain on adding new high margin products, reach out different markets with customized products and solutions in order to add newer clients and grow business.

The management is constantly looking at new opportunities for technical associations to strengthen its base of product offerings.

In recent past it acquired 72.32% stake in Kaycee Industries Limited, a pioneer in Industrial Switches for more than 75 years. Acquisition is in line with focus on increasing product offerings and expanding footprint into newer segments along with access to all India dealer network. Open offer to shareholders will be at Rs 3475 per share and it will be done in due course. Total Cost of Acquisition approx. is Rs 21.69 crore.

In Q1, Indian business accounted for 88.6% of sales against 85.1% yoy.

In Q1, Middle East accounted for 3.8% of sales against 1.6% yoy.

In Q1, US accounted for 1.1% of sales against 3.3% yoy.

In FY 2019 Revenue and EBITDA growth was driven by all three key businesses of Industrial Switch Gears, Building segment and Wires & cables.

Domestic business is driven by increase in demand and good traction for products in Building & Industrial Switchgear Segment.

It has access to L&T's local network through more than 350 distributors.

Building product business is dependent on real estate business.

RoCE is expected to improve to 18-20% in 2-3 years.

Working capital increased to 153 days from 130 days.

Energy Management which accounted for 1.8% of net revenue is order book driven business. During the quarter revenues were earned from AMC charges for past orders executed in Q1 FY20.

The market remains extremely challenging and industrial growth is not healthy.

The company is not looking at new products currently it is looking for consolidation of existing products.

It is looking at 15-20% sales growth. Internal target is to grow 25% so the management achieved the target in Q1. However wires and cables is seasonal business.

EBITDA Margins stood at 15.5% against 16.2% for Industrial Switchgear business. It was 7.5% against 7% in wire and cable business.

Plastics prices, its raw material, grew during the quarter.

The company targets exports to be 20-25% of sales. Sequentially the company has grown 20% but was flat on yoy basis.

If overall revenues grow 20%, exports can grow 25%.

The company has lots of OEMs customers in Asia and they buy seasonally. So that is why sales from Asia is lumpy. The management hopes to generate sales of around Rs 35 crore during the year from Asia.

The company has taken lots of initiatives to penetrate US markets. Exports to US is expected to double in FY 2021 compared to FY 2020.

It targets sales of Rs 650-670 crore without consolidating Kaycee. With Kaycee the company's sales should stand at Rs 700 crore.

For full year blended EBITDA should be around 11-11.5%.

It targets building products to be around 10% of sales at around Rs 60-65 crore. It targets Rs 320-330 cror from Wires and cables in FY 2020. Switchgear business should clock sales of Rs 280-300 crore.