Key Points of the call:

• Commercial Engineers and Body Builders Co (CEBBCO) has reported a standalone sales turnover of Rs 137.44 crore and a net profit of Rs 13.68 crore for the third quarter ended Dec '12. For 9MFY13, CEBBCO has reported a PAT of Rs. 48.22 crore as against PAT of Rs. 27.66 crore for 9MFY12 and against Rs. 40.80 crore for full year FY 12.

• Growth of CEBBCO is driven by rising FBV conversion and not by CV industry volumes.

• Despite a continued slowdown in the LCV, M&HCV industry, the endeavour of OEMs to sell more FBV continue.

• Project Replica : CEBBCO entered the Replacement Market for Bodies in Q1FY13. The company had a turnover of Rs. 31.71 crore in Q3FY13. The company continues to do well in the replica market and has increased its business in that segment resulting in increased EBITDA and PAT margins for the company for the quarter.

• Additional Tipper Facility - The implementation of the said project got delayed a little & is now hopeful of starting commercial production for the increased numbers in the current quarter which will benefit the company for full of FY 14.

• Railway Highlights - Successfully delivered the 247 wagons order (Q1FY13 – 200 Units, Q2FY13 – 47 Units) during 1H13 from Braithwaite & Co. Ltd. The company therefore did not have significant sales from the railways segment in Q3FY13 and all revenues & profits have come from the commercial vehicle division.

• The Braithwaite order which was executed in 1HFY13 had resulted in additional profits coming into the first two quarters. If we remove the EBITDA and PAT margins from Braithwaite order in the first two quarters, the company has been able to maintain margins and revenues in the 3rd quarter as well.

• More than 99% of revenues of the company have come out of the CV segment. The company has done well in the CV segment and its plants have been running efficiently.

• Company is trying to increase the replica numbers. But at the same time keeping the customer relations with OEMs at proper levels. Relationship management will play crucial role.

• Management is worried about the share price drop in last 2 days.

• It does not disclose volumes. But can say that it ran full capacity in Q3 FY 13.

• Order book –large open orders from OEMs. They are blanket orders. So correct number might not give true picture.

• Strategic holding by Tata Capital - they run private equity fund. They have close to 11% stake in the company. It also has a member on its board, who is also on the mgmt committee and audit committee.

• No new order from railways yet in wagons. Hopeful of getting more. Current orders in refurbishing. It has invested a lot in that.

• Braithwate orders - was executed from their factory in Q1 and little in Q2. The top up orders were executed in their factory.

• Plan to do 8K on a quarterly basis at new capacity.

• Growth in FY 14 (topline and bottomline) - no guidance possible now. Will give on Q4 FY 13.

• Margins in railway business more than in PV business.

• 20% from PAT as dividend policy - will continue.

• Interest cost was on lower side in Q3 FY 13. Debt and Working capital numbers have not changed in Dec 12 quarter from September 12.