Order book for CY 2015 is up in early double digits. While irrational bidding has stopped, competition continues to remain a challenge. MNC companies are increasing their capacities in India and are preparing themselves for the Make in India model.
Almost entire order of Nuclear Pump is completed in CY 2014. While enquiry is going on, management expects some more orders to receive in the later part of the CY 2015 year.
Management expects orders to come in from Power and Mining sector in the later part of the year. Recent coal auction will result in some activity in mining space. While big orders from Nuclear Power and from Renewable Power can also be expected by the end of calendar year 2015. The company has all the necessary technology and capability to execute the same. Maximum localization is already in place for the company.
There were some one time expenditure related to Nuclear Pump order and other expenditure which were booked in P&L instead of being capitalized, in Q1 CY 2015. All these led to severe pressure on OPM in Q1 CY 2015. Management expects margins to come back on track from Q2 CY 2015 onwards.
Parent will continue to decide on export prospects of the company. While potential for India continue to remain high and Parent sees the Indian subsidiary predominately to use its capacity for Indian market, it is open for exports. In CY 2015, if domestic market execution remains muted, exports will pick up and the company will receive higher export orders from the Parent.
Management did not comment on any buy back plans or open offer etc from the Parent.
Overall, management expects to recover and come back strongly in rest of the CY 2015.