Key takeaways of the conference call

Order book (including non wagon order book) of the company currently stands at Rs 1250 crore. Of which wagon order is about Rs 600 crore in value terms and 2300 wagons in volume terms. Of the total wagon order about 550 wagons were from Indian Railways (IR), 974 wagons were from defence and about 700-800 wagons from other sector. IR wagon orders are with material supply.

No export orders for wagons. Export order of foundry division excluding that of US orders is about Rs 30-35 crore. The export order of structural is about Rs 200-250 crore.

Q1FY16 results were little disappointing as there was sudden disruption in wagon production during the quarter. Not done any wagon production in May and June 2015. IR which managed to get lower price (predatory price) from a player for its 2015-16 wagon orders has forced other player to take that price for 2015-16 orders as well as earlier period orders outstanding, which was duly refused by the industry (established players). The company's original orders upto FY14 were already supplied and that orders diverted from other players only got struck up due this change in price thrusted by IR. IR after deliberation restored the price to original level for orders pertain to FY2013-14.

In 2015-16 wagon tender by IR the predatory player (new entrant) quoted Rs 10.80 lakh and bagged orders for 1800 wagons. As far as 2014-15 wagon tender is concerned the established players not ready to match the predatory price. IR offered last year price which is also refused by established players as it is still less than the reasonable price. The company as well as other established players wanted a reasonable price and the IR is yet to take a call and place orders.

Despite disappointing Q1FY16 the company is hopeful for better FY16.

Hydro mechanical Equipment division – Despatch could not be done during this quarter due to Nepal earthquake. Starting despatch from Q2FY16 as roads to some extend got repaired.

Foundry – meeting own wagon, export orders and least is other wagon builders.

Wagon procurement for 2015-16 will be better than the last 2 years that is 11500 wagons and 8500 wagons respectively in FY14 and FY15. Only once the tender is out the exact numbers will be known.

Defence Wagon – Execution of 974 defence wagon order has started and it will pick up in the coming months. For the first rake currently got the IR clearance and defence clearance is awaited. The First rake of 38 wagons will be dispatched in July 30, 2015.

Outstanding orders pertain to years prior to FY2014-15 Quantity not supplied and outstanding is 550 wagons and revenue loss is Rs 650 crore.

The export of Bridge girders for Bangladesh has commenced during the quarter. US market exports orders will start from Sep 2015.

The Coal India wagon requirement of 5000 wagons in 3-4 years will be routed through IR and will come in with in this year.

Working on metro opportunity the company has put in ground work but the company has no orders to show off. The company can't participate on its own and will bid in JV with technology from the partner.

Until merger of Kalindee merger and metro opportunity materialize there won't be any major expenditure.

Wagons supplied by the company in FY2014-15 are 1900 wagons and the value if it was Rs 320 crore .

Margins of bridges, HME and steel foundry the margin are different with the margin of latter depend on the industry. Margin of non IR will be better than IR orders.