The company held its AGM on 15th Sep 2017 and was addressed by Mr. Rajesh Sharma CMD
Key Highlights
In short term GST related issues continue to hurt the business. Most of the orders in engineering space are from government or semi government bodies and there are some issues on as to who will bear the tax increase due to GST on the final billing. So while discussions are going on, yet clarity is awaited.
As far as company is concerned it will bill the orders in hand with GST and expects the government bodies to accept the same and accordingly release the payment.
Nothing much of ordering activities happened so far in Sep 17 quarter.
The Srilankan order is very much on track and revenue recognition will start from Sep 17 quarter onwards, which will save the whole FY 18. The order has better margins and payment terms than the international orders. Around 30% of order value of around Rs 100 crore will be booked in FY 18 while rest will be in FY 19.
Lower execution and product mix can lead to some margin pressure in near term.
The company is the only company with one stop solutions for water in India. The company is planning to introduce surface water treatment solutions by closely working with Public Health Engineering Departments (PHEDs) and Rural Water Supply Departments of various states.
In Railways, the company so far has supplied 7 plants for the Rail Neer water bottles. A further tender of 5 plants will be awarded by the railways in FY 18.
Around Rs 3000 crore worth of tenders are floating around in water projects related to cleanliness and management.
Internationally the US subsidiary will be in green in this year itself and expects the rest of the subsidiaries to be in green by FY 19, unless any geopolitical issues occur.
Company's subsidiaries in Philippines, Srilanka, Indonesia and in Africa are in losses due to lot of country specific issues. Changes in government in Philippines and Srilanka have lead to delay in execution of the orders. Africa is a huge market, but payment issues have led to lower order book for the company.
Chemical and resin business continues to remain strong with good margins.
No plans of hiving off the consumer product segment. Expects the segment to break even in the last quarter of FY 18 but otherwise, losses is expected to continue in this segment.
Expects to get out of the trade to trade segment by end of FY 18.
Overall from a long term prospective the company is very bullish in all the 3 segments. With the turnaround in international subsidiaries to happen, management expects the company to do significantly well in long term.
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