Ion Exchange hosted a conference call on Jan 29, 2018 to discuss the performance of the company for the quarter and nine month ended Dec 2017. In the conference call the company was represented by Aankur Patni – Executive Director; N.M Ranadive – Executive VP – Finance; Vasant Naik – Sr. VP – Finance; and Milind Puranik – Company Secretary.
Key takeaways of the call
Engineering order backlog excluding large Sri Lankan order is about Rs 550 crore and the company has booked orders worth Rs 150 crore in Q3FY18.
Sri Lankan order execution is going on and out of that order the company has booked a revenue of about Rs 32 crore during the quarter ended Dec 2017. In H1FY18 it has booked a revenue of Rs 42 crore taking the overall total to about Rs 74 crore in 9mFY18. The company now expects revenue recognition of about 15-18% of the SL order value in current fiscal against the initial guidance of about 20%. The project is expected to be completed by May 2020. So the ramp up of execution and revenue recognition is expected to happen in next fiscal. The company has booked revenue worth about Rs 150 crore as end of Dec 2017.
The company currently has an order bidding pipeline of about Rs 4000 crore.
Engineering off-take in first two months of Q3FY18 is not commensurate to the capacity of the company affecting the margin, but with ramp-up happening from Dec 2017 onwards the margins are expected to be better in Q4FY18.
Individual orders from pharma industry is not large even though the company continue to cater to the industries need including launching new products.
The company in Oct 2017, has commissioned a new Reverse Osmosis Membrane Manufacturing Plant at Verna Industrial Estate, Phase IV, and Goa at a cost of Rs 50 crore. The unit will manufacture eight inch size 1000 membranes a day. Production of this plant will be ramped up by 2018. The plant is set up to cater to both captive requirement as well as the external market for membranes in India as well as international market. Revenue expected out of this plant will be about Rs 30 crore.
The company is expanding capacity on Chemical business and the total capex for the year would be roughly around Rs 30 crore.
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