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For the quarter ended March 2019, Va Tech Wabag reported a 35% fall in its consolidated sales to Rs 679.25 crore. Revenue de-growth driven by delay in realization and consequent startup from new projects.
OPM fell 280 basis points to 6.8% which saw OP fall 54% to Rs 46.31 crore.
Other income grew 4% to Rs 2.72 crore and interest cost rose 52% to Rs 24.02 crore. Net finance cost increase driven by higher working capital and interest rates. After providing for depreciation (down 7% to Rs 4.22 crore), PBT fell 80% to Rs 15.35 crore.
Taxation write back stood at Rs 18.61 crorea gainst provision of Rs 14.53 crore, after which PAT went down 46% to Rs 33.96 crore.
Share of profit/loss of associate companies fell 48% to Rs 47 lakh and minority interest stood at a positive Rs 6.34 crore against a negative Rs 3.77 crore.
Finally net profit fell 32% to Rs 40.77 crore.
FY 2019 results
In FY 2019, it reported a 20% fall in its consolidated sales to Rs 2780.96 crore. OPM fell 150 basis points to 7.0% which saw OP fall 33% to Rs 194.14 crore.
Other income fell 23% to Rs 4.35 crore (Dividend income earned from overseas projects included in previous year) and interest cost rose 31% to Rs 75.32 crore. After providing for depreciation (down 6% to Rs 16.79 crore), PBT fell 52% to Rs 106.38 crore.
Provision for taxation slumped 74% to Rs 20.49 crore (tax incidence fell from 34.9% to 19.3%), after which PAT went down 41% to Rs 85.89 crore. Tax refund order received w.r.t 80IA
Share of profit/loss of associate companies grew 30% to Rs 3.33 crore and minority interest stood at a positive Rs 15.80 crore against a negative Rs 15.54 crore.
Finally net profit fell 20% to Rs 105.02 crore.
Consolidated segment Performance
During the quarter Indian business contributed 36% of the total revenue. Revenue fell 3% to Rs 254.96 crore. PBIT jumped 574% to Rs 91.44 crore and accounted for 59% of total
During the quarter Rest of the World business accounted for 64% of the total revenue. Revenue fell 42% to Rs 445.46 crore. PBIT fell 68% to Rs 64.44 crore and accounted for 41% of total
In FY 2019 Indian business contributed 32% of the total revenue. Revenue stagnated at Rs 935.89 crore. PBIT grew 84% to Rs 187.23 crore and accounted for 30% of total
In FY 2019 Rest of the World business accounted for 68% of the total revenue. Revenue fell 24% to Rs 1972.39 crore. PBIT fell 28% to Rs 441.80 crore and accounted for 70% of total
Other details
The functional currency of VA Tech Wabag Su Teknolojisi Ve Tic. A.S (Subsidiary) has been changed from Turkish Lira to Euro effective April 01, 2018 since the revenues and financing activities of the Subsidiary are predominantly denominated in Euro. The financial statements of the Subsidiary reported in Euro have been considered for consolidation.
Effective April 01, 2018, the company adopted Ind AS 115 "Revenue from Contracts with Customers" using the modified retrospective transition method which is applied to contracts that were not completed as of April 01, 2018. The effect of Ind AS 115 adoption amounts to Rs 80.84 crore on standalone basis and Rs 58.42 crore towards overseas entities and the same has been adjusted against the retained earnings as at April 01, 2018.
Auditors' report
The Company has been executing certain projects in the states of Andhra Pradesh and
Tekulgana as part of a consortium. The Company took over the projects as consortium leader
in 2014-15 and a corporate insolvency resolution process was ordered against the erstwhile
consortium lead member Tecpro Systems Limited (`Tecpro') in 2017-18. The amounts
receivable from these projects of Rs. 41,556 Lakhs, which are net of expected credit loss
accounted as per Company's accounting policy, are recoverable progressively upon
satisfactory completion of the contractual milestones. The Company is also pursuing legal
action to recover an amount of Rs. 6,953 Lakhs from Tccpro and has filed an appeal with
National Company Law Appellate Tribunal. Based on the management's assessment, on
which auditors have relied upon and carried out audit procedures, there are no significant risks
in the recovery of the above-mentioned amounts.
Order book
Order intake stood at Rs 4787.56 crore.
It has order book of Rs 9291.90 crore including framework contracts of Rs 699.6 crore.
Guidance
For FY 2020 it expects sales to be in the range of Rs 3400 - Rs 3700 crore.
For FY 2020 it expects order intake to be in the range of Rs 5000 - Rs 5400 crore.
Valuation
The share price trades at Rs 288.
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