• Income from operation excluding other operating income was higher by 86% to Rs 582.89 crore but the value of production for the quarter was higher by 92% to Rs 627.09 crore.
• The company that started the current fiscal with a strong order backlog of Rs 5773 crore seems to have got the benefit of strong burnout of order book. Over and above order mix it seems the margin got impacted as relatively more projects at initial stage not crossing revenue recognition during the quarter compared to corresponding previous period. Since there is no commensurate increase in revenue for the expenses on such projects that are in initial stages, the overall margin got suffered. This was reflected by value of production higher than sales. Strong growth in topline seem have come from the major order currently under execution i.e. the 2000 MW Subansiri Lower Hydel power project in Assam/Arunachal.

• Operating margin crashed by 1150 bps to 7.4% with sharp rise in material cost which as a proportion to sales net of stocks was higher by 2410 bps to 62.1%. Though the staff cost and other expenses have came down sharply by 510 bps (to 17.5%) and 780 bps (to 13.6%) respectively that is not good enough to offset the rise in material cost. This exerted pressure on margin.
• On segment level, both power as well as transport has registered subdued performance. While the segment PBIT of power was down by 22% to Rs 33.18 crore that of transport registered a loss of Rs 90 lakh (compared to profit of Rs 5.84 crore in the corresponding previous period).

• Other income was higher by 17% to Rs 10.09 crore gained from spike in interest income. The interest cost was nil for the quarter as well as corresponding previous quarter. The depreciation was higher by 8% to Rs 12.06 crore. Thus the PBT was down by 25% to Rs 42.30 crore.

• The taxation in absolute terms was lower by 30% to Rs 13.72 crore but the tax incidence was lower at 32% compared to 35% in the corresponding previous period. This has limited the degrowth in profits to 23% at netprofit level to Rs 28.58 crore.

Half yearly performance

Sales for the period were higher by 33% to Rs 887.86 crore. Operating profit was lower by 55% (to Rs 49.45 crore) as operating margin contract by 1090 bps to 5.6%. Other income was higher by 61% (to Rs 26.37 crore) and depreciation was up by 9% to Rs 24.20 crore. The interest cost was nil for the quarter as well as corresponding previous quarter. As result the PBT before EO was lower by 50% to Rs 51.62 crore.

Taxation (including deferred tax and Fringe benefit tax) was lower by 53% to Rs 16.74 crore. And thus the net profit was lower by 49% to Rs 34.88 crore.

Demerger of Boiler business to 100% subsidiary

The company decided to demerge its boiler business to ALSTIM Boilers India (ABIL), a wholly owned subsidiary of the company. The Board of Directors (BoD) of the company at their meeting on Oct 25, 2011, has approved the demerger with appointed date of April 1, 2011 subject to other statutory approvals. Given the approval of BoD for demerger of boiler business, the same is considered as 'Discontinuing Operations' with effect from the appointed date. The Statement of Assets and Liabilities as at September 30, 2011 includes an amount of Total Assets of Rs 511.53 crore and Tota1 Liabilities of Rs 472.88 crore relating to discontinuing operations.

The results for the quarter ended 30 September 2011 include revenue of Rs 159.19 crore, expenditure of Rs 143.52 crore, profit before tax of Rs 9.67 crore and tax expense of Rs 3.14 crore in respect of the discontinuing operations. Similarly the financials of H1FY12 include revenue of Rs 238.49 crore, expenditure of Rs 236.78 crore, profit before tax of Rs 1.7l crore and tax expense of Rs 55 lakhs in respect of the discontinuing operations.

As discontinuing operations are effective from 1st April 2011, prior year/ period comparatives have not been given.

Other developments

Alstom Projects India has won three hydro power contracts aggregating above Rs 270 crores (over €40 million) in July 18, 2011. The first contract is from Shiga Energy Pvt Ltd for the 97 MW Tashiding hydroelectric project based in West Sikkim district on the Rathang Chu river. The second contract is from NSL Tidong Power Generation Pvt Ltd for the 2X50 MW Tidong 1 hydroelectric project in Kinnaur District in the State of Himachal Pradesh. The third one is from Haridwar Infrastructure Private Ltd for the 96 MW Dikchu hydroelectric project on the river Dikchu, a tributary of Teesta River in East Sikkim.

The company in Nov 3, 2011 has also bagged a contract from International group, Isolux Corsán to supply gas turbine equipment and associated services for a 180 MW simple cycle gas-fired power plant in the Khulna district of Bangladesh for the North West Power Generation Company Limited (NWPGCL). The plant will be based on Alstom's GT13E2 gas turbine and will be capable of running on both gas and diesel, thus reducing any uncertainties in fuel supply.

Promoter share holding stands unchanged at 68.46% as end of Sep 2011 in relation to sequential previous quarter as well as corresponding previous period.

The stock hovers around Rs 526.15.