Transformer & Rectifier India Limited

(Abhishek Basumallick) #67

Key Highlights

  • June quarter was badly impacted due to GST issues and some orders getting held back. June FY16 quarter sales were significantly higher due to onetime export order.
  • Q2 onwards things are fine and improving.
  • Order book is around Rs 893 crore which translates to around 27000 MVA as on June 17.
  • Continues to expect net sales of around Rs 880-900 crore for FY 18 which means sales to pick up significantly going forward in FY 18.
  • Australia, Latin America, CIS countries and Iran are some of the key markets where the company has a strong presence in international market.
  • Enquiry levels are high from exports, from SEBs as also from industrial segment. The only worry is PGCIL which has offered less tenders on YoY basis.
  • Expects around 20% of sales from exports, 15% sales from industrial segment, 10% from Solar transformers and rest around 55% sales to come from utilities.
  • The company is the largest supplier to Metros for the transformer requirements and is present in virtually every Rail Metros in India.
  • Expects margins to improve on an annual basis. Continues to target margins of around 12% at operating levels in next couple of years. Higher capacity utilization, more matured competition, large export orders and cost control will lead to higher margins.
  • Solar transformer continues to do well. PPAs have come down but so as the cost of solar projects. While tenders have slowed down due to the pricing issues, expects orders to come back soon in this segment.
  • The company has successfully completed installation of one large transformer in FY 17. Expects around 10 such new orders by FY 18.
  • Borrowing is around Rs 200 crore with average interest of around 11%. Expects borrowings to remain at these levels despite higher sales due to better advances.
  • The company has received transformer orders from railways as well which have better margins.
  • Ferro Alloy market is picking up again and the company has received orders for supply of transformers to this segment.
  • Overall management continues to expect to perform well going forward and continue to remain optimistic and June 17 quarter was a one off.
  • Overall, with current capacity, the company can generate net sales of around Rs 1200 crore without any additional capex.

(Tushar) #68

Few updates since the last post on this thread
Q2 Results –

Order win from Power Grid of 127 crores

Interview at the start of FY18 by Chairman

Recent interview by CFO on Dec-05-2017

Few Observations

  1. Q2 results were better QoQ but were down on YoY .
  2. There are no export order yet in FY18.
  3. At the beginning of FY18, the guidance given was 15-20% increase in revenues that is around 920-950 cr. however it was revised down after Q1 to 880-900 cr and again after Q2 to 750-800 Cr.
  4. FY19 guidance is given as 10-15% increase in revenue.

Overall it seems the growth in transformer industry is further away than originally anticipated.

If anyone joined Q2 concall, kindly share your notes. I am not able to find audio clip for it.

(Manohar T. Patil) #69

(Tushar) #70

(Tushar) #71

Another bad set of results from Transformer and Rectifier India Ltd.

Highlights of conf. call

  1. Total orderbook currently 1049 crores. FY18 Guidance given as 700 crores. FY19 guidance given as 850 cr (conservative).
  2. Revenue was down in this quarter due to execution challenges mainly because of Technical issues. This is reason for lower revenue inspite of strong order book. Now the issues are overcome but this has resulted into inventory pile up.
  3. Concentrating more on industrial transformers. Executed orders of Mexico and Iran are working as expected. Inquiries are received from multiple geographies and focus is on exploring that. Orders received from Pakistan (Through some other vendor) and Russia.
  4. Major orders received are from Russia and there are negotiations with other russian firms. Order from Australia is executed except 1 transformer which is expected this month.
  5. 250 crores guidance for Q4FY18. Major is from Domestic orders. Out of domestic, Govt. orders form major chunk.
  6. EBIDTA for FY18 will be 9%. In FY19 it is expected to be higher 10-12%.
  7. There is recovery visible in private industry and demand from it. Current orderbook is above 100 crores from Private industries.
  8. Q1FY19 will be as strong as Q4FY18. Considering teething issues are now resolved, Whole focus is on executing the order book while getting new orders.
  9. Focus is on 2019 elections hence electrification will be done. More inquiries from State Electrivity boards. Once demand goes up, prices will go up and there are no new facilities are coming up in industry. More orders will be from Trains, Metros.
  10. Employee Cost is up due to hiring more people. Manpower is increased so that in future once order increase, capability is available to execute them.

Points noted:
Management keeps giving higher guidance and fails to meet it. [See articles published in above messages]. Will be watching results closely for next 2 quarters to see if they can improve in their execution capabilities and match given guidance before taking a decision.

If I have missed out on any points, kindly add.
@basumallick - Are you still invested here? If you are still tracking, kindly share your thoughts on last 2 results.

(Abhishek Basumallick) #72

I had booked profits precisely for the reason you have mentioned. The nos were coming through and the order book story was being constantly being peddled. I will relook once the nos get delivered.

(Tushar) #74

Planned jv is now terminated

(Sagar Bhadury) #77

Q1 Results

Net Sales 223.82 vs 131.50 YOY ( Sales up by 70%)
EDITDA at 16.69 Cr Vs 7.32 Cr YOY ( EBITDA up by 128%)
PAT at 2.43 cr vs a loss of 2.16 cr YOY
EPS at 0.18 vs -0.16 YOY

Overall a very good set of results considering the YOY figures.