CONFERENCE CALL - from Capital Markets
Kalpataru Power Transmission and JMC Projects
Both expect net sales growth of around 15% in FY’17
The company held its conference call on 11th February 2016 and was addressed by Manish Mohnot, Managing Director
As on Dec’15, company has consolidated order book of above Rs 13200 crore. KPTL has order book of around Rs 7000 crore including new orders worth over Rs 1400 crore received during Dec’15 quarter. JMC has standalone order book of Rs 6200 crore with order inflow in excess of Rs 1100 crore.
As on today the KPTL standalone has an order book of Rs 8000 crore. The company has never gone beyond Rs 6500 crore of order book in the recent past.
Softening commodity prices together with delays in conversion of orders received, impacted the T&D segment in Dec’15 quarter. Infact as per the management, 80% of the decline in T&D segment is due to steady state decline in order book position at the beginning of the year.
However with current order book position and L1 position of more than Rs 2000 crore, the company is confident of good Mar’16 quarter and around 15% growth in net sales in FY’17, after factoring in the lower commodity prices.
Margins for FY’17 of KPTL are expected to remain around 10-10.2% level for T&D segment.
Of the total order book of KPTL, around 30% are fixed price contracts.
Infrastructure segment has Rs 1000 crore of L1 order book which will further improve visibility of the segment for FY’17.
Domestic T&D order inflow in first 9 months stood at around Rs 3000 crore. Orders from PGCIL and from Pvt Players were seen. The company has participated in excess of Rs 5000 crore of tenders.
Internationally the orders are from South Africa and Middle East geography and there are no any delays due to lower oil prices.
Management believes momentum to continue in FY’17 as far as orders inflows are concerned.
For JMC, management expects sales growth of around 15% for FY’17 given the order book and L1 orders in excess of Rs 1000 crore. The company is confident of around 8.5% margin going forward.
All 4 BOT Road projects of JMC are operational as on date and the company is earning around Rs 50 lakh a month as toll collection. It needs around Rs 69 lakh a month to breakeven at cash level. A total of another around Rs 35 crore will be required for the BOT projects in FY’17.
For Shubham Logistics due to internal restructuring, the company had to take back step from its planned IPO. Due to lower agriculture commodity prices, warehousing got affected particularly in MP and in Maharashtra region.
Also some key personnel had left the company and new recruitments and internal reshufflings are on. As per the management, there are no near term plans for the IPO.
For 9 months ended Dec’15, net sales of Shubham stood at Rs 197.40 crore as compared to Rs 228.5 crore YoY. The company reported loss at PBT level of Rs 27.80 crore as compared to a profit of Rs 12.80 crore for 9 months ended Dec’14.
Total debt at standalone KPTL level stands at Rs 680 crore and at consolidated level, debt stands at Rs 3400 crore.
Of the Rs 180 crore invested in Thane Mall project, around Rs 60 crore received so far to Dec’15.
Railways are seeing lot of tender moments and lot of tenders are floated and management expects huge order book coming in next 6 months in this segment.