Geography proportion to sales -> I am not clear on exact sales which come from non india operations for PEtron. But have not heard anything like africa from them…
Petron boasts of a rich client base that includes the likes of Adani Power, Relianc ADAG, Reliance Industries, Nagarjuna group, ACC, Sterlite Industries, Dangote Group (Nigeria) and so on.
I was just going through result and have some questions. It would be nice if someone can ask in conference call…i feel Ayush attends conf calls…
1). Other expenses has been doubled for the last 2 quarters?
2). What happened to amount outstanding from Reliance power and Lanco
3). Employee expenses has been increased by 1 cr. I feel it is because of new employee addition ( I had seen add in ascent for technofab recruitment last week(40 eng req for 3-10 exp and 10 mgr req for 15 yrs exp) it seems they are expanding.)
4). Company increased it’s revenue but bottom line impacted by -10% around
Regards,
Milind
Sure, will keep them on mind if i attend the concall
Did the proposed meeting with the management happen?
Yes the meeting did happen in june. Although co. had guided for 20%+ topline gowth (which they have reiterated in their recent investor update-kindly refer to BSE announcements on the stock ), they expected bottom line to be flattish for FY13.
Slowdown in order inflow, co. turning net debt (from earlier debt free status), and overall investor apathy towards infra sector has not augured well for the co.
For the record, Valuepickr scorecard has recommended an EXIT in their recent Dec update.
How to access the Valuepickr scorecard please?
Key takeaways of conference call as per Capital Market.
The company was represented by Arjun Gupta, Director and Arun Kotcha, Vice President.
Revenue for the quarter ended Dec 2012 was higher by 9% to Rs 105.06 crore and with operating margin contracting to 11.9% (from 12.7% in Q3FY12) the growth at operating profit restricted to 2% to Rs 12.45 crore. On the back of lower other income, higher interest and depreciation cost the PBT was lower by 24% to Rs 9.84 crore. Eventually the net profit was lower by 26% to Rs 6.4 crore.
Sales for the 9mFY13 was higher by 18% to Rs 287.34 crore with 51% of the revenue coming from overseas contracts. Moreover about 37% of the revenue comes from water, 33% thermal, 14% from oil & gas, and 3% from electrical, 12% from industria and balance others. But with OPM skid by 50 bps to 12.2%, the operating profit was higher by 13% to Rs 35.03 crore thanks to higher sales. The growth at net profit was lower by 10% to Rs 19.42 crore.
Fresh orders from Power and industrial sector, the traditional focus area of the company virtually dried up and there is lack of opportunity in these sectors now. Moreover some of the ongoing jobs, particularly in the power sector have also either slowed or halted.
Company’s market diversification strategy started paying off and thanks to that it has bagged fresh orders to the tune of Rs 477 crore in FY2013 (as end of Jan 31, 2013). Of the order intake about Rs 171 crore is of domestic electrical sector orders, Rs 248 crore of overseas water sector orders and Rs 58 crore of overseas industrial infra orders. Moreover orders worth Rs 350 crore are in sight. Majority of the fresh orders are from sectors and geographies where the company had little or no business till recently. Of the likely order inflow of Rs 350 crore about Rs 250 crore is of domestic order and balance is international order.
Order book as on date stands at Rs 1125 crore and of which thermal power orders stands at 23%, nuclear power at 2%, water 37%, industrial 12%, oil & gas 8% and electrical 18%. Of the total order book about 60% is overseas orders.
The company is not looking at civil construction projects. The diversification is largely into areas other than power such as water etc and geography.
The company is also refraining from taking large EPC orders and subcontracting it to other players as no in-house expertise.
In water space, the company competes with Vatech Wabag, IVRCL, Gammon in India and globally with lot of Chinese companies.
Majority of overseas projects are from Government agencies/public sector and funded by World Bank. KFW, African bank funded projects. Exception to this is the jobs from Ghana and Bangladesh, which are private sector orders funded privately. Of the two Ghana projects one is completed and the other is yet to achieve financial closure. Work is yet to commence in case of Bangladesh order.
Mozambique order â Currently the work in progress stands at Rs 21 crore. This is largely on account of payment model of this project. â Supply part can’t pay separately unlike other EPC jobs. The supplies are paid with construction crossing milestone.
Tanzania the company has just started the work and not booked any revenue from this project.
Order book - execution cycle of 2 years.
Expects to close current fiscal ending March 2013 with a sales turnover of Rs 430-450 crore. And for FY14 the sales are expected to grow over 10%. The company though optimistic on being able to sustain revenue growth, the profit margin is expected to see sustained pressure due to depressed domestic market and intense competition.
Cash balance as of Dec 2012 is Rs 54 crore. Margin money is Rs 36 crore. Investment in mutual fund is Rs 44 crore. Bank debt is Rs 40 crore.
In power sector currently project activities are largely happening only in public and SEBs side with little activity in private sector. Some consulting companies are currently engaged in project proposal for SEBs.
Any one attended AGM of this?
Stock has fallen quite a bit. At CMP of 65 all negatives appear to be priced in. MAybe time to take a fresh look at this one
any thoughts on this stock…??? any sense on when the impact of the slow moving offshore order will be over?
CONFERENCE CALL - from Capital Markets
Expects 20-25% growth in sales for FY17
Technofab Engineering held a conference call on May 31, 2016. In the conference call the company was represented by Arjun Gupta, WTD and Arun Kochhar, VP Corporate Affairs.
Order backlog at the beginning of April 1, 2016 was Rs 1250 crore and of which about 79% domestic PSU/Government/government funded orders, 2% private domestic orders and 19% are overseas orders funded by multilateral agencies.
The company bagged one order worth Rs 32 crore in May 2016. In addition the company is L1 in orders worth Rs 250 crore. Target an order intake of over Rs 1000 crore in current fiscal.
H1FY16 was relatively lean interms of enquiries and bids. Situation though improved in H2FY16 with the company well placed in several bids, only four orders including one from overseas got placed and the release of more orders is spilling to the first quarter of FY17. Overall bids worth Rs 5000 crore in both domestic and overseas markets are pending. The company is confident of a decent flow of fresh orders in FY2017.
The company expects 20-25% growth in sales for FY17. The company is confident of maintaining FY16 EBITDA margin in FY17 as well.
Continue to struggle with cash flow issues. Formal closure of jobs that are virtually completed are getting deferred largely in orders from power and industrial sector. So the company could not collect the retention money back. Pressure on cash flow has been compounded by peculiar payment terms in some of electrification orders which is resulting in increase of inventory. These two problems is anticipated to be resolved in the current fiscal.
Of the total receivables of Rs 302 crore, receivables more than 6 months are Rs 123 crore and balance are less than 6 months. Of the Rs 123 crore of receivables about 85-90% is retention money. The company has not classified outstanding of Rs 6 crore from Lanco Infratech which is quite old as bad debt as its hopeful of collecting it.
The company’s traditional power and industrial sectors is not expected to see early revival and the main opportunities in the next year or two will come from domestic water sector which is poised for a huge impetus on account of urban renewal and river cleaning oriented action plan. Similarly the power distribution and rural electrification sectors, including substations will also continue to provide ample opportunities.
In overseas market the company continue to vigorously pursue opportunities in all sectors in sub Saharan Africa and in nearby SAARC countries, with particular focus on funded projects. Of the pending bids worth Rs 5000 crore about Rs 2500 crore is from Africa.
The company has 3 large rural electrification projects in Bihar, which are funded by REC. However on completion of electrification, the project taken over by client is taking time. This makes the execution cycle longer leading to cash flow issue. Though the company has raised bills for the job executed, that is not paid on account of this reason.
Long term borrowing is Rs 5.5 crore and short term debt is Rs 87 crore. Cash on hand is Rs 51 crore.
In terms of vertical about 63% is electrical projects, water 28%, industrial 2%, oil 3% and power sector 4%. Out of total FY16 sales about 20% is from overseas.
Liberia Project - With the country declared Ebolo free the company has remobilized and work there is now in full swing. The company is has started billing regularly.
Margin improvement is a function of the company improving its project execution efficiency in verticals such as rural electrification, selective bidding with decent margins. The company is now executing fewer projects of higher size with the same human resource rather than lot of smaller projects.
Confident of order intake of Rs 1000 crore in FY 2017
Highlights:
Can anyone throw some light on the contingent liabilities? Why are they increasing for past few years?
