Key takeaways of the conference call

The Order backlog as end of Jun 30, 2014 stood at Rs 286 crore compared to Rs 266 crore as end of Jun 2013. Order inflow in Q1FY15 was Rs 118 crore for gear business.

Order backlog of Elecon EPC Projects (EPL) and Benzler-Radicon Group as end of Jun 2014 stood at Rs 1080 crore and Rs 79 crore respectively.

Order flows for small-medium gears are yet to pick up but the company is getting orders for tailor/custom made gears. The orders flow mix has now changed for 60% of tailor made and 40% for standard gears compared to earlier levels of about 65% in favour of standards and 35% in favour of custom made.

Elecon Engineering, the standalone company expects order intake of atleast Rs 400-500 crore for balance 9 months of current fiscal. EPL for the same period expects an order intake of Rs 500-600 crore.

Expects standalone revenue of Rs 600 crore for current fiscal, translating into a growth of 20%.

Debt at standalone level as end of June 2014 was Rs 242 crore and EPL books it's was Rs 203 crore. The interest cost is about 12.1%. During the first quarter the company paid term loan of Rs 40 crore and working capital loan reduced by about Rs 50 crore.

Consolidated receivables was about Rs 979 crore of which about Rs 676 crore at EPL and about Rs 303 crore is in case of standalone. The company thinks that about 80-90% of the outstanding receivables of Rs 90-95 crore supplied through Tecpro Systems are recoverable with clients directly in touch with the company. As of now the company has not provided for outstanding receivables and if the company ascertains any of it as bad it will provide for the same.

Benzler-Radicon Group has registered a revenue growth of 20% in Q1FY15 but at bottom-line it was a loss albeit negligible level as the company chased top line growth and market penetration at the cost of margin. However the company will end with a revenue growth of 25-30% for current fiscal with bottom-line in black.

The company has made substantial investment during boom time. During the recession period it has cut cost massively including rationalization of manpower. Currently the company operates at about 35-40% of the desirable capacity levels. Once the market picks up and turnover increases the margin will expand substantially.

Elecon Engineering has not yet got the Rs 130 crore on account of slump sales of EPC business as part of demerger approved as the EPL itself is hard pressed for liquidity.

Standalone sales for Q1FY15 was down by 8% to Rs 102 crore and the EBITDA was up by 3% to Rs 23.45 crore with EBITDA margin expand by 280 bps to 24.7%. However the PAT stood lower by 62% to Rs 1.25 crore hurt largely by higher depreciation on account of change in depreciation calculation as per new Companies Act.

Sales of EPL in Q1FY15 were Rs 104 crore (vs. Rs 88.2 crore in Q1FY14) and the EBITDA was Rs 9.45 crore (vs. Rs 9.17 crore in Q1FY14). At PBT level it was a loss of Rs 1.48 crore (vs. a loss of Rs 1.65 crore in Q1FY14)

Consolidated sales in Q1FY15 stood at Rs 292 crore (vs. Rs 272 crore in Q1FY14) and the EBITDA was at Rs 31 crore (vs. Rs 33 crore in Q1FY14).