The company held its conference call on 14th Aug 2015 which was addressed by Mr. Prayasvin Patel CMD and Mr. Rajat Jain CFO
Key Highlights
Company bagged orders worth Rs 140 crore in June'15 quarter in Gears division domestically, and total order book position as on June'15 stood at Rs 260 crore as compared to Rs 285 crore in June'14.
As per the management, while there are lots of enquiries going on, yet the conversion of those enquiries into concrete orders is taking time. Further, there are delays and deferments happening in existing orders. As per the management while it will take another around 6 months time for things to improve, concrete action needs to be taken by the Government and management is hopeful of the same.
Of the total consolidated revenue of around Rs 257 crore, about Rs 97 crore is from Indian Gear business, Rs 89 crore from Material Handling Business (MHE), about Rs 71 crore from International Gear business. At Ebidta level, Indian Gear business reported around Rs 22 crore of Ebidta, International gear around Rs 7 crore, while there was a loss at MHE division.
MHE division sales were lower by about 14% to Rs 89 crore YoY and the segment reported a loss of about Rs 8.5 crore at PAT level. Lower execution is predominant reason of losses. Going forward management expects things to improve in next couple of quarters; however it's difficult to give any timeline for the segment.
As per the management, there are not much tenders floating around for mining activities. Both public and private sector are taking time and delays are seen. There is no concrete action happening at the ground level at the current juncture for mining sector.
MHE has an order book of around Rs 1100 crore as on June'15. The company expects another Rs 1000 crore of orders to come in, provided some tendering and business activity starts.
As per the management, already activities have started at underground mining activity, where Eimco Elecon is present. Some orders for Tunneling, which is a pre requisite for mining activity, especially from private players who had won the coal auctions, is already received by Eimco Elecon. Gradually orders for conveyors, components, gear boxes etc should start in next 6 months if the mining activity picks up.
The international gear business has turned around in June'15 quarter. The strategy of the management to transfer all the manufacturing process to India and then subsequently to export to these countries and to use the subsidiary more from marketing and after sales and service business, has started yielding results for the company. Management expects the subsidiary to continue to do well. It has an order book of around Rs 150 crore as on June'15.
The consolidated debt as on June'15 is around Rs 500 crore.
For FY'16 management expects consolidated net sales to grow by around 10%. However all depends upon how the dispatch and delivery and execution of orders happen during the year.
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