Analyst Meet / AGM - Analyst Meet
Expects around 10-12% sales growth in FY 18
The company held its analyst meet on 29th May 2017 which was addressed by key management
Key Highlights
Execution continued to remain a challenge in FY 17 and management could have achieved better turnover but for issues such as delayed payments, right of way issues and work front availability. Infrastructure segment revenue growth was muted due to demonetization issues, liquidity and clearances which impacted the margins as well.
Government's thrust on infrastructure, defense and initiatives like GST, tax compliance, bank capitalization etc will aid in a sustainable order book and growth going forward.
Consolidated order book stood at Rs 261341 crore, up by 5% YoY. International order book constitutes around 27% of total order book.
Order inflow in FY 17 stood at Rs 142995 crore up by 5% YoY. International order inflow accounted for around 29% of total order inflows. Generally, the capex environment was muted. Water, heavy engineering, hydro carbon and civil orders were leading the growth.
Net sales for FY 17 were up by 8% YoY largely due to execution in international market. Higher sales and administrative costs which reduced the overall margins, was due to higher provisioning in financials and services businesses. Excluding services business, margins are up by around 50 bps.
Lower working capital requirements and better cash management aid the lower interest for FY 17. Management expects better working capital management to continue going forward as well.
Merger of subsidiaries and higher deferred tax lead to overall lower tax rate for the Mar17 quarter. While it's difficult to determine the going forward tax rate, but the company expects the tax rate will be somewhere around 30%.
The company has completely come out from the legacy orders in hydrocarbon space. Significant order wins in this segment in FY 17 provides good margin and revenue visibility in this segment.
Developmental projects saw a decline in revenues by 7% in FY 17 due to lower booking of revenues from Hyderabad metro project. Margins got impacted due to higher provisioning and additional costs.
While defense visibility is increasing, so far there are no orders in this segment. The company is not optimally utilizing its shipbuilding and nuclear facility that it has created for these orders.
Expects order inflow to grow by around 12-15% in FY 18.
Expects net sales growth of around 10-12% in FY18.
On margin front Q1 FY 18 margin looks good, margins will purely depend upon execution. Management expects atleast to retain the margins if not improve.
Powered by Capital Market - Live News