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Analyst Meet / AGM - Analyst Meet

Situation is looking more optimistic from Nov 17 onwards

Rishi Laser

13-Dec-2017, 05:02
In interaction with Mr Harshad Patel, MD on 13 December 2017.

Key Highlights

Situation is looking more optimistic from Nov 17 onwards, as sales increased to around Rs 11 crore as compared to around Rs 9 crore run rates per month for H1 FY 18.

Auto, Construction Equipment, Railways, special projects and electrical are driving the growth, while concerns remain on compressor, switch gear business and food processing side.

Railways continue to remain outperformer as there is huge demand for electrification, cutting, fabrication, assembling, body structure fitting, passenger body coach etc. Orders are coming from Metro and Indian Railways. However no demand exists for wagons. Further new players have also intensified the competition in wagons segment.

Construction equipment side is also seeing strong demand particularly demand of dumpers from Caterpillar. Caterpillar has planned entire 2018 calendar year purchase which is showing a decent growth.

On auto side the company continues to supply to Tata Motors. It's more or less a steady business.

Demand from project side business which includes special orders for railways, outsourced orders for body structure for railways, some prefabricated structure orders etc is also doing well.

Concerns remain on compressor order from Ingersoll Rand which remained at same level, as it was 4 years back. The entire segment is not showing growth and competition is killing the market share of the existing players.

The company will pay around Rs 1-1.5 crore as interest cost per annum post OTS with the bank. It would require around Rs 4 crore in next 2 years towards full and final payment towards the bank settlement.

For FY 18, expects net sales to be around Rs 110 levels. One needs to see how this H2 FY 18 pans out. This will form a strong base for FY 19, which should see good growth.

The worry is higher raw material prices particularly steel. The way how government is supporting the steel prices has resulted in higher steel costs. If it goes beyond this, then, one needs good economies of scale to gain leverage to absorb such higher costs.