Skipper Q1FY18 Concall Summary


Financial Highlights

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  • Successful migration to Ind-AS
  • Sales increase by over 40%
  • Gross sales to INR 432.72 crores from INR 309.8 crores
  • Revenue growth of 40% because of undelivered production from Q4 which contributed to 20% 
  • Growth led by strong volume executed in engineering product business on both domestic and international frontas well sales of undelivered production
  • EBITDA increased by 31% from INR 39.33 crores in the previous year to Rs.51.61 crores
  • PBT increased to INR 24.76 crores from INR 15.49 crores indicating a growth of 52%
  • Long term borrowing around Rs.200 crores
  • Reduction in engineering segment PBIT margins because it is calculated from gross and not net revenue
  • Volume growth of 15-17% only for the engineering division
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Order execution/ projects

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  • Orders in excess of Rs.350 crores for transmission towers and poles supply
  • Orders from PGCIL for 800KV Raigarh-Pugalur HVDC project
  • Production executed from existing Uluberia plants and products to be manufactured
  • Two landmark EPC projects for PowerGrid and RRVPN making Skipper eligible to bid and win new EPC projects
  • Order intake of Q1 of about Rs.350 crores
  • Good order inflows from Telangana TRANSCO, Andhra TRANSCO and Uttar Pradesh Power Transmission Company
  • Order book size at the end of Q1 FY 2018 is Rs.2640 crores
  • Dilution of order concentration to 47% for PowerGridwhich contributed about 50-51% of total revenue of Skipper Limited

Polymer division

  • Confusion among partners on whether to hold stocks and credits
  • Profitable revenue growth of atleast 15% on topline basis
  • Consistent margin of 13% plus in current year

Increase in steel billet prices 

  • Increase in steel billet prices accommodated through price escalation and de-escalation clauses in majority of orders (inclusive of export orders)
  • Increase in steel billet prices of 15%

Monopole business

  • Revenue from monopoles below 5% but expecting it grow as the revenue grows in overall product mix
  • Monopole easily adoptable for 132 and 220 kV lines for intrastate projects with demand expected to increase with smart cities
  • Small entrants not likely in monopoles as the requirement of setting up galvanizing plant is very
  • Capex plans for FY18 is about Rs.85 crores out of which Rs.60 crores will go to increasing the capacity and Rs.25 crores go towards tower testing station

Solar structure manufacturing

  • Government of India planned to ramp up solar capacity to total one lakh megawatt
  • Additional lines are being installed for which a budget of Rs.30 crores
  • Requirement of 40 tonnes of solar structure
  • Trial production completed
  • Offer to developer sourcing structures for the project or through EPC contractor who will be winning the projects from developers

PVC Pipes 

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  • PVC segment sales: 90% from retail and 10% from project which could change to 60% from retail and 40% from projects as there will be a direct participation from Skipper in project sales
  • Utilization level at 50% of capacity
  • GST effect on PVC causing a muted growth

Execution cycle

  • Reduction in execution cycle from a range of 2-2.5 years to 1.3-1.4 years
  • Majority of demand driven by renewable sources of energy which have a shorter execution cycle as compared to thermal sources
  • Projects are mostly on TBCB basis which have high penalty clauses and hence TBCB operator generally focuses to complete as per schedule
  • No change in receivable and inventory
  • Faster contract closure

Customer sectors

  • Power
  • Telecom towers and telecom poles
  • Lighting
  • Future: Rail electrification


Skipper Q1FY18 Debt trends.png
  • Overall debt of Rs.200 crores
  • Overall cost of debt is 8% to 9%
  • Overall interest costs increase from Rs.12.4 crores to Rs.16.9 crores which is a decrease from Rs.17 crores as compared to the corresponding quarter from previous year
  • Out of the Rs.16.9 crores, Rs.15 crores towards interest and the rest to commission and charges
  • Depreciation in Q1 FY2018 is Rs.10.75 crores and it is Rs.6.75 crores in FY2017
  • Higher export execution from 15% to 20% causing increase in costs related to freight and packaging


  • Hedging the export receivables against foreign currency loans through forward contracts
  • Imports are hedged via LC or through buyer’s credit
  • Even though there is a nominal forex gain of 10 million due to the Ind-AS implementation all the forex gains have to be accounted for on the basis of closing balance sheet approach.