Skipper Q1FY18 Concall Summary

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

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

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%

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

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 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

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

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.

Q1FY18 Concall Transcript

Q1FY18 Investor ppt

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