Skipper Q4FY17 Concall Summary

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Financial overview for FY17

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  • Net sales up from Rs.1462 crores to Rs.1678 crores
  • Operating EBITDA grown to Rs.226.71 crores as against Rs.201.11 crores in previous year
  • Operating EBITDA margins at 13.5%
  • PBT increased to Rs.156.62 crores as against Rs.143.3 crores in the previous year
  • PAT has grown by 17.2% to Rs.111.5 crores from Rs.95.13 crores
  • Debt equity ratio improvement from 1.24 to 0.89
  • Largest Tower Supplier award by Power Grid
  • Addition of Guwahati plant leading to a total capacity of 2,30,000 tonnes per year

Financial overview for Q4FY17

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  • Net sales grown by 8% to Rs.564 crores as against Rs.522 crores
  • Operating EBITDA up by 2% to Rs.74.87 crores from Rs.73.41 crores
  • PBT up by 32.3% from Rs.52.64 crores to Rs.69.67 crores
  • Debt reduction by Rs.30 crores with growth of business volume by 15% leading to a relative growth of Rs.68 crores
  • Reduction in debtor number of days from 85 days to 75 days

Operation overview

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  • Utilization of 90% in engineering products and 55% in polymer segment
  • Increasing market geography to reduce impact of competitive pressure and reduce exposure from markets where margins are reducing
  • Value growth of 30%
  • Inventory has increased from Rs.250 crores to Rs.370 crores due to volume growth in engineering products business, reduction in sales growth and large export execution
  • Increase in channel partner from 1500 to 3500 to increase footprint

Order book

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  • 28% of order book is exports, 51% is PowerGrid and approximately 21% is from other domestic sources and private developers
  • Order inflow of approximately Rs.900 crores and for the full year it was Rs.1400 crores
  • Opening order book was Rs.2400 crores and have closed at Rs.2600 crores
  • Order inflow of Rs.505 crores in engineering product segment
  • In engineering product segment, Rs.505 crores of order out of Rs 505 Cr of new orders ,Rs.375 crores are from domestic sources and about Rs.125 crores are from international market
  • Bidding order company has participated in but awaiting results is Rs.1300 crores
  • Out of Rs.500 crores, Rs.150 crores L1 orders

North east

  • Received projects from PowerGrid under the Northeast regional infrastructure system plan
  • TBCB projects coming up in good number
  • Cross border transmission lines between Nepal and India
  • Target of 50% utilization in the first year

Profitability/ Revenue

  • Better in engineering products due to income from forward contracts to the tune of Rs.16 crores
  • 8% to 10% of revenue is export

New markets

  • Entry into new markets in Botswana and Philippines
  • Botswana is a high growth area where there are lot of transmission projects being tendered out
  • New government is focused on power investment in Philippines and securing of the first contract in Philippines
  • Mexico market opened up with approval from LatAm which is the engineering division of the central electricity authority of Mexico, CFE. 
  • Targeting countries in African continent as well as SouthEast Asia
  • Uttarakhand: Back-to-back 2 orders
  • Tamil Nadu, Telangana and UP expected to do well

Expenses

  • Reduction of tax credit from 32% to 22.4% because of availing MAT credit entitlements which has had an impact of Rs.6 crores
  • Higher employee benefit expense: Growing capacity in different PVC plant and new Guwahati plant required a lot of recruitment
  • Total CAPEX of Rs.85 crores of which Rs.60 crores is for both businesses put together and Rs.25 crores is for setting up tower testing station
  • Increase in capital employed: Telangana plant and activities for Guwahati plant had begun, increased volume and reached a capacity of 48000 metric tonnes

Tower sale at 7% growth:

  • Overall growth of engineering products segment has been at 9% on Y-o-Y
  • Execution largely domestic with no advantage on freight value
  • Volume growth of 13-14% translating to a value growth of 9%

PVC Pipes

  • After demonetization, some months of stagnancy post which in February things have been back to normal
  • Kolkata consistent performance
  • South plant in Hyderabad operating at very good levels
  • North has been primarily slow with stiff competition and still unclear on the way forward
  • West more or less a matured market

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