Conference Call with TD Power Systems Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.
Call Participants: Mr. Nikhil Kumar - MD, Mrs. M. N. Varalaxmi - CFO
Introductory Remarks from Nikhil Kumar
Good morning everyone and thank you all of you for joining us today in the call. Let me start my discussion of the financial performances of the year ended March 31, 2020.
On a standalone basis our full year income was Rs 494 crore versus Rs 456 crore in the previous year
Profit After Tax was comprehensive income at Rs 16.9 crores versus Rs 6.97 crores
Full year manufacturing revenues is Rs 455 crores versus Rs 408 crores, up 12%
Exports contributed 65% of manufacturing revenue without the railway business and it was 59% including the railway business
Unfortunately, we lost around Rs 30 crores of manufacturing revenues due to Covid-19 lockdown and inability to get inspectors to come to India or inspectors from India to come to Bangalore starting from around March 10. After that, we had trouble to ship orders, finished goods and then when the eventual lockdown started on March 22, we had to close our factory and everything came to a grinding halt
Manufacturing order book including Turkish operations stands today at Rs 1,107 crores. Rs 306 crores is our manufacturing business, Rs 715 crores is railways business and Rs 86 crores is our Turkey business
The order in flow for the current year was Rs 468 crores, for the manufacturing business for Turkey, we had Rs 88 crores. Total inflow for the manufacturing business for the year ended March 2020 was Rs 556 crore versus a year before at Rs 488 crores
Full year polish business revenue was Rs 32 crores versus Rs 42 crores, the previous year. The pending order for this segment is Rs 22 crores
On a consolidated basis, full year total income including exceptional items was Rs 542 crores versus Rs 468 crores. Profit After Tax including comprehensive and exceptional income is Rs 28.85 crore versus the profit of Rs 2.9 crores, the previous year
Today in the year, the company wrote back payables of around Rs 12 crores in our subsidiary company DF Power systems
Our consolidated order book is at Rs 1,129 crores which is manufacturing business as I said to you earlier was at Rs 306 crores, railways business is Rs 715 crores
Ever since the Covid-19 lockdown started and we have had disruption in the entire business cycle across the country and also in the world, we have been trying to analyze the market and our position in the market more in terms of two questions - 1) What will be the impact of all this on the company’s business for the current fiscal FY21 and 2) What will be the impact on the company’s business beyond FY21
Answer of the first question: Looking at the pending order of FY21, we were blessed with very strong order flow last financial year. We also had a spill over from last year due to Covid-19 lockdowns of around Rs 30 crores. Correspondingly, we have also seen after the lockdown has been lifted that we have postponements up to approximately the same amount as the spillover from the last year. At the moment, we have no order cancellations. We have also observed that most of the postponements are from the Indian market and negligible postponement from outside India
The good news is that our railways business for the Indian market is totally intact with the original projections which were there pre-Covid-19. So, overall we see that our business for FY21 is still stable at this time and we still expect FY21 to be a very good year for the company. Ofcourse, there is an impact from Covid-19 since FY21 was on track, actually an exceptional year with a 25% growth but now we firmly revise that growth to be around 16-18% over last year including our business from Turkey
Regarding projections for FY22, we have seen that we still have some momentum from pre-Covid and we have seen fairly strong order inflows in April and May. At the moment, we don’t see much disruptions from our business from international markets and most of the pipeline pre-Covid-19, we see still intact. However, some of the sectors are really hammered, like the shell oil business, but lower oil business means engine business. Overall, the net effect is positive for TDPS
We are also confident that Indian market will bounce back eventually and it is not a question of all doom and gloom. We also expect Indian Railways and expect the number of locomotives required by around 10-15% for FY22
In summary, we are overall very positive about FY22 and I also want to convey that we are still very cautious about FY22 but at the same time we are very optimistic. We are extremely confident on hitting our numbers for FY21
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