See 30% rev growth in FY17; Rs 120 cr orders in 1-2 days: TRIL

Vinod Mason, Director Strategy, Transformers and Rectifiers (India) (TRIL) is confident of orders worth Rs 120 crore coming in the next one-two days. He is also confident of a 30 percent topline growth in FY17 versus FY16, to around Rs 800 crore.

The company’s total orderbook currently stands at Rs 860 crore. The company had made a loss of Rs 7 crore in FY16 and revenues stood at Rs 600 crore.Below is the verbatim transcript of Vinod Mason’s interview to Reema Tendulkar on CNBC-TV18. Q: First, some details about this order. Rs 68 crore, what will be the margins you will enjoy and what does it take your order book to? A: Rs 68 crore is not a very big order for a transformer industry but it is a very significant order because this is the first one for 765 kV reactor which we have got. This order involves seven numbers of 110 MVAr and six numbers of 80 MVAr 765 kV reactors. With this we have now come at par with any other transformer manufacturer I would say not only in India but anywhere in the world. So, that puts at on a different platform altogether. If you recall on your channel only I once told you we had signed with Fuji the technology transfer agreement for this reactor. With this we will be able to complete that technology. We will be able to get that technology from Fuji Electrical Company Limited. We had signed for three products at that time. 400 kV reactors, 765 kV reactors and 400 kV generator transformers. With 400 kV reactors we had already taken from them because we had the orders. Now with 765 kV we will be able to get that also. Now coming to the point on the margins. The margins are okay, it is not bad. It is the first order we wanted to make an entry. I would say we have gone aggressively or we have gone very low margins. But it is okay. Q: But you will be making profits? A: We will be making profits, we will not be doing any business with loss. Q: But the margins may be lower than what you normally see? A: I wouldn't say lower also, it is okay. It is what normally the industry gets it. It is very competitive because we were just about 0.5 percent lower than the second lowest. Q: What it appears is that this 765 kV class reactors maybe the best in the technology. What kind of an opportunity does it open up for you. Should we see more orders from 765 kV? If yes, give us a sense of the potential in terms of possible order wins? A: India is the biggest market in the world for 765 kV today. If you look at Power Grid alone today we have total transformation capacity which is already commissioned is more than 1.50 lakh MVA. I don't think any other country in the world has got that much capacity for that. That is going to be a prime voltage for transmission specially in the central sector which will continue for in my opinion at least for five more years that is when we go for 1,100 kV. But till that time 765 kV will continue and there is a fantastic business. Q: Any numbers? A: Numbers I told you, 1.50 lakh MVA has been commissioned in the last four years. Q: What it means for you, your company? A: Our company it would be because if we get we are one of about five players in the country. So, if we get our 20 percent share it should be substantial business. Q: But the other four players are well entrenched. So, going by this order you said you have bid quite aggressively. Does that mean that as you try and capture this 20 percent market share your margins could be under pressure? A: No, they won't be because 765 kV is a limited market. I don't think anybody is going to cut much on that. We have a good technology which gives us the edge over others. Q: What is the order book now, total? A: Total order book today we stand at close to Rs 860 crore after executing the last few months and we expect another few orders in the next few days. Q: And what would be the potential side of the expected order inflows? A: I am expecting another Rs 120 crore or something like that in the next few days, maybe in a day or two. Q: So, what would this take your FY17 revenues in margins to? A: So far we are much ahead of the last year if you have seen the first quarter. We did 160 which was more than any time we did in the first quarter. Second quarter so far is looking quite encouraging. Still we have the month of September to go. So, it should be o0kay and we are not going to be in red at all. Q: So, you will be profitable for FY17? A: Definitely. Q: On revenues will it be a single digit growth like we saw last year? A: It will be much more. We had set a target of Rs 700 crore plus in the beginning but today I can confidently say that we can cross Rs 800 crore. Q: So, that would be quite significant because your FY16 revenues were just at Rs 600 crore or thereabout. So, compared to that you are expecting a 30 percent growth in the topline? A: Definitely.