Transformers & Rectifiers eye over Rs 700cr revenue in FY14

Transformers and Rectifiers India reported a standalone sales turnover of Rs 243.80 crore and a net profit of Rs 3.79 crore for the quarter ended Mar 2013. Other income for the quarter was Rs 1.60 crore.

Speaking to CNBC-TV18, Jitendra Mamtora, CMD, Transformers and Rectifiers India says that distribution companies continue to pose problems for the company. Mamtora adds that the company plans to post a revenue of over-Rs 700 crore and EBITDA margins of close to 8 percent for FY14.

Below is the edited transcript of the interview on CNBC-TV18

Q: Your EBITDA has gone up 150 percent, net profit has increased by 140 percent and income is up 71 percent. Is this across-the-board surge a one-off or is it sustainable?

A: Our fourth quarter results are an improvement on orders bagged in the third quarter which we just got repeats of. Compared to our order book position on April 21 which stood at Rs 675 crore, this year we will easily be able to bag orders worth Rs 750 crore, considering our previous track-record of completing 30-40 percent more than the order-book as on March 31.

We are also trying to considerably prepare to manufacture reactors for the 765 KV transformers for which where we are not qualified yet. But talks are on with a few large participants to partner with.

Q: Can list your top five clients, apart from the Rs 296-crore order from Gujarat Energy Transmission Corporation (GETCO), whose orders are fortifying your order-book?

A: Some of the major clients are, the Power Grid Corporation, GETCO, the Andhra Pradesh State Transmission Company and the state-government of Maharashtra followed by other industrial transformers.

Q: Your receivables are causing some problems. Though the Power Grid Corporation is an extremely solvent company, state-governments have had problems in being able to pay bills. How many days’ receivables do you have?

A: About 110 days on an average.

Q: Has it worsened last year?

A: No. Transmission companies are not in trouble. It is the distribution companies or discoms that are in trouble. All project funds are lined up before an order is placed. So, we haven’t faced any problem with any of the utilities.

Q: The manner of reducing the promoter's stake from 76.8 percent by giving a bonus only to non-promoters, to comply with Sebi norms has not affected the interests of the shareholders. But what kind of ratio can the market expect? Will it be just enough to take promoter’s stake down to say 74.9 percent or could it be significantly better than that?

A: It should meet SEBI norms. We decided to reward our shareholders who have stood behind us for such a long time. We remember the time when they subscribed 92 times to our shares at Rs 465. And when the shares drop to Rs 78 or 80, we felt very bad. So we decided to reduce our stake by offering bonus shares to the non-promoter stakeholders.

Q: What are the revenues and margins that you plan to post in FY14?

A: For FY14, we expect EBITDA margins to touch 8 percent and the post revenues above Rs 700 crore.