Jitendra Mamtora, chairman and managing director, Transformers & Rectifiers (India) Ltd, spoke to CNBC-TV18 about the company‘s results for the year and the fourth quarter. The company recorded losses on lower margins for the fourth quarter due to rise in raw material costs and high kV orders.
Jitendra Mamtora, CMD, Transformers & Rectifiers (India) Ltd, spoke to CNBC-TV18 about the company's results for the year and the fourth quarter. The company recorded losses on lower margins for the fourth quarter due to rise in raw material costs and high kV orders.
Mamtora explains that the dip in performance was due to the company climbing the value-chain and assures that profit in absolute terms will go up with a boost in volumes.
Below is an edited transcript of the interview on CNBC-TV18. Also watch the accompanying video.
Q: Can you tell us what your sales and profit are for the year?
A: The total topline revenue is Rs 518.81 crore, close to Rs 519 crore as against almost Rs 544 crore recorded last year. Out of this, sales is Rs 478 crore as against Rs 511 crore recorded last year. EBITDA is Rs 27.47 crore as against Rs 69.03 crore last year.
Q: Can you give us a similar breakup for the fourth quarter as well?
A: For the fourth quarter, sales is Rs 3,931 crore as against Rs 5,788 crore last year. Sales was at Rs 130.97 core almost Rs 131 crore as against Rs 212 crore in the fourth quarter of 2011.
Q: What about the profit numbers for fourth quarter and full year?
A: The fourth quarter profit numbers are not much. I don't have those figures at the moment with me.
Q: You notched a profit of Rs 15 crore in last year's fourth quarter. So how much would it be this quarter?
A: The profit is to be something like Rs 3 crore – Rs 3.5 crore.
Q: And for the full year?
A: The PAT for the full year is about Rs 918 lakh as against Rs 401 lakh last year.
Q: What's your outlook on the losses caused due increase in raw material costs and execution of higher kV orders which put pressure on margins? How longer would you expect this pressure on margins to remain?
A: When any company is climbing the value chain, then the business is expected not to be very profitable. It is obvious that our foray in to the manufacture of 400 kV and 765 kV transformers has affected our performance.
Margins were to be hit as the orders were carried out very little turnaround time as the manufacturing capacity had to be enhanced.
Q: By when do you expect margins to recover?
A: By next year or so. Our order book next year is worth Rs 607 crore with a booking of 20,340 MVA which is very healthy.
But again the margins will be less, for the simple reason that half of this order is for 765 kV transformers. So we don't expect any improvement on the margins, but profit in absolute term will definitely go up because the volume is going to go up.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.