At optimum capacity revenue to be Rs 1200 cr: Transformers

Transformers and Rectifiers released its third quarter results on Friday where the company reported net loss of Rs 4.4 crore against Rs 1.6 crore in the same quarter previous fiscal. However, the revenue increased by 17.5 percent to Rs 126.4 crore on a year-on-year basis.

Speaking with CNBC-TV18, Jitendra Mamotra, Chairman of Transformers said that low margin orders and manufactured stock not converting into sales led to the downfall of net profit in this quarter.

He further said that capacity utilization was at 35 percent which resulted in under-recovery of fixed charges.Below is the verbatim transcript of Jitendra Mamtora's interview with Sumaira Abidi and Nigel D'Souza on CNBC-TV18. Sumaira: Your losses have widen significantly this time around almost to 4.5 crore despite the topline being sustained close to Rs 130 crore. Can you take us through the internals? What was it that caused this big loss? A: We are holding some finished good stocks which we could not account for in the last quarter. Those were some overseas orders which were on hold because of non-availability of the inspectors from that country; they were all for exports. So that was the main reason that in spite of producing those transformers, we couldn't account it in our topline. However, the combination of product that we had in the last quarter was not conducive to earn more profit. So it all depends on the kind of transformers which we have manufactured over this quarter and profitability of each of the projects, so if the projects are not doing well as all the projects which has taken up, are without much margins then this kind of thing is going to happen. Moreover the products and capacity which we have is not being used fully. Our maximum capacity in a quarter is 400 crore and based on that the manpower cost is also there which we couldn't utilise for several reasons like there is uncertainty of exports but now everything is lined up and you will see tremendous difference and increase in the topline and also EBITDA margin. Nigel: What exactly was your capacity utilisation in the past quarter and you were also talking about some problem in terms of export orders. First, what is the total contribution coming in from export orders and you believe that these problems will be solved in Q4 itself? A: If you look at the capacity utilisation in the last quarter or in the earlier quarters was hardly 35-40 percent and the quantum of the order, which is there for exports is huge, it is something like Rs 450 crore. So whatever uncertainties were there are taken care of and now things are moving smoothly without any issues. Therefore, you will see the last quarter was different than the other three quarters. Nigel: At optimum capacity - what exactly can your topline look like? A: It will be Rs 1,200 crore.