Dhruv M. Sawhney, Chairman and Managing Director, Triveni Turbines Ltd graduated with an M.A. in Mechanical Sciences from Emmanuel College, University of Cambridge, U.K. and M.B.A with distinction from the Wharton School, University of Pennsylvania, U.S.A. He is a past president of the Confederation of Indian Industry (CII), the Indian Sugar Mills Association and the Sugar Technologists Associations of India and the International Society of Sugarcane Technologists. He was the first Chairman from the developing world of the International Society of sugar Cane Technologists. He has served on the board of various public sector organizations and chaired Government advisory councils on Industry, Energy and sugar. He chairs the Commonwealth Leadership Development conferences found by HRH Prince Philip, the Duke of Edinburgh in 1956 to foster and broaden the understanding and decision-making ability of individuals in the commonwealth countries. He is a Deputy Chairman of the Evian Group and Chairman of the India Steering committee of the World Economic forum, Switzerland.
Triveni Turbine Limited (TTL) is a focused and growing corporation having core competency in the area of steam turbines manufacturing upto 30 MW size. The business of the company was demerged from Triveni Engineering & Industries Limited subsequent to a court approved demerger scheme. TTL is the market leader in the steam turbines with state-of-the-art manufacturing facility located in Bengaluru. The business has been growing and a strong in-house Research & Development programme enables the company to expand its product range over these years. The company's focus on the aftermarket operations such as servicing, spares and refurbishment is also yielding results. GE Triveni Limited, the subsidiary of TTL, is the Joint Venture with General Electric to manufacture and market steam turbines from above 30 MW to 100 MW for the global market.
Yash Ved of IIFL gives you the highlights of the conference call conducted by Triveni Turbines Ltd after its latest quarterly results where Dhruv M. Sawhney says "Our domestic market order intake continues to improve in Q3 and Q4."
How was the quarter as a whole?
The company's focus and strategy on the export market to beat the domestic market slow down has been successful. The export order booking overtook the domestic order in-take during the six months under review with domestic and export order inflow at 49:51 in comparison to 79:21 during the corresponding period of previous year.
The continuing focus on exports will provide enormous growth potential when normalcy is restored in the domestic market. It is commendable that even with 15% lower turnover, the Company has achieved profitability at the same level compared to the previous half year. Increased exports, higher sales and contribution from the after-market business enabled the company to achieve the strong margins. We expect to close the gap in turnover substantially by Q3 and achieve a single digit growth both in turnover and
profits for the full year.
GE Triveni Limited, the joint venture is in an advanced stage of getting a substantial domestic order which is expected by the end of calendar year. With many more pipeline enquiries which are at various stages of evaluation both from domestic and international market, we believe that the business should start getting the requisite traction and should be on a strong footing in FY 14.
What were the developments during the quarter?
During H1 FY 13 exports sales have shown a growth of 68% year on year while
the export order inflow has been strong during the period under review.
The mix of domestic and export sales has improved significantly in H1 FY 13 at 73:27 from 87:13.
The margin is substantially better for export sales due to our continuous R&D effort over the past 3 years.
The mix of product and after-market has improved significantly in H1 FY 13 at 80:20 from 85:15 during H1 FY 12
The PBT margins have improved by about 3.5% on account of better after market mix and higher share of exports in the total sales
What is your outlook for the coming quarter?
The demand for Triveni’s turbines comes from a variety of sectors such as Sugar, Sponge Iron, Textiles, paper, Independent Power Producers, and Sugar Co-generation plants. The order book composition from various sectors shows a healthy mix among all these sectors. Further, with the continuous research & development programme, foray into higher MW, high-temperature, high-pressure turbines will add the market opportunities. The company has also been focusing on the exports market in a big way.
During the half year under review, the overall market for the sub 30 MW power products remained more or less at similar levels as compared to the previous year. However, as the overall order inflow during the half year remained strong, the company is expected to show healthy sales in the first half of next financial year. With renewed thrust on exports, we believe the order booking from export market in the second half of the year should also remain buoyant. The export orders constitute ~ 24% of the total order book as on 30th Sept 2012.
The Company intends to continue its focus on expanding the market overseas.
Our domestic market not picked up in capital goods space. Our sales have been increased in International markets across SouthEast Asia and Europe.
We expect to increase our orders in various countries. We are receiving strong enquiry from International markets.
We expect Q3 and Q4 to be better. Our domestic market order intake continues to improve in Q3 and Q4.
What is current outstanding order book?
The outstanding order book as on 30th September 2012 has been Rs 5.03 bn without considering slow moving orders
When we can expect company to be debt free?
In view of repayments as well as prepayment of loans, the debt levels have reduced considerably. Its is expected to be debt free by Q3 FY 13
Brief us about your financials?
Triveni Turbine Limited has announced its performance for the second quarter and half year ended 30th Sept 2012 (Q2 FY 13).
July - Sept 2012 v/s July - Sept 2011 (Q2 FY 13 v/s Q2 FY 12)
Net Sales lower by 1% at Rs1.80 bn
EBITDA of Rs454 mn with a margin of 25.3%
Profit after tax (PAT) at Rs 281 million - an increase of 16%
EPS for Q2 (not annualized) at Rs0.85 per equity share