Here's the link:<http://www.voltas.com/corporate/reports/Voltas%20-%20Analysts%20Confe...>
Some of the key points of this conference is as under:
* Operating profits stand at Rs. 278 crores which was at Rs. 155 crores last
year. In Rs. 155 crores last year there were 2 one-time items. One was the
refund of income tax for which an interest credit of Rs. 4 crores, a
one-time item was received. In addition to that, shares of subsidiary
company Simtools Limited was sold for which there was an exceptional item of
Rs. 68 crores. There was similar holding in Simtools Limited by another one
of subsidiaries and from the income gained from that sale of shares, that
subsidiary company had given a dividend of Rs. 12 crores. So Rs. 16 crores
of one-time item was there last year. If that is excluded from Rs. 155
crores we get Rs. 139 crores, and Rs. 139 to Rs. 278 crores gives us a 100%
increase in operating profits
* EBITDA margins for Q4 - 9.1% and FY08 - 9.9%. Both for the quarter and
cumulatively, for last year it was 6.6%
* EPS without one time items for the quarter is Re. 1.37 against 1.08, and
for cumulative period Rs. 5.44 against 3.04, which is an 86% increase
* Return on net worth stands at 42% & if we exclude the items of the
investment in mutual funds and cash on hand, it would go even higher &
exceed 50%
* EBITDA margin is 9.4% in domestic & 8.1% international. This was 9.1% in
domestic last year and 6.6% in international
* *The do not have any derivative exposures*
* The revenue of the Electro Mechanical Projects & Services is Rs. 473
crores which was Rs. 440 crores last year. There has been a very substantial
jump in the domestic market. However in international there is a drop
* There are about 5 new projects which started during the current year and
execution had just about started. In the case of these projects we have not
completed a milestone of 10%. Voltas follows the policy that until 10% of
the project cost is incurred, it does not account for any margins
* The second question is why turnover has dropped as compared to last year
in this particular quarter. When one is handling few very large projects it
is very difficult to compare turnover & margins on quarter to quarter basis.
If at all, there should be a comparison, they should be for sequential
quarters and not with the same quarters of the previous year
* The one factor which needs to be looked at is not just the revenue
performance, but more the aggregate order book position in this particular
segment. The order book in the segment has risen to Rs. 4,600 crores out of
which Rs. 800 crores is accounted by domestic where there is an increase of
37%. As far as international is concerned, our order book has risen by 140%
to Rs. 3,800 crores. *Now if you look at Rs. 4,600 crores order book's
normal average execution cycle would be about 24 months, and that gives an
indication of the bright future that your company has for the coming year
and the year thereafter*
* In electromechanical segment turnover has grown by 21% over the previous
year. The margins have gone to 7.4% and the capital employed has grown by
17.2%. This increase in capital employed is against 21% increase in revenues
and the ROIC for the company in this segment stands for the year at 72%
* Segment B (Engg. Products & Services )has grown in terms of turnover by
33% for the year. There has been a slowdown in machine tools and textile
machinery division. As far as machine tools divisions is concerned the
deceleration is both in orders received as well as in the turnover achieved.
However in the case of textile machinery the deliveries against past orders
have slowed down a bit but they have not stopped growing yet
- The total inflow of orders is lower than the previous year but it is not
comparable with last year because last year was the last year of TUF and
because of that a lot of customers had rushed to place orders before the TUF
gets closed. This year we have a situation of the term of TUF getting
extended by another 5 years and therefore slowly the order book position
will accelerate.
* The other factor which was impacting textile machinery division was the
rupee appreciation and what has happened in the recent past also should help
the industry. Rupee stands between 42 and 43 and that should help the
exporters of yarn which also augurs well for the future as far as textile
machinery division is concerned
* Mining and construction business has done exceedingly well in the current
year and there has been a very substantial growth in the revenues and order
bookings. So far as the margins are concerned because of increase in local
stock and sale for accessories & spare parts, long term service contract
that we have taken & the domestic manufacturing, there would be some bit of
declaration in the computed percentage margins
* In Material Handling business, although the volumes have increased over
the years the competition has started increasing. A number of international
players have come into the market in this business because of the large
increase in volumes that has taken place over the last 2 or 3 years, and
therefore there is pressure on the margins
* Despite all this, the margins in B segment have overall increased by 13%,
turnover has grown by 33%, capital employed is under control & return on
invested capital stands at 144%
* In the third segment (Unitary Cooling Business), it has grown by 37% to
821 crores and results have very significantly grown from 10 crores last
year to 54 crores which indicates a growth of 448%. More significantly,
while there has been a 37% increase in turnover, capital employed has hardly
increased by 6% to Rs. 82 crores and therefore the return on invested
capital has increased from 13% last year to 66% in the current year
* Looking at balance sheet, our net worth has increased last year from Rs.
370 crores to Rs. 540 crores, our borrowings stand at a very low figure of
48 crores which are all current borrowings for working capital requirements
and as against this, last year we had borrowings of Rs. 82 crores
* Our investments in mutual funds have risen from Rs. 90 crores last year to
Rs. 221 crores, our net current assets in the domestic market stands at 9
crores as against 36 crores of last year, out of which the current assets of
the nature of cash and bank are about Rs. 87 crores. And therefore if 87
crores is eliminated from the domestic current assets, *we are actually
working on negative working capital of Rs. 78 crores*
* In the international business, the net current assets stand at Rs. 119
crores and advances received from customers and in cash balance is about Rs.
200 crores, so once again this indicates that *international business also
runs on negative working capital, despite the substantial increase in both
domestic and international markets in work in progress*
this year is Rs. 346 crores, once again a very significant achievement
arising from concentration on cash generation.
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