TD Power Systems Limited (533553) Q4 13/14 earnings summary

Executive summary

• Manufacturing sales grew 16.24% YoY, but weaker project and EPC activity drove consolidated net sales down 18.20% and PAT down 45.60%.

• Standalone revenue declined 14.51% and PAT 4.73%; the outlook for FY15 relies on manufacturing growth, exports and expanded capacity.

Financial highlights

• Standalone revenue from operations and other income was Rs 38,438.88 lakh, down 14.51% YoY; EBITDA was Rs 6,370.94 lakh, down 8.35%.

• Standalone PBT was Rs 4,550.51 lakh and PAT Rs 3,398.85 lakh, down 15.49% and 4.73% YoY, respectively.

• Consolidated net sales fell 18.20% to Rs 48,022.98 lakh; PAT fell 45.60% to Rs 2,270.81 lakh, reflecting lower project and EPC sales and US subsidiary costs.

• Consolidated total income was Rs 51,432.78 lakh, down 16.76%; other income rose 10.70% to Rs 3,409.80 lakh, including Rs 1,059.84 lakh of foreign-exchange gains and translation income.

Outlook and guidance

• FY15 manufacturing business growth of 20% was targeted, supported by a comfortable order book, expanded capacity and expected export growth.

• Hydro, gas and wind generator sales were expected to grow in FY15; exports were forecast to reach ~45% of sales, with new overseas orders and OEM alliances supporting demand.

• TG Island project revenue and EPC revenue were expected to remain flat in FY15; TG Island operations were under strategic review and could be phased out to support OEM alliances.

• Management expected to sustain growth and profitability in FY15, led by manufacturing; EPC bidding would prioritize sound customer finances and advance payments.