Alstom T&D India Ltd.|Q2FY15 Concall Update | CMP: 400 | Rating: Buy | TP:444 :: IndiaNivesh

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Concall Highlights:
We attended concall of Alstom T&D India. Major highlights of the concall were as
follows:
 In spite of challenging environment, Alstom T&D India was successful in
winning orders worth Rs 22.38 bn, during Q2FY15. This order wins contain
the large HVDC package worth Rs 14.3 bn won by the company.
 Total order book of the company at the end of Q2FY15 stands at Rs 79 bn,
which is Y-o-Y growth of 22.1%. This large order book will help the company
in growing top line over coming quarters.
 SEBs financial reforms are still in slow pace. Transmission utilities are also
under cash flow stress. More rapid reforms in power sector are needed to
make the environment conducive for major investments.
 Competition pressure has abated in many tenders as several private
contractors have left the market due to non-performance. However pricing
power has not yet returned to the market.
 Overall demand in H1FY15 was lower compared to H1FY14.
Result Update:
Alstom T&D India reported robust set of top-line and margin performance in
Q2FY15.Company has shown healthy execution rate on its large order book which
resulted in top-line growth of 11.9% to Rs 9,137 mn. EBITDA margin of the company
increased y/y by 99 bps to 10.3%, which is mainly on account of product and project
mix. On back of higher top-line and y/y increase in EBITDA margin, EBITDA of the
company increased by 23.8% to Rs 938 mn. Change in depreciation policy led to
~12% decline in depreciation charge to Rs 191 mn; Company was able to maintain
effective tax rate of 34% in Q2FY15. Consequently net profit for the quarter increased
substantially by 70.6% to Rs 355 mn.
Rs mn Q2FY15 Q2FY14 Q1FY15 Y/Y Q/Q
Net Revenue 9,137 8,168 6,733 11.9% 35.7%
EBITDA 938 757 766 23.8% 22.5%
Net Profit 355 208 284 70.6% 24.8%
EPS (Rs) 1.39 0.81 1.11 70.6% 24.8%
EBITDA margin % 10.3% 9.3% 11.4%              ‐ 99            210
Net margin % 3.9% 2.5% 4.2%            ‐ 134            168
Standalone, Source: Company, IndiaNivesh Research
Half Yearly performance:
Net revenue for H1FY15 has shown a strong growth of 13.1% to Rs 15.9 bn on
account of large order book and effective execution rate. Mainly due to control
over other expenses and employee cost, company was able to improve its EBITDA
margin by 102 bps to 10.7% in H1FY15. Decline in depreciation expense by 9.1%
and finance cost by 13.1%, helped in net profit margin increase from 2.6% in H1FY14
to 4% in H1FY15.

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