Q1 2012 Earnings Call - Crompton Greaves Dt-20 Jul’11 Call/100093_20110720.pdf · Q1 2012 Earnings Call - Crompton Greaves Dt-20 Jul’11 Operator Ladies and gentlemen, good morning

Q1 2012 Earnings Call - Crompton Greaves Dt-20 Jul’11

Operator Ladies and gentlemen, good morning and welcome to the Crompton Greaves Q1 FY12 Results Conference Call, hosted by Prabhudas Lilladher. As a reminder, all participants lines will be in the listen-only mode. There will be an opportunity for you to ask questions at the end of today's presentation. Please note that this conference is being recorded. Joining us on the call today from Prabhudas Lilladher are Ms. Amisha Vora and Mr. Dilip Bhat, Joint Managing Director, along with Mr. Kunal Sheth. At this time, I would like to hand the conference over to Mr. Kunal Sheth. Thank you, and over to you, sir.

Kunal Sheth, Prabhudas Lilladher Thank you. I would like to welcome the management of Crompton Greaves on the call. From the management, we have Mr. Laurent Demortier, who is the CEO and Managing Director for Crompton Greaves and Mr. Madhav Acharya, who is the Chief Financial Officer.

Now, I would like to request the management to give us some opening remarks, and then we'll open the floor for a Q&A session. Over to you, sir. Laurent Demortier, Chief Executive Officer and Managing Director Okay. Good morning. My name is Laurent Demortier, so nice to be with you for this first conference call.

I think the results of what is comment on the result of the CG, I think overall we have been sustained a regional growth of 5.9%, with certainly a higher growth in India our growth in India was 9.4% versus international.

The order intake has been inline with our expectations, we book 2 million 250 crores, which is inline with our yearly expectations. And finally, we close for global EBITDA of 8.5%, which is down compared to last year and that we can commence, but which has been inline with what we have seen on the market.

And below from the question at this point, so I think you can go for whatever question you have on that. Hello?

Operator Yes sir, would you like to begin with the question?

Kunal Sheth, Prabhudas Lilladher Yes, please. We can now take a question.

Questions And Answers

Operator Sure, sir. Thank you. Ladies and gentlemen, we will now begin with the question-and-answer session. [Operator Instructions]. Our first question is from the line of Renu Baid from B&K Securities. Please go ahead.

Renu Baid Good morning, sir.

Laurent Demortier, Chief Executive Officer and Managing Director Good morning.

Renu Baid Sir, first question definitely coming in terms of performance, specially on the international business front. I would like if you can

give some explanation on what resulted and first of all the euro sales declining by about 9 to 10% and operating loss at the subsidiary level and how is the outlook of international business profitability going forward, subsequent quarters of the current year?

Laurent Demortier, Chief Executive Officer and Managing Director Okay. Just some European, I am going to comment and that's why I've got all the points, but let's go on the European performance. I think what we are facing in Europe is a drop of activity, which has been due mainly to what happened in What we are seeing is that at the same time there is a opportunity developing in Western Europe, in a traditional market. Traditional market being mainly the wind, but also the distribution transformer business. So, I think we'll would try to compensate this shortfall by those developments in those regions.

Renu Baid Sure. But then, as in the euros despite having a close to 11% translation gain, there was about 10% loss in sales. So, that was purely because the sales been deferred or were there any problems with the product or some other problems which have not been very usual with CG overseas business ?

Madhav Acharya, Chief Financial Officer As we indicated there has been a drop in euros, performance in euro term. And this performance was primarily because we could not shift out lot of our products, because of disturbance in Middle East and Africa.

Renu Baid Okay.

Madhav Acharya, Chief Financial Officer And that's primary reason, also there's been a slowdown in activity in general as you are well aware.

Renu Baid Right. But, sir...

Madhav Acharya, Chief Financial Officer That's the primary reason.

Renu Baid Would it be possible for you to share what will be the quantum of the work which was affected because of unrest in Libya and Middle East. And what proportion of international business does that contribute?

Laurent Demortier, Chief Executive Officer and Managing Director First of all, it's altogether this activity is around... if you look at the international business activity in Middle East is around 5 to 10%. But in December we need to be very careful because some of those activity we get insured, some we are not insured. So, some element, we are able to recover for insurance and some we are not. So, we have been impacted but the maximum is around 5 to 10% of international revenue. Madhav Acharya, Chief Financial Officer And we believe, this is only a short-term phenomena, I guess once we harvest in the Middle East and Africa settles down, we should be in a much better position than where we are today.

Renu Baid And sir, the operating loss that came in the first quarter, was it because of this or some other issues, because we have seen the previous quarters also but when typically sales and euro terms about 150, €155 million. But never had such significant operating loss as well as loss coming at the net level. So what would be your comments on that?

Madhav Acharya, Chief Financial Officer If you look at the drop in volumes, all right. Overall drop in value is approximately 500 crores on a consolidated basis. And if you remove the India drop which is approximately 250 crores, there has been a very sizable drop in top-line in Europe and in the international operation, which is a primary cost for lower margins. We do not have any other significant issues in manufacturing or other areas.

Renu Baid Okay. So, basically you mean to say that the operating loss that we reported in the international business for the quarter was primarily because the volumes not coming through. And...

Madhav Acharya, Chief Financial Officer Primarily because of volumes not coming through and lower realization because of competition.

Renu Baid But no problem with anything with respect to the product performance, any customer return coming in terms of transformers and no other issue...

Madhav Acharya, Chief Financial Officer Nothing significant to report.

Renu Baid Okay. And so what would be the outlook for this international businesses for the current year, because initially we started with a broad expectations of the business growing by about 12 to 13% in local currency terms.

Madhav Acharya, Chief Financial Officer Yeah. We always said that... Maintain our profitability.

Madhav Acharya, Chief Financial Officer We mentioned that European, non-India business would grow in euro terms by approximately 8 to 9% as what we have said earlier.

Laurent Demortier, Chief Executive Officer and Managing Director And yeah I think on the European 8 to 9 was what we said. What we believe in that by year end, we might see a growth around 5 to 7%.

Madhav Acharya, Chief Financial Officer In euro terms.

Laurent Demortier, Chief Executive Officer and Managing Director In euro terms.

Renu Baid And margins, do you think we will be able to maintain last year's margins of 10% or because then the work to be done in the next nine month is significantly higher both in terms of sales as well as in terms of profitability growth?

Madhav Acharya, Chief Financial Officer As you are aware, we do not give separate profit margin.

Renu Baid Right.

Madhav Acharya, Chief Financial Officer We always give a consolidated margin.

Laurent Demortier, Chief Executive Officer and Managing Director Now what we I think we wait for to compensate with a loss of volume by some cost improvement measure in the European arena and this two measures are mainly around the sourcing. So the matter you saw, we are buying, we are increasing up by low cost account fee sourcing. And the second, we also approved submission in some of our factory to reduce the direct table on a temporary basis to be able to adapt to the volume. This measure has been effective at July 1st. So I think we'll see the results on the second quarter. Renu Baid Okay. And sir, overall in terms of the demand outlook from European region, do you think it improving positively since the last couple of quarters or it has started flattening out?

Laurent Demortier, Chief Executive Officer and Managing Director First of all, EBITDA in Europe, we are a small player. So I think first, looking at the macro data may be doesn't apply. I think what in Europe, we have very good prospects right now as I said Western Europe, they're moving to a country where we can differentiate and show and sell a high asset value products. Mainly in the wind offshore which is showing some nice prospect. So I think this would sustain IAG block front and it will compensate for the shortfall on the traditional business we are seeing in Middle East.

Renu Baid Okay. And sir, just my second question would be primarily on the domestic business fronts, where we have seen a profitability in the power standalone business cracking to approximately 12.5% level, which is a sharp fall. So do you attribute it primarily to competition and input price pressures, or some other reasons and what would be outlook...

Laurent Demortier, Chief Executive Officer and Managing Director No, you're totally right. I think there is increased competition pressure which has been the main driver for the loss of profitability on this quarter, on Indian market.

Renu Baid So probably we would see our profitability also coming down inline with broad industry in the domestic market. This typically used to be at a premium of 17, 18% plus margin, so will we see the margins coming below 15% level for this year or so in terms of overall.

Laurent Demortier, Chief Executive Officer and Managing Director No. But I think one reason why we have the premium is not because we are more expensive, which is because we have less cost. So I think more cost efficient, I think operation in India are pretty efficient right now, both in terms of sourcing but also in terms of process cost. So I think we have been, our market has been eroding but I think we can still enjoy premium due to our low cost and efficient manufacturing here in India.

Renu Baid Sir, lastly do you see growth coming in the current year for Crompton Greaves in terms of earnings?

Madhav Acharya, Chief Financial Officer Growth in terms of earnings, yes... Which would be maintained in that. Sir, if I have more questions, I'll get back to you. Thank you.

Madhav Acharya, Chief Financial Officer Thank you.

Operator Thank you. The next question is from the line of Harish Bihani from RBS Securities. Please go ahead.

Analyst Good morning, sir.

Madhav Acharya, Chief Financial Officer Good morning, Harish.

Analyst Hi, sir. Sir, in the AGM yesterday, there was this, a bit highlighted that there were some quality issues in certain transformers. If you can quantify that particular number because investors are worried on this particular front. And also what's the quantum of impact on the execution of current order backlog because of this particular impact?

Laurent Demortier, Chief Executive Officer and Managing Director I think there is no impact on quality, on the execution of the backlog. I think, we have, I think and I visited I was in the factory in the past six weeks. I think we have number of qualities to what happens is that we are manufacturing right now, more higher MVA products, so more higher products, which is good on one set because this is a high-added value product, but this is also the one which are there is the most technological challenge, I'm talking about the high voltage sections. And so, when there is a fall and you see, because the system is blocked in the middle of the factory.

But I think there is no all quite indicator doesn't show any increase in the rework on the process. The key issue we have on the manufacturing process in India is the fact that due to some slowdown in project infrastructure in India in the CG site. Customers are taking a little bit more time to pick up the equipment on site, so to get the clearance.

So, basically, when you're going to the site, there is a lot of equipment which have been manufactured, which are ready for dispatch that the customer has not collected. And we think that those products will be collected in the next quarter.

Analyst Right, sir. And sorry to hop upon this particular issue, but we have seen certain technology companies wherein certain quality issues

has come up and then it became a bigger issue. So, in case you can just give some color on what exactly happened if not quantify the exact number but what happened and have we already solved the entire issue, so we have no impact in Q2 on this particular issue? Well, Harish, first of all, nothing significant that happened in terms of quality, okay. There was a problem in one particular platform, which as Mr. Laurent explained that has affected the operations at one particular plant but those issues that are at . Okay. So nothing significant is there in the report.

Analyst Okay. Coming back to the Indian business we have seen a decline in the EBIT margin for the Power segment. Is it correct to understand that last year orders that we had taken in phase of stiff competition, that is hurting our numbers right now?

Madhav Acharya, Chief Financial Officer You also have to remember the volatility is impacted. Okay. Then the significant volatility and the costs have gone up, there has been margin pressure. So, there is a bound to be some impact on the numbers there. But we believe that numbers are reasonable and we should be able to do much better going forward.

Analyst Okay. So, typically the EBIT margin in the domestic power used to be in the range of 17 to 18%. So, are we looking at going back to that region or are we looking at a decline?

Madhav Acharya, Chief Financial Officer Last year was 18.6%, right?

Laurent Demortier, Chief Executive Officer and Managing Director Talk about India.

Madhav Acharya, Chief Financial Officer Yeah. Talking about India, last year was 15.6. We this quarter we had 12.6, we do believe that we have seen the bottom now. So let's hope for the best.

Analyst Okay. And on the consumer business again typically we are looking at double-digit growth and this particular quarter there has been a 2.2% growth, if you can just give us the reasons for the decline.

Madhav Acharya, Chief Financial Officer You're well aware of the inflation situation in India and also be well aware of the interest rate hike prices in India, so we have inflation that has taken by on the demand and financial patterns. Right. On the price hike which you had taken in April, any impact of that?

Madhav Acharya, Chief Financial Officer Sorry.

Analyst The price hike which you had taken in April.

Madhav Acharya, Chief Financial Officer Yeah.

Analyst Was there any impact of that on the overall on the supply of products in the consumer segment.

Madhav Acharya, Chief Financial Officer There is no direct correlation between price hike and any volume reduction?

Corporate Participant The volume reduction, the volume effect has primarily seen a lot of inflation and the interest rate hikes.

Analyst So am I correct in my understanding that we are seeing a overall slowdown in the consumer segment, so typically that 20% plus growth that we are looking at in the last quarter that might pan down to say around 10 to 15%?

Madhav Acharya, Chief Financial Officer We would need to see some more quarters to be able to reach that conclusion.

Analyst And sir, my last question would be on the industrial business. This quarter's growth has been reasonably okay. Are we looking at similar range or are we looking at headwinds in this particular business as well?

Laurent Demortier, Chief Executive Officer and Managing Director Yeah, industrial has been pretty good. I think we got 18.3% in India and 16.3% globally. I think on the industrial sector even if may be India might be a little bit impacted by a slowdown in some investment, I think we'll see that a little bit later. We will speak today. But we are growing segment right now in Europe on these motors as you know we have been invested in a factory just last to last year and we also conclude the acquisition of Sonomatra in June, which is completing our goals for the portfolio for industrial solution. So we basically have the motors, they drive and now we could also the transformers. So I think we are we believe would be able to sustain the goal for expansion in some of the markets.

Analyst Sir one last final question.

Operator Please, this is the operator Mr Bihani, can you come back to the question.

Analyst One last question related to the earlier question, which I have is given the first quarter performance, are we looking at FY12 how are we looking at FY12 performance? And some color on FY13 numbers in case we can share right now? Thank you.

Laurent Demortier, Chief Executive Officer and Managing Director Okay. In terms of transformers, I think in the growth altogether I think what our expectation as for this year compared to the Q1

performance of 9.4%. I think we would be able to achieve a double-digit growth this year somewhere in the 10, 12% range. I think in terms of EBITDA. I think we should be able to maintain 8 to 10% profitability for the year.

Analyst Thank you, sir.

Kunal Sheth, Prabhudas Lilladher Thank you.

Operator Thank you. The next question is from the line of Srinivas Rao from HDFC Mutual Fund. Please go ahead

Srinivas Rao Yeah, hello sir. My first question is on the international business. We are seeing the first quarter numbers, when I'm seeing the revenues in rupees, they are almost flat, whereas EBIT margins have fallen from 7.5% to minus 3.3, so can you explain little more what has cost this? Well, Srinivas as you're aware there has been a currency advantage that the company has got, okay. Which is why the numbers in rupee terms look flat. There has been as we experienced a degrowth in euro terms in the first quarter.

Srinivas Rao Okay. And what percentage of decline you've seen in sales?

Madhav Acharya, Chief Financial Officer Approximately...

Srinivas Rao And what happens to the margins?

Madhav Acharya, Chief Financial Officer There has been lower sales, obviously the margins get impacted.

Srinivas Rao Okay. But is there any impact of the acquisitions and any one-time in this?

Madhav Acharya, Chief Financial Officer No, there is no one-time adjustment in this.

Srinivas Rao Okay. Just coming to domestic power business. What happened for this 18% coming down to 12.5% in one quarter?

Madhav Acharya, Chief Financial Officer

In respect to power business alone?

Srinivas Rao Yeah, power business alone

Madhav Acharya, Chief Financial Officer There has been strong competition. There has been price pressure. Right. But, I'm trying to wonder why it will be there in one quarter alone. So this should continue in that case?

Madhav Acharya, Chief Financial Officer Well, Srinivas we also will have to look at the Power System's top-line, if you are referring to Q4 last year.

Srinivas Rao Yeah.

Madhav Acharya, Chief Financial Officer It was 819 crore, and this year for Q1, 559 crores. So if you have lower volumes, your margins are bound to be impacted in --.

Srinivas Rao Okay. Okay, fine. Thank you.

Madhav Acharya, Chief Financial Officer Yeah. Thank you.

Operator Thank you. The next question is from the line of Madan Gopal from Sundaram Mutual Fund. Please go ahead.

Madan Gopal Good morning, sir.

Madhav Acharya, Chief Financial Officer Good morning.

Madan Gopal Sir, can you again repeat the order intake which you said for this year and can you split it between domestic and international.

Laurent Demortier, Chief Executive Officer and Managing Director Madan Gopal Okay. Sir we spoke to some industry people on this. They are saying, Chinese competition is not going to go down at least for an year or so. And the clauses getting to the 765 kV transformers... hello?

Laurent Demortier, Chief Executive Officer and Managing Director

Yeah, sorry?

Madan Gopal Yeah. We speak to some industry people, they say the Chinese competition is not going to go down in a year or so. The clauses getting to Power Grid 765 kV transformers, the Chinese competition, the Chinese might benefit out of it and for next one or two years they would be very active in the Indian market.

Do you think that would impact our order inflow guidance this year particularly from Power Grid point of view. And we also hear State Electricity Boards have not calling many bids right now in the transmission distribution segment. Does that impact your order intake for the full year?

Laurent Demortier, Chief Executive Officer and Managing Director I think as far as, PGCIL is concern. I think the first of all the 765kV market in India is certainly one of the largest today. I think and for the years to come so as we see in the world. As a result, we can expect we see lot of competition I think CG, we are used to face competition and I think in our homeland, we have key advantage of very good cost infrastructure and performance. But I think we are ready to face the competition in PGCIL 765 kV, as you know we have the significant share of the standalone business both in -- and power transformer.

But and we know that the many other like Chinese and Korea and we have proven that we can compete with that. My worry is more than orders of PGCIL orders has been reduced significantly, PGCIL has not played the order that we're expecting but I think it just the timing issue. PGCIL is a very good company and I think there is a definite need on the rates. So, I think for mew it's just a timing issue that we have and this will become, CG I think is well positioned to fight the Chinese competition here.

Madan Gopal With regard to State Electricity Board, so what percentage of our orders came in last year from State Electricity Boards. And do you think we'll be able to repeat it this year as well?

Madhav Acharya, Chief Financial Officer We have approximately 20 And we believe we should be able to redeem that. Okay. Thank you, sir. Thanks for taking that.

Kunal Sheth, Prabhudas Lilladher Thank you

Operator Thank you. The next question is from the line of Aditya Bhartia from CLSA. Please go ahead

Aditya Bhartia Hello, sir.

Laurent Demortier, Chief Executive Officer and Managing Director Hi, Adit.

Aditya Bhartia Sir is the nature of unexecuted projects today different from the past?

Madhav Acharya, Chief Financial Officer I didn't get your question, right.

Aditya Bhartia Hello.

Laurent Demortier, Chief Executive Officer and Managing Director Yeah, can you repeat please?

Aditya Bhartia Sir is the nature of unexecuted projects today much different from the past. Then are you seeing more EPC projects now compared to more equipment supply orders in the past?

Laurent Demortier, Chief Executive Officer and Managing Director EPC first is not a very large part of all the new mix. So I am not sure that our view is represented on the market. I know, I don't think we are seeing any change compared to unexecuted order, and not at the CG level. Okay. And sir last quarter you had spoken about some Nelco orders which we are off lower margins. Have all those orders been unexecuted by now and there is some still, there are still some orders that are pending?

Madhav Acharya, Chief Financial Officer We have completed almost 95% of the unexecuted for Nelco's orders. Yeah.

Aditya Bhartia Okay. Thank you, sir.

Kunal Sheth, Prabhudas Lilladher Thank you

Operator Thank you. The next question is from the line of Nainesh Rajani from Tata Mutual Fund.. Please go ahead.

Nainesh Rajani Good morning, sir. I've got couple of questions. First of all just wanted to understand, if I'm not mistaken you did indicate that there is a, in fact of 250 crores in terms of revenue deferment which we had seen in this particular quarter as far as international business is concerned. Did I get that right, sir?

Madhav Acharya, Chief Financial Officer If you look at the total numbers, the top line which is looking out 2438, okay.

Nainesh Rajani Okay.

Madhav Acharya, Chief Financial Officer For consolidated numbers, okay. Out of this if you take out India has one, two declines approximately is 900 odd crore.

Nainesh Rajani International would be 968?

Madhav Acharya, Chief Financial Officer Nainesh Rajani So, 250 crores is deferred in this is is not included part of this 968 odd crores, is that right, sir?

Madhav Acharya, Chief Financial Officer I have not understood, sorry?

Nainesh Rajani This 250 crores.


Nainesh Rajani Is not part of the 968 crores which is deferred actually at this point of time. So actually international revenue could have been more by Rs. 200 odd crore, is that what I understood correctly?

Madhav Acharya, Chief Financial Officer International revenue should have been higher, if there would not have been problem in Middle East and Africa.

Nainesh Rajani Is that a safe assumption to make the deferment in orders as you have mentioned it, they would probably come in the next quarters and hence the loss that we've seen in the international business will probably not see and you would actually see higher profitability in next quarter?

Madhav Acharya, Chief Financial Officer Look, the goods are ready okay. Customers are ....

Operator Operator, I am sorry sir.

Madhav Acharya, Chief Financial Officer We have -Please see this is the operator sir. [Multiple Speakers].

Madhav Acharya, Chief Financial Officer Sorry.

Operator Sir, could you switch to your handset.

Nainesh Rajani I am on my handset.

Operator Not -- Mr Rajani, the speaker from Crompton.

Madhav Acharya, Chief Financial Officer We are on the --

Nainesh Rajani Operator we can hear this. That's okay.

Operator Okay sure. Thank you.

Corporate Participant Is it fine? Okay.

Nainesh Rajani Yeah.

Madhav Acharya, Chief Financial Officer What I was saying was that we have the goods ready. Okay.

Madhav Acharya, Chief Financial Officer Okay, most of the goods are already ensured. Customers have not taken because of disturbance in those parts of the world. We believe that those orders will grow sooner than later.


Madhav Acharya, Chief Financial Officer And we are quite confident that those inventories will go out.

Nainesh Rajani And hence the loss of this particular quarter that we see, we will be able to compensate that ?

Madhav Acharya, Chief Financial Officer Logically the business remains good, yeah... certainly yes.

Nainesh Rajani Okay. Second thing, sir, when Srini asked about the Power Systems revenue as far as this quarter is concerned.


Nainesh Rajani He was referring to June quarter and if we have look at June 2010 quarter with the Power Systems revenue 510 crores compared to June 2011 568 crores, you've actually seen an increase in revenue but the EBITDA margin had actually declined, and declined from 16.6% to 12.6% with this 400 bps.


Nainesh Rajani Madhav Acharya, Chief Financial Officer If you remember our earlier conference calls we had mentioned that there has been a pressure on the pricing.

Nainesh Rajani But not to the extent of 400 bps, if I'm not mistaking.

Madhav Acharya, Chief Financial Officer Let me just complete.

Nainesh Rajani Sure, sir.

Madhav Acharya, Chief Financial Officer The cost has been growing up, there is a strong volatility in cost.


Madhav Acharya, Chief Financial Officer And we have indicated that there'll be a reduction in margins this year.


Madhav Acharya, Chief Financial Officer Right. Now, you also have to look at the volumes, the volumes are 50 crores in this quarter, that is what you are referring to.

Nainesh Rajani That's right, sir. And as far as question of concern, it was referring to Q4 versus Q1, where there has been a sharp drop in the numbers.

Nainesh Rajani Sir but. fair enough, all right. So what are you guiding for I mean, do you expect this kind of trend to continue over the next couple of quarters or what is it that your... ?

Madhav Acharya, Chief Financial Officer As we indicated, we are hopeful that will be seeing the bottom right now.

Nainesh Rajani Okay. All right sir, thanks a lot and all the very best.


Laurent Demortier, Chief Executive Officer and Managing Director Thank you.

Operator Thank you. The next question is from the line of Prashant Poddar from Invesco. Please go ahead.

Prashant Poddar Thank you. Thank you very much for taking my question. Sir, first of all, could you give some indication of what has been the volume growth in the domestic and the international power systems business?

Laurent Demortier, Chief Executive Officer and Managing Director Volume for August or for...

Madhav Acharya, Chief Financial Officer You are looking for what, sales growth?

Prashant Poddar The volume growth in Power Systems in domestic and international business. Okay. India top-line growth is 11.5% in Power Systems, with pressure..

Prashant Poddar

This is value.

Madhav Acharya, Chief Financial Officer Yeah, that's right. Pressure on prices, so volume growth is higher than this.

Prashant Poddar Okay, sir. Volume growth is higher than 11.5%.

Madhav Acharya, Chief Financial Officer Yes, that's right.

Prashant Poddar And international business?

Madhav Acharya, Chief Financial Officer Same thing, the volume growth is much higher than the value growth.

Prashant Poddar All right. So, sir a very briefly I mean in terms of all the businesses having seeing higher competition suddenly this quarter, both in India as well as outside. And if I heard it right you are still looking at higher profits this year compared to last year. Somewhere your confidence, the way the confidence you are showing in profitability growth compared to last year, it's not reflected in the confidence on individual segment that we were to speak that except to domestic power systems where you are saying that the margins will bottom out here. Is the competition continues?

Madhav Acharya, Chief Financial Officer If you look at the growth similar that we have given for the whole year. Growth there that we have given. We believe that we should be able to grow by 10, 12% this year. Which obviously in absolute terms would mean recruit numbers for our profitability.

Prashant Poddar This 10 to 12% it's on profits, overall profits? We say top-line.

Laurent Demortier, Chief Executive Officer and Managing Director Top-line.

Prashant Poddar All right, top line. And I mean in terms of margins, obviously the margins is the key thing that we are looking out. Because that's where things have not matched up in this quarter. It's not just marginal decline or something. There have been sharp declines in individually each segments in segments of the business. So, the confusion here really is about the margins. And therefore, we are looking forward to some indication on what could be the full year margins for the company in terms of profitability?

Madhav Acharya, Chief Financial Officer If you recollect, we do not give quarterly guidance on margins, we give annual guidance and Mr. Demortier just mentioned the

annual guidance of EBITDA margins for the whole year. And is expected to...

Laurent Demortier, Chief Executive Officer and Managing Director -- EBITDA between 8 to 10% roughly it's last year of 14.4.

Prashant Poddar So 8 to 10% EBITDA margin?

Madhav Acharya, Chief Financial Officer Yes.

Prashant Poddar For the full year.

Laurent Demortier, Chief Executive Officer and Managing Director Yes.

Madhav Acharya, Chief Financial Officer That's right. So, that's the decline of around 5%?

Madhav Acharya, Chief Financial Officer No around...

Laurent Demortier, Chief Executive Officer and Managing Director 4%.

Prashant Poddar All right. Thank you very much, sir.

Madhav Acharya, Chief Financial Officer Thank you,.

Operator Thank you. The next question is from the line of Roshi Jain from Franklin Templeton. Please go ahead

Roshi Jain Good morning. The first question I have is the results seemed very typical of what happens in companies when there is a management change because since this is an order backlog driven business I presume this kind of margin decline this material margin decline should have been guided for to investors because if I look at so let's leave 4Q apart but 3Q turnover in domestic was very similar to the 1Q turnover that you've reported, but the margin decline is much, much sharper, so if you can comment on that please?

Laurent Demortier, Chief Executive Officer and Managing Director First of all, there was no adjustment fare in on any balance sheet adjustment as a result of the management change. So and you can see, you will see that in our balance sheet. I think we just have consumptions of elements that came in the first quarter which have resulted in the numbers that we have. I think would comment on the growth.

Madhav Acharya, Chief Financial Officer Yeah. Let me explain, let me first point to your statement that all our businesses driven by order book. That's part is necessarily true. In India its only 40% of the business which is driven by order book, okay balance 60% is driven by either very short order book of two to three months or on the --. So in those cases the volatility in consumer prices in commodity prices that you are well aware, the interest rate price is something which you are well aware and that clearly drives the consumption and the demand pattern in the market, so that has affected our consumer product goods, right?

Despite the situation we have done well. There has been a high increase if we have report. Roshi Jain Madhav, an important segment of the business is the Power Systems business which where we have been seeing systematic margin improvements even during extremely tough years of FY10 and '11.

Madhav Acharya, Chief Financial Officer Right.

Roshi Jain So I think my question pertains to that business which is order book driven where we have seen systematic improvement even in tough year. If you could comment on that because if I compare the 1Q turnover with this 3Q even 3Q levels, the turnover is not very different but the profitability is?

Madhav Acharya, Chief Financial Officer I think as we said we all the sales that we have right now was in our backlog and we are not turning things which we don't knew. So I think there is not too much surprise. We said the whole matter we have been face we got some things on the 12 months basis, we are looking about the 20% was the increase on the whole year right now. And our projects got we got some increase which has been limited increase.

So after that it has been more the impact of the normalization of we have also lot of product mix in the power sectors. So basically high value MVA or low value MVA and I think some of those mix has not been realized that's the only thing that's happened.

Corporate Participant The other thing Roshi you would want to just remember is that, we hedged our copper consumption. But we are always hedge CRG consumption. Okay. There is no real market for that. So gas and oil and some other commodities we are unable to hedge and there has been a significant cost volatility in those commodities which we have fixed impact.

Roshi Jain Yeah I presume that this is really the bottom and things really improve from here.

Madhav Acharya, Chief Financial Officer We also believe so.

Roshi Jain

The second question is given that this is the fairly tough environment for a player like yourself, was it prudent to have invested 270 crores on purchasing an aircraft. And can you give us the rationale for that purchase please? If you now look at our manufacturing location, this company is now manufacturing out of 15 countries in the world. In addition, we have offices in another 25 countries of the world and we are selling goods to more than 60 countries in the world. So the right way to operate this and to maintain efficiency, the management would require the right means of travel which clearly would improve significant efficiencies and improve the bottom-line going forward.

Roshi Jain What is the kind of efficiency improvement and margin improvement that we can therefore see. Will it be adequate to compensate the depreciation and the interest cost?

Madhav Acharya, Chief Financial Officer We believe so. Yes.

Roshi Jain So what was the impact of depreciation from that purchase during this quarter?

Madhav Acharya, Chief Financial Officer You can calculate 232 crores plus barely 5%.

Roshi Jain And so we think that during the year we will be able to offset that?

Madhav Acharya, Chief Financial Officer Of course.

Roshi Jain Thank you. That's all I have.



Operator Pankaj Sharma Good morning, sir.

Laurent Demortier, Chief Executive Officer and Managing Director Good morning, Pankaj.

Pankaj Sharma

Yeah. Sir, there were some news reports in the last week of June that there had been some cut in working hours in one of the plants in Europe and Pauwels facility. Sir, could you please explain that and was this because of lower offtake which you have seen in the Middle East?

Laurent Demortier, Chief Executive Officer and Managing Director Yeah. Basically there was two reason, we talk about the Irish plants which is doing distribution transformer. I think we have a two reasons first, there was a slowdown on some order for the wind business in Germany, which I think the expense is to the and the second was the Middle East. So basically we have in place a measure of flexibility and we just supply this measure, its a temporary measure and we moved the working hours as of July 1st, from the five days a week to three days a week.

Pankaj Sharma Okay, sir. When you say, that it's a temporary measures like it would continue for this quarter or like you would decide on the basis of how the outlook changes and how the demand improves, and you can probably increase it later?

Laurent Demortier, Chief Executive Officer and Managing Director Yes, exactly. That measure is a temporary measure so it's a quarterly measure that we have taken so far and if the orders just materialize we immediately restart. We have no delay in our capacity to restart. So, this has been so we have not removed anybody, we have just reduce the time of working. So, if you want to go to full speed tomorrow morning, we can do it, so it will just be driven by the recovery of some other inputs in distribution transformer for Europe.

Pankaj Sharma , just one more question on the consumer products business. Of course, this business was growing very well in the range of about 25% till last quarter. But as you highlighted that because of inflation and change in consumption pattern in India, we are seeing a slowdown in this business. So, what's your outlook on that business do you see things changing in next couple of quarters or would it remain same for few more months?

Laurent Demortier, Chief Executive Officer and Managing Director We are well optimistic on this business. I think if you look into detail as we know, we got a very good performance in the lighting division top. The one which has been affected a little bit on the first quarter is the Salient business and this has been is more overall market and I believe we have done slightly better than the market from the first quarter. And altogether for the consumer business, I think we decide that there will be some economical pressure. We believe that we have some actions to dynamite the sales and the product line that should -- that which you have to compensate for the drop.

Pankaj Sharma Okay, sir. Thank you very much. Thanks for taking my questions.

Madhav Acharya, Chief Financial Officer Thanks, Pankaj.

Operator Thank you. The next question is from the line of Vishal Sarah from SBI Mutual Fund. Please go ahead.

Vishal Sarah Hi sir. Just wanted to understand the margin guidance again. This 8 to 10% I believe is the console and can you give an indication of the standalone margins and what are the key factors that would be impacting margins to such an extent?

Madhav Acharya, Chief Financial Officer Vishal, we normally give consolidated margin guidance only. We do not give separate guidance.

Vishal Sarah Okay. And sir, you've never be indicating that the margin impact can be so significant going ahead. So can you explain some, a little bit further on when do you think this margins can recall to the past levels and what are the sectors which will drive this?

Madhav Acharya, Chief Financial Officer Well, there is significant competition in India as you all are well aware. The transition of China and Korea in the Power Systems, the inflation is running pretty high. The order issuance by power Grid and others have slowed down. So there is a little bit of slowdown right now that we are seeing.

Globally we are seeing the Middle East and Africa. We hopefully shouldn't get carried on in a couple of months. So we believe that it is possible to go back those numbers that we achieved earlier. But I guess it's the matter of probably one or two quarters.

Vishal Sarah Madhav Acharya, Chief Financial Officer It's like one or two quarters that going to have lower margins. Overall blended margins for the year will be down to go down, right.

Vishal Sarah Okay. So FY13 numbers, you think we can be back to last year's margin?

Madhav Acharya, Chief Financial Officer If things improve globally on the macroeconomic situation, I think we should go back to better margins.

Vishal Sarah Okay. And sir, earlier we used to give a sense a bit realization decline. Can you give a broad number of how much is the utilization decline this time now?

Madhav Acharya, Chief Financial Officer One second. Yeah, sorry Vishal I think the utilization drop is between 10 and 12%.

Vishal Sarah Okay. Again, same quarter last year?


Vishal Sarah And sir, the annual report talks of 22% Y-o-Y order book growth for the overseas power business. So while this quarter, the revenues have been lower. So do you think for the year as a whole we can see this 22% order book growth reflecting into similar kind of sales growth?


If you look at the order book given now, the international order book is up by 16.5 for the quarter.

Vishal Sarah Madhav Acharya, Chief Financial Officer So, we do believe that we'll have decent healthy order books going forward.

Vishal Sarah So despite having such an, even a beginning order book to be so high, what is it that is reflecting the sales growth?

Madhav Acharya, Chief Financial Officer Which is what it is problem in Middle East, there is problem in Africa that's a global macro economy situation, - that what to drive the issue to lower . But we have strong order and very healthy order book.

Vishal Sarah Okay. And in terms of margin sir, sorry to come again on this point but you know you can understand the concerns possibly all the investors have. On the overseas business, we are seeing a zero margin just because the sales have been lower by around 10%. Sir, what about the 90% of sales, this would anyways have similar profitability which we expect going ahead. So, then why is there a zero profit in those businesses in the quarter?

And going ahead say if hypothetically the sales decline for the year as a whole in versus business by 10%. Do we see EBITDA at the overseas level zero for the full year?

Madhav Acharya, Chief Financial Officer We'd explained that there is a drop in realization there. And we have also given you a guidance which we believe is reasonably achievable. So I do not think as a for concern for investors to worry about lower then what we have said. We are reasonably confidant on achieving what we have said.

Vishal Sarah Okay. Thanks a lot, sir. That's all from my side.



Operator Thank you. The next question is from the line of Saurabh Ji from Prudential. Please go ahead. Yeah. My question have been answered. Thank you.

Laurent Demortier, Chief Executive Officer and Managing Director Hello?


Hello?

Operator Those questions have been answered, we'll move onto the next questions. The next question is from the line of Srinivas Rao from HDFC Mutual Fund. Please go ahead.

Srinivas Rao Hi Madhav, I am just referring to your guidance again, you are saying on a consolidated basis 10 to 12% growth in top-line and EBITDA margins have 8 to 10%. So what it indicates is, we will see in the coming three quarters, numbers coming back. So I'm wondering if you think first quarter margins are lower due to lower volumes and if you're saying for the full year 10 to 12%. Why we are talking about 8 to 10% EBITDA versus 14%. You talked about...

Madhav Acharya, Chief Financial Officer Srinivas we have seen working in the first quarter. We believe that second quarter also would be difficult in challenging event for the company. But we do believe things settling back in the third and fourth quarter, if we take a blended margin, this is what we think should be achievable.

Srinivas Rao Okay. And when will Emotron and QEI start contributing.

Madhav Acharya, Chief Financial Officer Emotron was acquired on 20th of June, okay. So there is a very, very probably 10 days of top-line. This year they did contribute, last year we also contribute this year.

Srinivas Rao Okay, fine Thank you.

Madhav Acharya, Chief Financial Officer Thank you. Operator Thank you. The next question is from the line of Aman Batra from Goldman Sachs. Please go ahead.

Aman Batra Sir just a maintenance question. What would be the closing order book for domestic as well as the consolidated entity and also if you can similarly guide for CapEx for the year, for domestic and the overall consolidated entity?

Madhav Acharya, Chief Financial Officer The closing order book position is 7,088 crore, out of which India is 3,514.

Aman Batra Okay.


And overseas is 3,574.

Aman Batra How would be CapEx?

Madhav Acharya, Chief Financial Officer CapEx, we believe will stand between 300 to 400 crores between all CapEx. Yeah.

Aman Batra That's for consolidated?

Madhav Acharya, Chief Financial Officer That's the consolidated number, yes.

Aman Batra Okay. Thanks a lot.

Madhav Acharya, Chief Financial Officer Thank you. Operator Thank you. The next question is from the line of Kirti Dalvi from Enam AMC. Please go ahead.

Kirti Dalvi Good morning sir, a few questions from my side. You did you have given enough guidance for the current year but you also mentioned that we'll be able to grow our earnings for the current year? Am I right sir on that?

Madhav Acharya, Chief Financial Officer Yes, we said that.

Kirti Dalvi Okay. If I take your guidance of 10 to 12% top-line growth on a consolidated basis and even if I take a 10% EBITDA margins probably we will not be able to grow our earnings on a like-to-like basis?

Madhav Acharya, Chief Financial Officer All right. On a annual basis, we should be able to grow.

Kirti Dalvi On an annual basis, we'll be able to grow.


Yeah.

Kirti Dalvi So probably what we did almost 900 odd crores last year on consolidated fact, we'd be able to grow on that ?

Madhav Acharya, Chief Financial Officer Yeah, looks like. Yeah.

Kirti Dalvi Okay. So second question on a consumer products business again even if I take the demand part into the picture. Our capital employed in this particular segment which is are primary to our cash cow, has gone up significantly though the amount is small. So if you could elaborate on that? That's finally because the items of inventory built up in our business. That's why the that might be capital as well as but otherwise very marginal if you look at the numbers.

Kirti Dalvi Yeah. Absolutely. But across Boards probably industrial systems is it because of the consolidation the our capital employed has gone up.

Madhav Acharya, Chief Financial Officer On the industrial preference we acquire Emotron and Emotron Dynamic which is our capital -.

Kirti Dalvi And QEI has got consolidated in this quarter?

Madhav Acharya, Chief Financial Officer In Power Systems.

Kirti Dalvi In Power Systems?

Madhav Acharya, Chief Financial Officer That's correct.

Kirti Dalvi Okay. And sir second question again on the --if I'm not wrong sir there is some Rajasthan ACB SCADA order which was there in the market I think we have also participated on that?

Laurent Demortier, Chief Executive Officer and Managing Director Yes.

Kirti Dalvi

Could you just throw light, because I think that's quantum is very significant of almost 800 to 1000 crore?

Laurent Demortier, Chief Executive Officer and Managing Director Kirti Dalvi When do we see that outcome ?

Laurent Demortier, Chief Executive Officer and Managing Director I don't know.

Kirti Dalvi Okay. And in terms of the CapEx you have guided 300 to 400 crores. Could you just specify which areas you are planning to spend this much amount?

Laurent Demortier, Chief Executive Officer and Managing Director Okay. I think on the CapEx side we are investing in some manufacturing here in India for industrials.

Kirti Dalvi Okay.

Laurent Demortier, Chief Executive Officer and Managing Director We have also some plans for Brazil investments in the Brazil for industrial capacity again on the Power sector.

Kirti Dalvi In India sir or -

Laurent Demortier, Chief Executive Officer and Managing Director That's in Brazil.

Kirti Dalvi Brazil. Okay, sorry.

Laurent Demortier, Chief Executive Officer and Managing Director Yeah. And I think it's it's normal increased maintenance CapEx and improvement of most of our factories in India and in U.S. and in Europe. So just given this expansion, one way we are saying that there is a drop in activity in overseas business and we have enough inventory probably in most of our businesses. And through this acquisitions again. Is there a case for further expansion in this places or does it make sense at today's current environment, the environment?

Laurent Demortier, Chief Executive Officer and Managing Director I think there is a place for improvement, that's in the same product line. So, I think, we are we are mainly in the distribution transformer side, and I think there are many over like the switch gear at this year in the high voltage where we could be position. So, I think there is a place for expanding our portfolio in those geographies. And there is also a place in India to increase our penetration of the systems business just as the product business in the product side.

Kirti Dalvi Okay, okay. And sir, just a small question, if you see the annual report, this time in the standalone part, there are certain sales which has been made to our Korba unit, which is our group entity, Korba Power. And still I think though the amount is very small,there is significant debtors from that particular sale is still pending, what's an update on that, sir?

Laurent Demortier, Chief Executive Officer and Managing Director We have sold transformers to Korba Power.

Kirti Dalvi Okay.

Laurent Demortier, Chief Executive Officer and Managing Director And in returns of the business unlike any other outside business.

Kirti Dalvi Sure.

Laurent Demortier, Chief Executive Officer and Managing Director Okay. So, there is nothing different.

Kirti Dalvi So, there is no, I mean, we are not seeing any kind of delays on that, so it's on process?

Laurent Demortier, Chief Executive Officer and Managing Director Yes, with everybody else. Kirti Dalvi Sure, sir. And the last question, in our other segment or in a consolidated basis in FY11 itself. There was some 25 odd crore loss. What this other segment pertains to sir, primary?

Laurent Demortier, Chief Executive Officer and Managing Director We have some old business in a the digital, if you remember.

Kirti Dalvi Okay.

Laurent Demortier, Chief Executive Officer and Managing Director We are in the process of shutting that down.

Kirti Dalvi Okay.

Laurent Demortier, Chief Executive Officer and Managing Director So, we have to dispose some assets and some stuff like that which is what relate to the cost.

Kirti Dalvi So, there is nothing pending from that particular in this current year?

Laurent Demortier, Chief Executive Officer and Managing Director No.

Kirti Dalvi Okay, okay. And sir, last one, I missed out on the figure of order inflow in the quarter for the console as well as the standalone entity?

Madhav Acharya, Chief Financial Officer The order inflow for the console is 2,249 crore.

Kirti Dalvi Madhav Acharya, Chief Financial Officer Standalone is 1,462.

Kirti Dalvi Okay.

Madhav Acharya, Chief Financial Officer And non-India is 787 crore.

Kirti Dalvi 800?

Madhav Acharya, Chief Financial Officer 787.

Laurent Demortier, Chief Executive Officer and Managing Director 787.

Kirti Dalvi Okay, okay. Thank you very much, sir. And wish you good luck.



Operator Thank you. The next question is from the line of Bhavin Vithlani from Enam Securities. Please go ahead

Bhavin Vithlani Good morning sir. Madhav Acharya, Chief Financial Officer Good morning Bhavin.

Bhavin Vithlani Sir, in the analyst meet which was held on 30th of May, following was guided for which is 12 to 15 sorry 15 to 17% growth in constant currency, and margins expansion in the international business and 15% growth in standalone entity with margins maximum dip of 70 to 100 basis point. Now out here we are saying that the revenue growth would be lower at about 5 to 7% and the margin will dip. And we are seeing a loss in the international business. So it was less than a month of quarter to be closed, so can we throw more light on what has changed so dramatically in one month?

Laurent Demortier, Chief Executive Officer and Managing Director First of all, I think we are the I think that maybe this is when we see in a different angle, but I think a lot of things happen that was a little bit as a surprise. I think first which we might not have seen and I was not but I think for instance we talk about this order in the Middle East, the propagation of the problem across the Middle East was not softening, and I think that might be one it remains. The situation in Europe also might not have been foreseen, I think and the fact that U.S. will not stop may be as such as we thought was not talking either.

So I think for me that might have a different vision about the international business. On the local business, I think what was not softening at that time because I had specific discussion on the subject before when I came was the delay in delivery products for our transmission business here in India.

But that was not softening either. And as I said it's a timing issue and I think I have that it might be reserved in the next two quarters but I think this is what I would call -- because I think this is more depending on outside factor that we do not account for. But those are significant demand that have both exceed our international and our local market which in all was difficult to foresee on the May 30.

Bhavin Vithlani Sir I have two more questions. One is, there is a loss in the international and when one of my colleague met you at the AGM yesterday, there was an explanation given that certain transformers which was supplied to Libya and others, there was a loss where the realization was about 90% from the insurance part and the transportation which was 10 to 15% was also a loss. So is that true and is that contributed to the losses for the international business?

Laurent Demortier, Chief Executive Officer and Managing Director Yeah. Just the 90% will be through that, for given other of 10, the insurance has been able to support nine. Doesn't mean that it's 90% of what has been effective, it just for one specific order we recover 90% of our sales, that just what I said yesterday.

Madhav Acharya, Chief Financial Officer Secondly, let me clarify, there is no loss of transportation because we did not shift those transformers. Yeah.

Madhav Acharya, Chief Financial Officer And let me also tell you that we will be able to pile some stocks from this which will be able to cover our balance for the next two, three quarters.

Bhavin Vithlani Yeah can you quantify the amount on account of this, the order value and the impact on account of book?

Madhav Acharya, Chief Financial Officer That is difficult to quantify but is not very, very large.

Bhavin Vithlani Okay. The second question, the second thing was which was been also highlighted is your certain orders which were at low margins and which have now been executed for?

Madhav Acharya, Chief Financial Officer Nelco.

Laurent Demortier, Chief Executive Officer and Managing Director Yeah.

Bhavin Vithlani Not just the Nelco part. On the international business there were certain orders which have low margin, which have been now executed for and which were at losses because the material went up 20%?


Bhavin Vithlani Could we be able to quantify this impact.

Madhav Acharya, Chief Financial Officer Laurent Demortier, Chief Executive Officer and Managing Director Hello?

Bhavin Vithlani Yeah. The margins will drop by about 400 basis but still we reported profit the same. Sir I am unable to reconcile on this?

Madhav Acharya, Chief Financial Officer We have sense that the EBITDA margin will be lower.

Bhavin Vithlani

Right.

Madhav Acharya, Chief Financial Officer There is a growth in the top-line which obviously will give you a significant value in terms of contribution, so what how much should look by starting --.

Bhavin Vithlani Sir it doesn't matter if

Madhav Acharya, Chief Financial Officer So, let's meet and we will figure out.

Bhavin Vithlani Okay fine, sir. Thank you so much.


Operator Analyst Hello?


Analyst Sir, thank you for taking my questions. And sir, I want to know you have taken differently the Jalgaon franchisee whether we're looking for any other franchise out of the country or give you one-off kind of venture you have entered into recently.

Madhav Acharya, Chief Financial Officer We have taken we are trying Jalgaon franchisee going up. We are still in the process of conducting our due diligence.

Analyst Okay.

Madhav Acharya, Chief Financial Officer Once we complete the due diligence, we'll start the process how to take it forward.

Analyst Okay. But otherwise how you will see these franchise business standing out in the country and how what is the potential we are looking at from your side.

Madhav Acharya, Chief Financial Officer As of now we...

Laurent Demortier, Chief Executive Officer and Managing Director Yeah as you aware of this business right now, the way we are looking at this is more than experimental early to be able to give up new technology in the to see how far we can grow in reductions, reducing the losses and improvise the situation. That's what we are looking at. As you know this is a new business for us. So I think we are carefully looking at how we can create value out of this business. And for the time being this is an area where we believe will be able to implement lot of the CG technology in that, that will after make a reference for further development on the deposition rate. Okay. Can you just quantify what is the capital expenditure looking at industrial at least for next two years or if at all completed and you'll start to putting money in this venture.

Madhav Acharya, Chief Financial Officer As we said, we are still dealing our due diligence, once we complete the due diligence, we will be able to understand what kind of CapEx it will be required. I guess by October we'll be able to tell you what CapEx will be required for this business.

Analyst Roughly, can you please quantify...

Madhav Acharya, Chief Financial Officer We actually do include business, we cannot give any number because we have to see asset-by-asset.

Analyst Okay.

Madhav Acharya, Chief Financial Officer So we will be able to come back to you only by October.

Analyst Okay, okay. Okay. Thank you.


Operator Thank you. The next question is from the line of Sumit Kishore from JPMorgan. Please go ahead.

Sumit Kishore Hello. Good morning and thanks for taking my question.

Madhav Acharya, Chief Financial Officer Sumit Kishore Hi. Sir just a small question on working capital days as per the FY11 annual report, the working capital day seem to have gone up

from about 17 days in FY10 to 31 days in FY11.


Sumit Kishore Now you have been speaking about demands like pressures, and still deferment. I was wondering what could be the working capital impact for this fiscal and how do you feel that happening ?

Madhav Acharya, Chief Financial Officer Yeah. One is the working capital has certainly gone up. Okay. From 31 days to around approximately 26, 27 days.

Sumit Kishore Okay.

Madhav Acharya, Chief Financial Officer So there is a implication on inventory and everything else.

Sumit Kishore Okay. But are you seeing any receivables or...

Madhav Acharya, Chief Financial Officer Receivable are not sticky. They are pretty normal whatever we have been doing in the past as it's the same.

Sumit Kishore Sure. And just a small follow up question on consumer and many have been asked. But in volume terms in particularly in fans did you see a degrowth in volumes in this quarter?

Madhav Acharya, Chief Financial Officer There have been lower volumes in fans, yes, yeah. Okay, and.

Laurent Demortier, Chief Executive Officer and Managing Director It's not over the last year, it lower than our forecast budget.

Madhav Acharya, Chief Financial Officer And we believe market also has been lower. So we will have to wait for numbers to come by June end, or then by July end. So I guess the numbers are low.

Sumit Kishore Okay that's all from my side. Thank you.


Operator Thank you.

Madhav Acharya, Chief Financial Officer Can we ma'am I think it's more than an hour?

Operator I am sorry, sir.

Madhav Acharya, Chief Financial Officer It's already more than an hour, so can we quickly wrap this up?

Operator Sure. Would you like to take one more question?

Madhav Acharya, Chief Financial Officer Okay sure. Go ahead. Sure sir. The last question is from the line of Dhananjay Tikariha from Kotak Mutual Funds. Please go ahead.

Analyst Yeah. Sir, again going back to question which was asked about the guidance in terms of growth in PAT for FY12. Basically if we look at your guidance of revenue and EBITDA margins we should do about say closer to 1,100 crores of EBITDA. On that can we what will be the below EBITDA cost you are expecting, so that even then we will maintain some growth over last year?

Madhav Acharya, Chief Financial Officer [Inaudible].

Analyst Yeah, so basically if we do as if we do our estimates in no way, if we go by your guidance we can maintain any growth in terms of there will be a significant degrowth in terms of FY11 compared to FY12?

Madhav Acharya, Chief Financial Officer I do not agree with your question. And I'll be happy to again for the numbers.

Analyst Okay, okay. Thanks, thanks.


Okay. Thank you.


Operator Thank you. Ladies and gentlemen, that was the last question. I would now like to hand the floor over to the management for closing comments.

Laurent Demortier, Chief Executive Officer and Managing Director Okay. So, thank you for all those questions. I think as I repeat, the performance of the first quarter has been inline with what we have seen on the market. We expect -- I think we have been reasonably looking at the future and I think we get a fair opinion of what we will achieve for this year. So, I thank all of you for the question and look forward to meeting Madhav Acharya, Chief Financial Officer Thank you.

Operator Thank you. On behalf of Prabhudas Lilladher, that concludes this conference call. Thank you for joining us and you may now disconnect your lines. Thank you.

Q1 2012 Earnings Call - Crompton Greaves Dt-20 Jul’11 Call/100093_20110720.pdf · Q1 2012 Earnings Call - Crompton Greaves Dt-20 Jul’11 Operator Ladies and gentlemen, good morning

Documents