Sales for the current fiscal (FY2010) to grow by 20% and the profits to grow by 25% factoring in no wage revision provision and material cost remain same.
Conservatively expects an order inflow of Rs 50000 crore with about 35000 crore of power sector orders, 10000 crore of industrial sector orders and Rs 5000 crore of international orders. The company had an order intake of 59687 crore for the fiscal ended Mar 2009 and of which the power sector order is about Rs 44407 crore.
No provision towards wage revision is expected in current fiscal. For the fiscal ended Mar 2009, the company has already made a wage provision of Rs 1729 crore higher than the earlier expected amount of Rs 1313 crore. This is largely on account of increased liability on account of change in gratuity plan and higher dearness allowance. Having provided already for wage revision, the wage bill for the current fiscal will see only normal rise on account of increase in heads and DA. The wage bill for the current fiscal will be around only Rs 4500 crore compared to Rs 4192 crore in FY 2009.
In FY2009 the material cost as proportion to sales is 62.2 % and this is expected to go down by 2% for current fiscal. The benefit of lower material cost is expected to kick in from second quarter as company is still holding high cost inventory.
Inventory as end of Mar 2009 was Rs 7174 crore – about 99 days of turnover. Some of it such as long lead items will be used in first quarter and some in second and third quarter as well
Of the 12th five year plan capacity generation addition target of 95000 MW, the thermal capacity addition is about 70000 MW. The hydel is about 20000 MW and Nuclear is 5000 MW. As of now about 10000 MW of 12th five year plan orders has been finalized.
Currently the company is in the process of expanding its capacity to 15000 MW per annum from 10000 MW per annum and the expansion is expected to be completed by Dec 2009. However some work centres will see new machines installed much earlier itself. Some additional capacity in certain areas will be available progressively from June 2009 onwards.
Though lot of players entering the fray, the company is not expecting any competition in the next 3 years in sub-critical space. The Chinese though pose competition in 660 MW super critical they do not have competitive edge in 800 MW category.
Planned investment in Power JV (for 26% equity stake) can be spread over 3 years for TNEB JV as well as KPCL JV. The capital commitment for NTPC JV is about Rs 100 crore.
The bulk super critical orders for companies with domestic manufacturing base by NTPC and DVC is for 11 sets of 660 MW and the tenders is expected to be finalized in second quarter of current fiscal. If the company emerges as L1 it will get order for 6 sets otherwise for 5 sets.
Net Working capital is – 12-15 days of turnover at the end of current fiscal.
Share of EPC orders in current book came down to 30% from earlier 40%. BTG now accounts for 70%.