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The financial results of the Company for the year FY 16, compared with the previous year are summarised hereunder:
| ( in Million) | |||
|---|---|---|---|
| Description | FY 16 | FY 15 | Change % |
| Income from operations | 7081.4 | 6255.2 | 13.2 |
| Other Income | 138.7 | 276.5 | -49.8 |
| EBITDA | 1693.9 | 1533.2 | 10.5 |
| EBITDA Margin | 23.9% | 24.5% | |
| Depreciation & Amortisation | 139.9 | 145.0 | -3.5 |
| PBIT | 1554.0 | 1388.2 | 11.9 |
| PBIT Margin | 21.9% | 22.2% | |
| Finance Cost | 3.4 | 4.5 | -24.4 |
| PBT (Before exceptional item) | 1550.6 | 1383.7 | 12.1 |
| PBT Margin | 21.9% | 22.1% | |
| Exceptional Item | - | 28.0 | |
| PBT (After Exceptional Item) | 1550.6 | 1355.7 | 14.4 |
| PAT | 1038.2 | 910.8 | 14.0 |
| PAT Margin | 14.7% | 14.6% |
Despite challenging business conditions in the capital goods market, the financial performance of the Company has been resilient and it achieved record turnover and profitability. While the domestic market continued to be subdued, the Company’s relentless efforts in the international market paid dividends in terms of establishing market presence and penetration which resulted in increased export order booking – exports formed 58.6% of the total order booking during the year.
The highlights of the performance are:
- The total income from operations during the year under review was 13.2% higher at 7.08 billion. The export turnover during the year was at 35.8% of the total turnover as against 42.3% in the previous year. The export order booking during FY 16 is higher by 52.5% over the previous year, which will result in higher proportion of export turnover in the FY 17. All the sales made to domestic entities, including our subsidiary and JV Company, aggregating 886.7 million for onward exports have been considered as domestic sales.
- The aftermarket business grew by 6.5% over the previous year, mainly driven by higher export of services.
- PBT at 1550.6 million and PAT 1038.2 million increased by 14.4% and 14.0% respectively.
The Company’s ambitious strategy to expand the geographical
reach and broad-base the market for its products has yielded
positive results. The Company believes that the export market
offers enormous potential for the products of the Company,
including for its specialised aftermarket services. It will be
achieved through further penetration of the export markets
and by being in the proximity to its customers by establishing
overseas presence through its foreign subsidiaries / offices /
establishing facilities to undertake aftermarket services.
The domestic market for steam turbines continued to remain
flat for the fourth consecutive year. However, the margins
and the market share could still be preserved through cost
optimisation. With the various policy initiatives being taken by
the Government, it is expected that the business sentiments
will improve and the investment cycle will commence. The
Company is well positioned to take advantage of higher
demand through additional manufacturing facilities being set
up in a phased manner.
As per the Consolidated Financial Statements for the year
under review, the Turnover and Profit after tax increased by
22.4% and 18.9% respectively. The Subsidiary Company, GE
Triveni Limited, also achieved record turnover and profitability
and has fully wiped out all accumulated losses.
Other Income
The Other Income of 138.70 million during the year includes 86.6 million towards net exchange gains. In view of significant exports, the export receivables are much higher than the import payables. It is the policy of the Company to substantially hedge its foreign exchange exposures. While the exchange gains have been classified under ‘Other Income’ as per the applicable accounting standards, for all internal assessments, the Company considers such gains as operating revenue and it is thus factored in the computation of EBITDA and other profitability ratios.
Raw Material consumption & Increase/Decrease in inventory
| ( in Million) | |||
|---|---|---|---|
| Description | FY 16 | FY 15 | Change % |
| Raw material consumption/Change in inventory | 3994.3 | 3647.5 | 9.5 |
| Percentage of sales | 56.4% | 58.3% |
The percentage increase in raw material cost was less than increase in turnover by 13.2% and consequently, the percentage material cost to sales is almost 200 basis points lower than the previous year. While the Company strives to continually rationalise material cost through value engineering and supply chain productivity, it also depends on the product-mix (extended scope of contract, extent of aftermarket services etc.) and extent of margins.
Personnel Cost, Administration Expenses and Depreciation
| ( in Million) | |||
|---|---|---|---|
| Description | FY 16 | FY 15 | Change % |
| Personnel cost | 632.0 | 600.9 | 5.2 |
| Percentage of sales | 8.9% | 9.6% | |
| Other Expenses | 904.4 | 748.3 | 20.9 |
| Percentage of sales | 12.8% | 12.0% | |
| Depreciation & Amortisation | 139.9 | 145.0 | - 3.5 |
| Percentage of sales | 2.0% | 2.3% |
Personnel Cost
The increase in personnel cost remained normal and was reflective of annual salary increase.
Other Expenses
Increase in Other Expenses were mainly due to following reasons:
- Increase in manufacturing costs by 41 million was mainly in respect of tooling and other indirect materials and consumables required in manufacturing higher range and specially designed turbines for catering to export market.
- Increase in marketing, packing and transport expenses aggregating 65.1 million relating to exports.
- CSR expenses of 26.4 million. As per the guidance available in the previous year, these were considered as appropriation of profits.
Depreciation and Amortisation
Since, there were no major additions to the Fixed Assets Block during the year, there was no significant change in depreciation & amortisation.
Balance sheet
Share Capital
There was no change in equity share capital of the Company during the year.
Reserves and Surplus
The Reserves & Surplus increased by 29.7% to 2627.4 million as on 31.3.16 in view of plough-back of profits after payment of tax and dividend.
Loans
The Company virtually remained debt-free throughout the year, barring some vehicles procured on hire purchase terms.
Investments
The increase in long-term investments by 13.8 million represents contribution to the equity share capital in Triveni Turbines Europe Pvt Ltd, a wholly-owned subsidiary.
Trade Receivables
The Trade Receivables stood at 1,142 million on 31.3.16 as compared to 1,534 million as on 31.3.15. The reduction in trade receivables was due to healthy collections at the year end, which also resulted in increased cash and cash equivalent.
Cash and Cash Equivalent
Cash and cash equivalent represents current investment and cash and bank balance. It was considerably higher at 379.8 million as on 31.3.16 due to aggressive collection drive and substantial collections at the year end.
Fixed Assets
There were no significant additions to fixed assets during the year. However, Capital Work-in-Progress increased from 61.0 million to 328.8 million as on 31.3.16 in view of amount spent on the civil and construction work of the upcoming new manufacturing plant near Bengaluru. The new plant is expected to be partly commissioned for production by middle of next financial year and further investments will be made in phases in line with the requirements.