Q. How would you assess the Company’s performance, during the year under review?
A. The momentum that we picked up during second half of FY 14 continued to gain strength quarter after quarter. Even after a moderate growth in the global economies and bleak demand scenario in our domestic market, our performance during the year has been strong. The key reason has been a strong order intake and on-time delivery for export based products and aftermarket services. The consolidated total income during the year FY 15 has grown at 26% over FY 14 but the growth has been much higher at 33% at the net profit level due to margin improvement. Our consolidated EBITDA margin in the year FY 15 has gone up by 200 bps and stood at 24% which we believe, is one of the best amongst the industry. The Company’s order intake during the year was 6.46 billion, an increase of 9% over FY 14 that too after achieving a growth of 23% in turnover and the order book as of March 31, 2015 stood at 6.0 billion on a standalone basis and at 7.5 billion consolidated.
Q. How does the growth in exports impact the overall performance of TTL?
A. The export performance during the year has been robust and our products are well accepted across the emerging economies of South & Central America, Asia and Africa as well as developed economies of Western Europe. The total income during the year from exports has gone up by 75% to 2.64 billion whereas export order intake has increased by 100% to 2.93 billion. The proportion of exports to the total sales has also gone up from 29.7% in FY 14 to 42.3% in FY 15. Our export foot print has reached to more than 50 countries and we currently hold a strong order enquiry from close to 100 countries. Even after significant depreciation in the Euro and Yen, we continue to maintain our competitiveness in the global arena due to our value engineering and efficient supply chain. Our export order intake in FY 15 was primarily from biomass and other renewable sources. Upon execution of these projects, we believe that there could be increased growth opportunities from these sectors.
Q. Has GE Triveni Ltd. performed as per expectation and what is your outlook on the JV going forward?
A. The performance of GETL during the year has been encouraging as the JV made net profit for the first time. Though the year started with robust carry forward orders from FY 14, order intake during the year has been subdued due to many customers postponing their sourcing decisions to FY 16. The order intake in FY 15 stood at 0.7 billion and the total order book at the end of March 2015 stood at 2.0 billion. The outlook on the JV is positive. We expect that the turnover in FY 16 would be much higher with multiple overseas deliveries scheduled to Philippines, Indonesia & Vietnam. These would act as good reference point for future order intake. Further, the enquiry book, both in domestic and international market is quite good, which should enable the JV to have good order inflow during FY 16.
Q. How has aftermarket business performed during the year?
A. The aftermarket sales during FY 15 grew by 32% and the share of the aftermarket sales to total sales has gone up from 21% in FY 14 to 23% in FY 15. The order intake has also been healthy with the aftermarket order booking at 1.44 billion as of March 31, 2015. Our foray into providing repair solutions for other makes of turbines in FY 14 has started bearing fruits, predominantly in the international markets. During the year, to strengthen our international business including our aftermarket service offering, we established two overseas subsidiaries, one in UK and one in UAE, which would further enhance growth prospects in this high margin business. Having achieved some breakthrough orders in repair & refurbishment from the international market, the export segment of aftermarket business is expected to grow in the coming years similar to the growth in export of product business.
Q. What are your expectations from the business going forward?
A. Our export foray has been successful and to further increase momentum in our export business, both in products as well as aftermarket, we have setup overseas subsidiaries and are currently planning to post service personnel there and also arrange local support tie-ups across selected geographies. With these increased activities, we expect significant growth in export order booking for both products and aftermarket services in the coming years.
In the domestic market we currently hold a strong brand equity and are the leading player with 63% market share. In FY 15 we have witnessed good order enquiry but due to prevailing economic slowdown, most of these enquiries are deferred to FY 16. We expect the economy would revive gradually over the coming quarters and we are well placed to tap all new opportunities. Also the government has significantly increased its focus on renewable energy and they plan to add 175,000 MW by 2022 of which 10,000 MW will be Biomass. These initiatives would also lead to better growth prospects for us in the domestic market. Our JV, GETL has performed well. With the scheduled deliveries in FY 16 and increased marketing activities, the growth in GETL both in terms of order intake as well as profitability is expected to improve further. The overall business is well poised and we are confident of a strong growth in the coming years, both in terms of turnover and profitability.
Triveni Turbine Limited
12-A, Peenya Industrial
Area, Bangalore, Karnataka
- 560 058, India