jyoti structures call/113250_20110530.pdf · joining us on the call today from prabhudas lilladher...

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Jyoti Structures Q4FY11 Post Result Conference Call Transcript Representative: Mr. Santosh Nayak – Managing Director PL Rep.: Kunal Sheth – 91‐22‐6632 2257 Date: May 30, 2011

Operator

Ladies and gentleman good day and welcome to the Q4 FY11 Results Conference Call of Jyoti Structures hosted by Prabhudas

Lilladher. As a reminder for the duration of this conference all participants’ line will be in the listen‐only mode and there will be an

opportunity for you ask to questions at the end of today’s presentation. If you should need assistance during this conference please

signal Operator by pressing “*” and then “0” on your touchtone phone. Please note that the duration of this conference is 60

minutes. Joining us on the call today from Prabhudas Lilladher are Ms. Amisha Vora and Mr. Dilip Bhatt, Joint Managing Directors,

along with Mr. Kunal Sheth. I would now like to hand over the conference to Mr. Kunal Sheth. Thank you and over to you Sir.

Mr. Kunal Sheth – Prabhudas Lilladher

Yeah, thank you good afternoon everyone. On behalf of Prabhudas Lilladher I would like to welcome to management of Jyoti

Structures on the call. The management is represented by Mr. Santosh Nayak, the Managing Director for Jyoti Structures. I would

request you Sir to give some opening remarks and then we will open the floor for a Q&A.

Mr. Santosh V. Nayak – Managing Director

Thank you Kunal and thank you for all the people who are attending this call, conference call. Thank you for the continued interest in

the company and thanks for your time. I would start with the turnover of the company. The company has achieved a gross turnover

of about 2460.82 crores; this represents a growth of about 20% as compared to what we achieved last year. The breakup of sales of

these 2460 crores between three segments is transmission lines is 76% and substation and RE is 24%. Further the break up the sales

in domestic and in export in this would be 86% of the sales is domestic and 14% is export and deemed export. The tonnage which

represents the turnover in this sales turnover is about 150985 metric tonnes. Break up of cost I will get into the break‐up of cost, the

cost of material as a percentage to sales is 56%, staff cost is 3.01%, erection and sub‐contractors cost is 18.87%, other expenditures

is 10.32%. depreciation this year as compared to last year has gone up by about 3 crores, last year it was 16.9 crores, this year it is

20.17 crores. PBT has gone up by 7.24% as it is 7.01%; capital expenditure incurred in the last year is 40.82 crores, broadly this

significant distributed in CNC machines, in the factories about 16 to 18 crores and 20 crores is the construction equipment and about

2 to 3 crores is software expenses and hardware in the offices. The total borrowing of the company is 476 crores including term loan.

The average cost of borrowing is 11%. The letters of credit outstanding average in the year would be about 400 crores and the

discounting rate for these letters of credit is 9.8%. The raw material as days would be 35 days, finished goods is 2.5 days, debtors are

around 164 days. We have executed about 752 crores sales in the last quarter and what we have got as fresh business is about 1100

crores, of which 1100 crores, 500 crores is MSEDCL and MSCTCL and the balance would be from Power Grid, RRVPNL, Bhutan

Electricity Board, HPSEB and others. This is on the order book and so we have started the frontier with the 4500 crores order book

and the break‐up of client wise orders are Power Grid constitutes about 24.66% to say about 25% as power grid, private players are

about 13%, the utilities would be 27% and other utilities including export would be about 35%. And in other utilities I am considering

DVC, Chhattisgarh, Rajasthan, Bhutan Jammu & Kashmir, HVAC, Uttarakhand, all this would be in there. So this is as far as the order

break up of starting of the year. Coming to the subsidiaries the not really subsidiaries the joint ventures in Dubai is Gulf Jyoti

International, that company has achieved a turnover of about 1100 million Dirhams for the year ended 31st December and has

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earned a profit of 5.7 million Dirhams, that’s the first time it has made profits. The order book that we started on 1st of January was

Rs. 1100 crores. Going forward we feel that we should be doing well. Jyoti Africa has started the year as on 1st of April 2011 with an

order book of 340 million Ryan and the other year we completed a job that they had but we quoted for a large number of tenders in

AFCOM but I think AFCOM took some time to award the jobs but fortunately we have now one more 765 KV job and a 400 KV job

and we are looking at seeing two more jobs from AFCOM. From Jyoti Africa’s point of view we feel that this year not this year we

should be able to turnaround. So this is the presentation that I would like to have. I would like to now I will let you people ask the

question, that you have.

Operator

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press “*” and

then “1” on their touchtone telephone. Participants are requested to use only handset while asking a question. Anyone who has a

question at this time may press “*” and then “1”. The first question is from Chinmay Gandre from Asit C Mehta Investments. Please

go ahead.

Mr. Chinmay Gandre – Asit C Mehta Investments

Good afternoon sir. Yeah I actually wanted to know about the NCD issue I think 93% of it got subscribed.


Yeah.


And that means around 9.346 million NCDs were allotted. So how much would be, how much did the promoter subscribe in it

because like promoters were allowed to subscribe for additional subscription if others did not subscribe?


I think whatever was available as per the prospectus for promoters to subscribe they subscribed to it.


So you mean that we just wanted to understand that previously it was like 27 and now it is like 27% promoter holding so post

dilution how much would that be?


Are you asking about NCD?


Yeah NCD and along with that two attachments.

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There is a time for that, now it is only NCD.


Ok and right now how much would be working capital and long term loans could you give me the break up?


370 crores.


Would be working capital. And regarding the US how much could you share some light on like how much CapEx and what is going to

be done in going ahead?


We have formed a company there called Jyoti America, with an objective of setting manufacturing facilities in US. The total project

cost is about $30 million and we got the Board’s approval in the first week of December after which we went ahead and bought the

land over there. So presently what we have done is we have leveled the land and the piling is over and we have ordered the

machinery and all that should be coming in the next few months. And the factory should be operational by November.


November this year?


Right.


And mostly the entire 30 million would be spend this year?


IF we have to.


Yeah and as till April you have spent anything?


May be for the land. Advances to the suppliers.

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How much would that be broadly?


Say about 4 to 5 million. 4 million maximum. The land was 2 million.


And regarding order inflow for FY11 how much that would be?


You mean the whole year. I have given the figures of the quarter I don’t have unfortunately the whole year. but I think Sudhir has

been sharing the quarter wise, so I thought i will share this quarter.


Ok. Thank you.


Thank you.

Operator

Thank you. The next question is from Rahul Agarwal from Anand Rathi. Please go ahead.

Mr. Rahul Agarwal – Anand Rathi.

Good afternoon Sir. Sir just wanted to have a segmental breakup of the 4500 order book in terms of transmission and.


Sure, I am sorry I missed it. Transmission line is 69%, substation is 20%, and rural electrification is rest.


All right and you said Gulf Jyoti order book was 1100 crores as the start of the year. could I have figure for 31st March or 1st April?


They would have executed one second, on 1st of April?

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Yeah sir.


It would be say 900 crores.


And this order book of 4500 crores how much would be the domestic sir?


Can I come back to you?


No problem Sir. And one last question could you help me with some balance sheet figures if it's possible, gross block and net block.


Right away I don’t have but I can note down and come back to you before the call ends. Ok I have two things to give you one is the

domestic and the deemed export, export and the gross block and net block.


Yeah. If you don’t mind you can also provide me the creditor’s numbers if it's possible. Thank you very much.


Ok. Thank you.

Operator

Thank you. The next question is from Sandeep Tulsian from JM Financial. Please go ahead.

Mr. Sandeep Tulsian – JM Financial

Good afternoon Sir. Sir firstly I wanted to know you have booked a large amount of other income during the quarter of about 7

crores. So if you could just break that figure up for as a onetime figure to just indicate why it is so much?


Actually Sandeep we have been extending help or rather loans to our subsidiary to Jyoti Africa. And we have provided interest on

that. Now that the order book is good and we see more orders and we have provided for interest on that. It's not one time; till they

pay back this arrangement will continue.

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So sir this interest income which has been clubbed in other income.


6 crores.


6 crores and the total amount of loans, how much could that be subsidiary.


I will make a note of it but I don’t have it right away but I can give it to you.


Ok and sir secondly also looking at our balance sheet, the investments have increased from 20 crores odd to 70 crores. So is this?


Because of Jyoti America.


Because of Jyoti America or is there something else?


Jyoti America.


And Sir secondly we have raised money through this NCD issue and earlier in the last part you were indicating that this is basically a

hedge to reduce our interest.


That’s right.


So what was our interest cost sir earlier and how much has it come down by?

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Actually the interest on the NCD is 7% and we got this money in our system in the month of February and you will have to give some

time for that interest to come in. our average cost of borrowing is 11% so I think in an environment where the average interest cost

is 13% plus I think 11% is because of this structure that we have


And sir lastly could you just indicate the large orders which are there currently in pipeline which you expect to close down in the

next 6 to 9 months?


I think what I can do is I can give you the offer, offers given by us. The number or the offers given by us or rather the tenders which

are to be decided. And that number is 4900 crores and also the tenders that are on the horizon now are about 4600 crores.


So you have already submitted bids for?


4900 crores. And we are yet to submit for 4600 crores.


Is there some number available where quantum of orders where you are given currently?


I don’t think it is right for me to share that.


You cannot share that?


I don’t want to because there is a sip between the cup and the tea.


So can you give us some kind of color on which SEBs are currently going for expansion, these have more proportion of?

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MSEB and MSCTCL is the one which is give us the maximum orders like I said in the last quarter we got 500 crores worth of orders

from MSETCL and MSEDCL. And then the other utilities that we have been working with are the DVC, Chhattisgarh, Rajasthan,

Bhutan, HPSCV and Uttarakhand.


So these are pipeline order are also from the similar SEBs?


No. I think this is what we have in our mix. You want going forward?


Yes.


Going forward I can tell you that the MPV is about 1500 crores.


Which one sir?


MPV, Madhya Pradesh Electricity. And then power grid would be 2400 crores and then the private sector would be about 1000 plus.

This is what we have submitted and then going forwards power grid would be again 1000 plus then the private sector would be

about 3600 crores.


Ok and then lastly on the kind of pricing that is currently being offered in the market you have seen increased competition too,

competition in the PGCL order which had come up and also the kind of orders that Jyoti Structures has received was very much low

in often PGCL.


That’s right.


So I would like to know what are your comments on the current pricing levels and why have we been not so aggressive in taking

these orders and will we be able to continue you know the kind of growth rate that you are kind of forecasting for the next two

years based on current inflow, will you be able to maintain that or not?

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Sandeep after this year has gone by I feel a bit more confident having a achieved a turnover of 2400 crores, again having an order

book of 4500 crores, we feel that it is possible that to get orders and also maintain expected EBITDA levels. I think if you see what

the offer submitted by us and the orders on or the business on horizon, it's about 10,000 crores which are quite substantial. From

that we realize that business is available and you can also then decide and then target business that you would like to get so that

your profitability is maintained. So I feel that it is fair to say on my part that it is possible to grow at about 20% with these kind of

margins with a little bit of caution while quoting for the jobs.


But Sir our working capital requirement is also very substantial I mean we have not been able to reduce that, so you know going

forward in this year we might see some more increase in working capital requirement. So what steps are we taking or how are we

ensuring that that this does not go off limits in a high interest rate scenario basically?


Two things, I think your point is well taken and my effort is to see that the this working capital borrowings are reduced and that

could be only possible if we can have our data collection in a much efficient manner, the production cycles to be controlled in a

much tighter way. I think this is an effort which I personally get into and I would definitely keep in mind that we have to get the

working capital lower. So this is a constant effort but when we are dealing with the utilities and the cycle that we have if you can

imagine in that a tower which gets manufactured it has to travel from the factory to the site and then the processing is done at the

site and then at the controlling offices. So this time taken is also longer and then you have retentions and then there are some

orders which are contracted in a manner that you do not have advances. You get whole of the payment after you have done

substantial amount of work, all these also contributes to the debtors going higher and in the working capital going high. But I am

acutely aware that this is an issue which will have to be taken care of and especially in an environment with the interest rates are

higher.


Sir, just generally speaking the debtors that the payment cycle for the current orders which are more from SEBs and private players

as compared to PGCL would be longer or do you prefer having more PGCL orders from a working capital point of view?


I think today none of utilities are having any money problems as per se. most of the utilities are tie up with their funds and they are

come with their jobs so I think to say that power grid would be better but power grid may be more organized but I don’t think any of

this utilities State Government utility are so bad that they will take 6 months or earlier to make your payment. That’s not the case.

So it's our internal systems which have to improve and some contracts where the payments are linked to completing of some

milestones those are the contracts which will require higher working capital.


You are having more of those kinds of contracts now in your order book?

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Not really.


It's more or less the same.


Yeah. That’s right.


Ok sir Thank you very much.


Thank you.

Operator

Thank you. Before taking the next question, we would like to remind the participants to press “*” and “1” to ask a question. The next

question is from Viral Shah from PUG. Please go ahead.

Mr. Viral Shah – PUG

Hello sir. Just wanted to understand the comparative scenario especially from PGCIL point of view are we actually seeing still lot of

players bidding at lower price levels and how are we placed and what is the future?


If you heard me saying that off the order book that we have today, PGCIL contributes to about 25% which is used to about 5 years

back atleast a 65% to 70% levels. From that stage we have managed to bring it down to 25%. So I think that’s a strategy which will

going forward continue and will try to disperse our customers in a manner that we are not reliant on one customer so that even if

the customer has a strategy to make the pricing work competitive, we will not be affected. But coming back to power grid. Power

grid placed a few orders last year here with the non‐main stream players and that is changing. I think if you have seen them in the

last quarter a few of the main stream players got jobs where in we were not targeting those jobs I think maybe in the coming

quarters we are looking at about 450‐500 crores worth of jobs from power grid. Hopefully we should be lucky.


Sir and the last question is on the consolidated numbers, could you share those numbers?


Yes you mean the topline and the bottom‐line?

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Yes.


The consolidated gross sales are 24807. I think I will come back; figures are not tallying with what I have. Ok the Profit after tax is

100 crores.


Ok Thank you.


Thank you.

Operator

Thank you. The next question is from Sanjeev Sahu from B&K Securities. Please go ahead.

Mr. Sanjeev Sahu ‐ B&K Securities

Good afternoon sir. Sir just wanted to know your tax charge has come down year‐on‐year.


Tax rates, ok.


So any particular reason that you have tax rates coming down to particular levels.


No particular reason that I am aware of. But I can come back to you. This is the provision that our tax department has told us and we

have made the tax provisions.


Yeah that’s it from me. Thank you.

Operator

Thank you. The next question is from C A Manish Maheshwari from Blue Chip India. Please go ahead.

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Mr. C A Manish Maheshwari – Blue Chip India.

Hello. Yeah good afternoon Sir.


Good afternoon Manish.


Sir couple of observation from the income statement itself.


Please go ahead.


Couple of costs have you know shot up significantly. On consumption of raw materials have shot up has went up by 54%.


Are you sure?


Yes, sir.


As a percentage to sales?


As a percentage to sales.


What I have is last year it was 60.64%; this year it is 56%. Unless my people have given me wrong numbers.


Sir with erection and sub‐contracting expenses has almost went up by 55%.


It was 15.05%, this year it is 18.87%. so are we looking at the same results Manish?

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Absolutely Sir this is the result I mean I have got from the company itself.


Yeah I have it in front of me. So as a percentage of sales.


Correct.


So if you take this figure which is 4507.7 divided by 2460.


Which particular figure are you?


You said erection and sub‐contracting expenses?


Correct.


That is 18.31%.


As a percentage of sales?


Yeah. That’s what I read out.

Operator

Excuse me this is the operator. Mr. Maheshwari?


Yes.

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Hello. I am sorry, yeah.


Hello. Sir I am talking about year‐on‐year.


Yes I am also talking of year‐on‐year. I have taken a figure of 4507.70, ok erection and sub‐contracting expenses, and then

compared, you take it out as a percentage, try to work out the percentage.


Sir, year‐on‐year, I am talking quarter wise. This quarter corresponding with the last quarter.


Ok. 880 versus


1365


1365. Ok that is possible Manish I think it depends on the quantum of work done in construction that is possible. Ok but on the

yearly basis, it will be, it will give you the complete picture.


Ok. The interest cost has also shot up by 33%. Again quarter‐wise.


Ok I would like to draw your attention to the yearly performance and would like to assure you that it will continue in this manner in

the coming year also.


Sir yearly also it has shot up by 21%.


The interest percentage Manish what I have is 3.9% as compared to what we had last year. Sorry what we had last whole year for

the last year was 3.97% and the year before that was 3.89%.

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Ok sir, couple of actually I joined the call a little later, I believe we have an order book of 4500 crores and out of which 25.66% is of

PGCIL.


25%.


And Private is 13% and utility is 25 and other utility and export is 35%.


Yeah right.


And sir what will be the CapEx for FY12?


Last year we had kind of about 40 crores. This year should also should be down to 30 to 35 crores.


Sir, loan fund is I mean debt is inclusive of term loan?


That’s right.


Could you provide me with the breakup?


Of working capital and.


Correct.

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I think working capital is about 100 and sorry, the term loan is 100 and the balance is working capital.


Ok. Term loan is 100, right?


Right.


All right sir, thank you. Thanks a lot.


Thank you.

Operator

Thank you. A reminder to all the participants in the conference, if you wish to ask a question at this time you may press “*” and then

“1”. The next question is from Radhika Poddar from Sharekhan. Please go ahead.

Radhika Poddar – Sharekhan

Good afternoon sir.


Good afternoon Radhika.


Sir, just couple of questions. Sir with your presence in the Middle East and African regions do you see any of your projects getting

delayed in terms of execution and if you could elaborate that as a percentage of the total order book?


Probably it is not confuse this with order book of Gulf Jyoti and Jyoti Africa, is not included in our order book Radhika. These are

separate companies and their order book is completely different.


Ok and in the light of rising interest costs I just wanted to understand if you expect any kind of increase in the interest cost going

forward?

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You mean we have the borrowing number is known to you.


Yeah.


I think what will happen is that if the interest rate was goes to the present like today or average of this 11% so if this goes 12%. I

think as I said earlier that my effort would be to try and bring down the working capital lower but if not then that would be the

increase otherwise I don’t see any further increase.


Ok so basically if the working capital need goes up the interest rate would go up?


The working capital need would not go up; it will be around this level.


Ok and that’s all from my side.


Thank you.

Operator

Thank you. The next question is from Neeraj Marathe from HU Consultancy. Please go ahead.

Neeraj Marathe – HU Consultancy

Hi, good afternoon sir.


Good afternoon.


Sir most of my questions are answered just had to ask this one thing about the pledging of the share, our promoter holding is

already not very high out of which also 65% is pledged. So if it is possible could you just share the purpose of like what do we intent

to do with it going forward?

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You mean how do we get this pledged revoked is it?


Yeah I mean.


By paying the loans back.


Ok so for what purpose we had taken these is it possible to share?


I think you heard somebody asking as what was the promoter’s contribution in the NCD issue so it was that.


No problem Sir. Thank you. Second thing was just the entire timing of the NCD issue seems to suggest that you are visualizing some

bigger orders coming in for which you know?


We were visualizing?


Yeah sir?


You are charging me of insider trading?


No sir.


Don’t do that. Please don’t do that.

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That is not the intention sir. What I am trying to understand is that has the you know entire scenario from power grid, has it started

going the way the company, the management foresaw it or are the orders started flowing in?


See I think I am repeating this, see about 5 years back our order book from Power grid or as a percentage of power grid orders in our

order book would be about 65 to 70%. I think today it has come down to 25%. We have been able to diversify our customer base

into other customers which is a good strategy because if you are dependent on one customer, you would be also prone to anything

that happens with the customer, you would be adversely affected. So I think this strategy has been done well for us. I think if you see

despite the order book from power grid being 25% we are still being able to grow at 20% and we are still being able to have our

profitability as we had targeted so what better?


Fine sir, fair enough.


Thank you.

Operator

Thank you. The next question is from


Can I give this clarification on the tax as a percentage, I have a note saying the tax as a percentage of total income has gone down by

2.6% to 33.73 in current year mainly due to reduction in deferred tax charge which is on account of reduction of surcharge on

income tax for FY 2011‐12 and also due to the fact that the tax rate for 2010‐11 has reduced from 33.99% to 33.2175% Further

disallowable expenses like which is debited to profit and loss account has reduced resulting in less disallowance. The cumulative

effect of the above factors resulted in less tax as a percentage of income. I hope that is the answer.

Operator

Thank you sir. Could we move onto the next question?


Yes please.

Operator

The next question is from Anand Raghavendran from Allegro Capital. Please go ahead.

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Mr. Anand Raghavendran – Allegro Capital

Good afternoon sir.


Good afternoon.


Sir, during the last year what was the total value of orders from power grid?


I don’t have that number right away but I can provide to you.


Ok I mean just approximately, would it be higher than the previous year or lower that the previous year?


I really don’t want to take a guess but I can provide that number to you.


Ok sir sure. The reason why I wanted to know was because of choice that power grid orders might be different or was there any

slowdown in the orders issued by power grid?


I think people who have been following this industry know that power grid has been ordering on parties which are not the main

transmission players in the last year. most of the orders have gone to companies which were new comers or the non‐main stream

players. So as a result of which all the main stream players did not get their share of businesses from power grid. This is the fact

known to all the people who follow this industry. But going forward we feel that this situation will change and the mainstream

players should be getting their due share.


Yes sir I understand that. So that’s what I was about to ask you so. In future also do you see that continuing or the core players will

be getting?


It will be welcomed if we get business from power grid, we’ll be happy but as a strategy we don’t want to be dependent on power

grid and fortunately for us there are enough jobs from the other utilities so also the private players, the private players are also

becoming a significant player in the transmission business which is a happy situation for the main stream players like us.

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Yes, sir, ok sir, that’s it from here.


Thank you.

Operator

Thank you. The next question is from Mehul Mehta from Tower Capital. Please go ahead.

Mehul Mehta – Tower Capital

Good afternoon Sir, in terms of your beginning of the year, you shared numbers on South African subsidy, can you repeat that

please?


I said the order book is 340 million Rand as of 1st of April.


And I believe last year I mean in terms of FY11, there was hardly any operation.


That’s right. We finished the job. We quoted for a lot of business and now we are starting to get the jobs and as of 1st of April the

order book is 340 million Rand and we are expecting a few more jobs.


And in terms of profitability I mean like sitting overhead expenses like kind of, so what would be P&L looking like?


The P&L has a loss.


Can you share that?


That is what has brought down our consolidated figure; it will be something like 4 to 5 crores.

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And we don’t consolidate the JV numbers that would be looking in associate expenses?


That’s right.


Thanks.

Operator

Thank you. The next question is from Radhika Poddar from Sharekhan. Please go ahead.


My question has been answered.


Ok Radhika.

Operator

Thank you. The next question is from Pankaj Kumar from KJMC Capital. Please go ahead.

Mr. Pankaj Kumar – KJMC Capital

Yes. My questions is regarding US subsidiary regarding the expansion that we have what is the kind of business that we are

expecting from? What is the kind of business in terms of annual revenue that the unit can generate and when we can see it to

achieve it?


The capacity that we have targeted in US is about 36,000 metric tonnes which is on twin shared basis. And this factory should be

operational by November and December. So what we can see is whole year’s revenue from 2012.


And what it could be roughly?


If you take say $2000, I am throwing a number I think your question is I should not be answering because who knows what price it

will be but I am just trying to guess to give you a ballpark figures. It should be $72 million.

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And sir whether we require any kind of pre‐qualification apart from having 10 years for having business in the country that country?


I think what better than having a manufacturing facility and backed by a company which has got 30 years’ experience.


Just want to reconfirm the what is the kind of guidance that you are giving for FY 12?


I said in the beginning that the turnover that we achieved the year gone by and the percentage growth of about 20% on year‐on‐

year growth in revenue. I feel confident that we should going forward we should be able to keep the momentum.


Ok sir. Thank you.

Operator

Thank you. The next question is from Nayan Mehta from 21st Century Share & Security Ltd. Please go ahead.

Mr. Nayan Mehta ‐ 21st Century Share & Security Ltd

Yeah many of my questions have been answered, just one last what is the tonnage on the current order book, how much it has

transpired into?


It should be about 1,80,000 tonnes but please don’t take it as a pinch of salt. I can get back to you. But it should be between

1,50,000 and 1,80,000.


Ok sir. Thank you.

Operator

Thank you. The next question is from Pranav Gokhale from Religare Asset Management. Please go ahead.

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Mr. Pranav Gokhale – Religare Asset Management

Good evening sir. Sir, good set of numbers. I have a question on your order book. On your order book of 45 million, has the

execution period of order came from the change in mix in or do we see any of these orders being executed post financial closure or

some project or something?


Actually most of these jobs are received as a result of tenders announced. And awards being done on the offers submitted. Because

when they announce the tenders the financials have already been taken care of by those people.


And in terms of execution?


Most of the jobs now a days, Pranav are 18 to 24 months. Infact some are lesser than that. See this is a change that has happened in

the last 3 to 4 years that earlier that about 30 months or 33 months or 36 months. The period has come down sharply, most of it is

now 24 months or 18 months some are 12 months. So things are becoming tight as far as execution is concerned.


No because I remember earlier we had orders which were executed on a period of 3 years for a private company, which we have

got, so there is a no such orders in the current order book?


No.


Ok sure, Thank you.


Which one was that of 3 years, I don’t remember that. Maybe they got delayed but I don’t think a company starts with a 3 year

execution horizon now.


I think the order from Reliance was for.


No I think it could have started immediately, they had no problems when they started the execution.

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25 | P a g e


Sure. Thank you sir.

Operator

Thank you. A reminder to all the participants at the conference, if you wish to ask the question at this time you may press “*” and

then “1” on your touchtone phone. The next question is from Bhoomika Nair from IDFC. Please go ahead.

Bhoomika Nair – IDFC

Yeah sir most of my questions have been answered, sir the US facility you mentioned would be you know operational. But what kind

of would it be making it in the first year of operation?

Mr. Santosh V. Nayak – Managing Director.

A very difficult question. I would love to say yes to that but I will keep my answer and keep fingers crossed till we do that.


And sir, the we had a Reliance infrastructure order which was supposed to be completed by end of May of the current year, is it

largely on track to be completed?


Yes we have completed four lines out of it and the rest of it is on track. But maybe two lines there are some write‐off issues near

Pune. So if those are resolved then those two lines should also get completed.


So would it fair to say that roughly about 80% of the work would be completed?


Yes.


And sir your debt of about 476 crores include the NCD portion as well?


True.


Ok fine.

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26 | P a g e

Operator

Thank you. If you wish to ask the question at this time you may press “*” and then “1” on your touchtone phone. The next question

is from Sandeep Tulsian from JM Financial. Please go ahead.

Sandeep Tulsian ‐ JM Financial

Sir I would like to know what is our current employee strength and how much additions are you planning in the current year of

FY12?


We have about 1200 people and we have 300 workers. And as far as recruitment in concerned it's an ongoing process for us because

we have to staff the contracts as when we get so if you are finished on jobs we transfer them. If not then we recruit. We don’t have

a set policy as to how many numbers we may have.

Sandeep Tulsian ‐ JM Financial

Thank you.

Operator

Thank you. The next question is from Nayan Mehta from 21st Century Share & Security Ltd. Please go ahead.


Just pertaining to our dividend policy as I say, the company has made highest ever profit over the last 5 years and yet our dividend is

still the payout ratio is around 4%?


What is this? I thought that we had given 75% dividend this year did you read that as against 50% last year.


I did not see there is an interim dividend actually. Ok.

Operator

Thank you. The next question is from Chinmay Gandre from Asit C Mehta Investments. Please go ahead.


Actually if we exclude the NCD part what would be the average cost of debt for us?

Jyoti Structures

27 | P a g e


I don’t have it separately. Why should I do that? I am working out the average cost.


Which you wouldn’t want an answer, the interest keeps on going up and down. Last year it was 9.5, so would you get answer from

what I say? There is no indication.


But including this like now 11% so if I remove.


You can do that.


NCD is retainable after 18 months.


We will see after that point in time.


Ok, Thank you.

Operator

Thank you. Ladies and gentlemen that was the last question.


Thank you very much for organizing this. Thanks very much for all of you to patiently listen and giving your time and showing the

interest in the company. Thank you so much.

Mr. Kunal Sheth – Prabhudas Lilladher

Thank you so much sir.

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.

Jyoti Structures

28 | P a g e

Moderator ‐ Farah

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.

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