Any current/future new fundraising through debt or equity?

There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript. The company has been focused on reducing debt, as evidenced by the sale of TIPL in 2016-17 which generated Rs. 350 crores used to repay debt. Financing cost has been reduced significantly from Rs. 44 crores to Rs. 21 crores. The company plans capital expenditure of about Rs. 50 crores in FY 2017-18 and Rs. 30 crores spillover in FY 2018-19, likely funded through internal accruals given no mention of fresh fund raising. The management is focused on consolidation and profitability rat

Any current/future capex/capital investment/strategic investment?

Rs. 50 crores CAPEX lined up for FY 2017-18 to set up a new plant in Kharagpur. Additional Rs. 30 crores expected as spillover CAPEX in FY 2018-19 for the same expansion. New Kharagpur factory to increase monthly production capacity to Rs. 30-35 crores. Plans to install a solar power plant at Kharagpur to reduce electricity costs, with discussions ongoing with strategic advisors. Intention to monetize about 21,000 square meters of land in Sahibabad, though progress depends on securing a suitable buyer. Focus on strengthening management bandwidth to support expansion into defense equipment manu

Future growth expectations in sales/revenue/volumes?

TIL aims to achieve a turnover of over Rs. 400 crores in the financial year 2017-18, up from Rs. 78 crores in Q1. Management expects quarterly billing of Rs. 70-80 crores in subsequent quarters, with better performance in Q3 and Q4. Order backlog is Rs. 180 crores as of June 2017; management expects this to grow beyond Rs. 250 crores by December 2017 to meet the turnover target. Customer support business targeted to grow from Rs. 66 crores last year to around Rs. 70-80 crores annually. Export revenue expected to grow to roughly 40% of total turnover by 2020, with new permissions grante

Future growth expectations in earnings/operating earnings/profits/EPS?

2017-2018 is expected to be a year of consolidation with no high profitability expectations due to previous losses. Post consolidation, significant profit growth is anticipated in subsequent years once stability is achieved. Historical crane division performance (2005-2009) showed strong profits, indicating potential if market dynamics are adhered to. Order backlog of Rs. 180 crores as of August 2017 supports a turnover target of Rs. 400 crores+ for FY 2017-18. Export business is expected to grow, potentially reaching 40% of total turnover by 2020, which should improve margins. Custo

Current/ Expected Orderbook/ Pending Orders?

Current order backlog is Rs. 180 crores as of June-August 2017. Order backlog includes: - Rough terrain cranes: approx. Rs. 20 crores - Truck cranes: approx. Rs. 35 crores - Defense orders: approx. Rs. 40 crores (including missile handling systems) - Reach stackers: approx. Rs. 40 crores (around 16 machines) Customer support orders are not included in this backlog as they are executed upon receipt. Expected order intake to reach Rs. 400 crores by the end of the financial year. Planned billing targets: - Q2 billing expected between Rs. 70-80 crores - Continuous flow of orders antici

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TIL LtdQ3 FY18Agricultural, Commercial & Construction Vehicles

TIL Ltd Q3 FY18 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: ₹217Market Cap: ₹1.8K CrSector: Agricultural, Commercial & Construction Vehicles

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

Yes

2 of 4 growth signals are positive.

Full analysis

Revenue guidance

Category 2

→TIL aims to achieve a turnover of over Rs. 400 crores in the financial year 2017-18, up from Rs. 78 crores in Q1.
→Management expects quarterly billing of Rs. 70-80 crores in subsequent quarters, with better performance in Q3 and Q4.
→Order backlog is Rs. 180 crores as of June 2017; management expects this to grow beyond Rs. 250 crores by December 2017 to meet the turnover target.
→Customer support business targeted to grow from Rs. 66 crores last year to around Rs. 70-80 crores annually.
→Export revenue expected to grow to roughly 40% of total turnover by 2020, with new permissions granted for exports to Africa and the Middle East.
→New plant setup in Kharagpur with CAPEX of Rs. 50 crores planned for 2017-18 and an additional Rs. 30 crores in the following year to boost production capacity.
→Business model evolving to meet tighter contractor delivery timelines (3-6 months).
→Management views 2017-18 as a consolidation year before significant profit growth.

Margin guidance

Category 3

→2017-2018 is expected to be a year of consolidation with no high profitability expectations due to previous losses.
→Post consolidation, significant profit growth is anticipated in subsequent years once stability is achieved.
→Historical crane division performance (2005-2009) showed strong profits, indicating potential if market dynamics are adhered to.
→Order backlog of Rs. 180 crores as of August 2017 supports a turnover target of Rs. 400 crores+ for FY 2017-18.
→Export business is expected to grow, potentially reaching 40% of total turnover by 2020, which should improve margins.
→Customer support business provides stable revenue and contributes to profitability even if product sales fluctuate.
→CAPEX of Rs. 50 crores (2017-18) + Rs. 30 crores spillover (2018-19) for capacity expansion suggests growth readiness.
→Cost control measures and reduced financing costs are expected to improve EBITDA and PBT, moving from modest profits to stronger earnings.

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Fundraise plans

→There is no explicit mention of any current or planned new fundraising through debt or equity in the transcript.
→The company has been focused on reducing debt, as evidenced by the sale of TIPL in 2016-17 which generated Rs. 350 crores used to repay debt.
→Financing cost has been reduced significantly from Rs. 44 crores to Rs. 21 crores.
→The company plans capital expenditure of about Rs. 50 crores in FY 2017-18 and Rs. 30 crores spillover in FY 2018-19, likely funded through internal accruals given no mention of fresh fund raising.
→The management is focused on consolidation and profitability rather than aggressive expansion requiring new equity or debt.
→No discussion on issuing new shares or raising debt during the call.

Order book

Yes

→Current order backlog is Rs. 180 crores as of June-August 2017.
→Order backlog includes:
→ - Rough terrain cranes: approx. Rs. 20 crores
→ - Truck cranes: approx. Rs. 35 crores
→ - Defense orders: approx. Rs. 40 crores (including missile handling systems)
→ - Reach stackers: approx. Rs. 40 crores (around 16 machines)
→Customer support orders are not included in this backlog as they are executed upon receipt.
→Expected order intake to reach Rs. 400 crores by the end of the financial year.
→Planned billing targets:
→ - Q2 billing expected between Rs. 70-80 crores
→ - Continuous flow of orders anticipated based on bullish market outlook
→Exports targeted to constitute about 40% of total turnover by 2020.
→CAPEX lined up includes Rs. 50 crores this year for new plant setup and Rs. 30 crores next year spillover.

Capex plans

Yes

→Rs. 50 crores CAPEX lined up for FY 2017-18 to set up a new plant in Kharagpur.
→Additional Rs. 30 crores expected as spillover CAPEX in FY 2018-19 for the same expansion.
→New Kharagpur factory to increase monthly production capacity to Rs. 30-35 crores.
→Plans to install a solar power plant at Kharagpur to reduce electricity costs, with discussions ongoing with strategic advisors.
→Intention to monetize about 21,000 square meters of land in Sahibabad, though progress depends on securing a suitable buyer.
→Focus on strengthening management bandwidth to support expansion into defense equipment manufacturing.

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