 "Air insulated substation (AIS) installed by Alstom")
The share of Alstom T&D took a hit of about six per cent on Wednesday after weak results.
Its March 2016 quarter numbers, released on Tuesday, missed the Street’s expectations by a huge margin. As the March quarter is usually positive for capital goods companies, analysts polled on Bloomberg expected Alstom to post revenues of Rs 1,441 crore.
With revenues at Rs 971 crore in the quarter (down 29 per cent year-on-year), the Street punished the stock. Net profit stood at Rs 30 crore, down 48 per cent y-o-y.
However, the company’s operating margins and order inflows improved in the quarter. Benefit of lower commodity prices was reflected in operating margin, which increased to 9.3 per cent, from 8.1 per cent a year ago. Order inflows stood at Rs 1,095 crore, nine per cent increase y-o-y. With this, the company’s order book stood at Rs 9,000 crore or 2.6 times its annual sales.
An analyst from a domestic brokerage said the pain for Alstom was not its order book but the slow pace of execution. With the management previously saying that only five per cent of its total order book comprised of slow moving orders, concerns on execution after the March quarter results has increased.
Analysts say they would closely watch out for management's commentary due next week on slow moving orders and reasons for delay in execution.
