Susan Electricals schedules 90% of Rs 347 crore before March

Susan Electricals said 90% of its Rs 347 crore order-book-and-pipeline visibility is scheduled before March 31, equivalent to Rs 312.3 crore based on management’s stated percentage. Management did not provide a financial-year revenue forecast, saying execution of orders should not be interpreted as automatically guaranteed revenue.

What does Susan Electricals’ 90% schedule before March mean?

Susan Electricals said 90% of the Rs 347 crore order-book-and-pipeline visibility is scheduled before March 31, or Rs 312.3 crore when calculated from the stated percentage. The statement describes the planned timing of execution, rather than a reported revenue forecast or a confirmation that the entire amount has become booked sales.

Management made that distinction when asked how much of the Rs 347 crore would be executed in the financial year. Susan Electricals declined to state a specific revenue figure, saying that a claim of full execution could be read as an assurance that the full amount was guaranteed revenue. It instead said a considerable portion would be executed in H2, the second half of the financial year.

The Rs 347 crore figure should not be regarded as one pool of final purchase orders because management separately described a Rs 200 crore tender pipeline as of September 30. Susan Electricals said this pipeline included tenders already opened in which it ranked L1, L2, L3 or L4. The call did not provide a reconciliation between the Rs 200 crore pipeline and the Rs 347 crore visibility figure.

How much of the Rs 200 crore tender pipeline could become orders?

Susan Electricals said a significant portion of its Rs 200 crore tender pipeline had already been received in October, and management expected the remaining orders by the end of that month, subject to Diwali-related delays. It said 70%, 80%, 90% and possibly 100% of the pipeline could be issued as letters of intent within the next month.

Those percentages were management’s expectation rather than confirmed order awards. The Rs 200 crore pipeline covered tenders in which Susan Electricals was ranked L1, L2, L3 or L4 and where management expected orders to come to the company. The call did not disclose the value of final orders received in October or the amount represented by each ranking category.

Susan Electricals said it submitted additional bids after September 30 while receiving orders from the earlier pipeline. Management therefore described the pipeline as generally remaining around Rs 200 crore, though it can be higher or lower. The company said it operates across 15 to 16 states, bids in tenders across India and works with engineering, procurement and construction contractors.

Why did Susan Electricals withhold a revenue forecast?

Susan Electricals withheld a financial-year revenue forecast because management said that stating all Rs 347 crore would be executed could be interpreted as a guarantee of revenue. Its stated position was that a considerable portion would be executed in H2, without setting out an amount, a quarterly delivery target or a revenue-recognition timetable.

Management cited historical seasonality, saying H2 had been much better than H1 for the past 10 years. It also said the cable industry generally records better results and revenue in H2. This was management’s description of past operating patterns, not quantified FY27 guidance.

Susan Electricals reported an approximately even business split in H1 FY27, with about 50% from government-sector customers and 50% from private-sector customers. The company did not disclose the government and private-sector composition of the Rs 347 crore visibility, or whether execution and billing schedules differ between the two customer groups.

Can Susan Electricals support near-term execution with existing capacity?

Susan Electricals said capacity for medium-voltage covered conductor, or MVCC, and high-tension, or HT, cables had reached about 11,000 kilometres, compared with 7,500 kilometres previously. Management is targeting 16,000 kilometres by the end of the year and said expansion from 16,000 to 20,000 kilometres can be undertaken at the existing plant.

Management said its existing factories and plant have enough space to pursue its revenue and profit targets through the end of FY28, or March 2028. For FY28-29, Susan Electricals plans a major expansion on land it expects to acquire, where capacity could grow to approximately five times the level of its current expansion.

Susan Electricals said it hoped to acquire the land by the following month, funding it partly from improving earnings and partly through a bank loan. Management said around 25% to 30% of collateral supporting its cash-credit limits is in fixed deposits, which it expects to release when the land is provided as collateral. The call did not disclose land cost, capital expenditure or the commissioning date of the new facility.

How does product mix affect Susan Electricals’ execution plans?

Susan Electricals said low-tension, or LT, cables accounted for only 30% of business in the financial quarter discussed, down from 80% previously. Management said it is focusing future expansion on HT cables, MVCC and winding wires, while continuing to accept LT orders when it considers the orders sufficiently favourable.

In Q2, management said earnings before interest, tax, depreciation and amortisation, or EBITDA, margin was 13.13% for HT and MVCC, 11.82% for winding wires and 11% for LT cables. It also said HT margins generally range from 12% to 14%, winding-wire margins from 10% to 13%, and LT margins from about 9% to 11.5%.

Susan Electricals said its continuous catenary vulcanisation, or CCV, line had arrived at the factory and was at the installation stage, with operations expected within a few days. Management said several states have made dry-curing CCV lines mandatory for HT-cable supply. The company did not disclose the line’s output capacity or its expected contribution to revenue.

Conclusion

Susan Electricals has set out a near-term execution timetable for 90% of its Rs 347 crore order-book-and-pipeline visibility, or Rs 312.3 crore, before March 31. However, the company has drawn a clear line between scheduling, tender conversion, delivery and revenue recognition, and has not issued a financial-year revenue forecast from that visibility.

The next disclosures to watch are whether letters of intent are issued from the Rs 200 crore September 30 tender pipeline, the level of H2 execution and progress toward 16,000 kilometres of HT and MVCC capacity by year-end. Management also said it expects the CCV line to become operational within days and plans to begin construction on the proposed new land before the end of the year.