Looks like the transition from Belgium to Hungary and the despondency in the power sector, both together pushed the company into the red. Most analysts were expecting “weak” numbers but not really a loss. The company ended Q3FY13 with a consolidated net loss at Rs.189 crore compared to net profit of Rs,42 crore in Q2 and Rs.77 crore in Q3FY12. Sequentially, though topline has risen 2% (was down 2% on YoY), a 6.5% rise in operating costs did it in. Of its three segments, power continued to show the pain, showing a 10% (YoY) drop in revenue and loss at EBIT level. Consumer products did much better but Industrial Systems showed a 5% drop in topline though its EBIT margin improved from 10% to 11%. Yet, power and the cost of transition took its toll.

The company’s poor performance continues and the hopefully, we might see some improvement in Q4 but one should really pin hopes only for Q1FY14. It earns almost 60% of the revenue from its domestic operations and balance from overseas. The company has made out a four-point plan for the future - develop and sell high-value 765-kV and 1,200-kV transformers, better sourcing of raw materials, expand manufacturing facility and consolidate European manufacturing units. But at this point of time, given the poor performance, this plan seems far from reach and one has to wait and hope for the power sector to improve and the benefits of restructuring to start trickling in. For now, the market will not be kind on the stock, that’s for sure.