Sterling & Wilson - India's largest MEP company
In an exclusive interview with moneycontrol.com's Kingshuk Mukherjee, Khurshed Daruvala, Managing Director of Sterling & Wilson describes the exponential growth of the company from a small Mumbai based contractor to becoming a undisputed leader in its sector and anow has sets its eyes on becoming a billion doallar company.
Below is the transcript of the exclusive interview
Q: While bidding for major / crucial projects what are the most important parameters that you consider?
A: Credibility of the clients is one of the most important parameters that we consider while bidding for major projects. Besides this the ability to pay on time is also very crucial. In slowdowns this becomes extremely relevant as we have to keep that in mind while bidding for these crucial projects.
The terms of payment are also important as the third parameter so that we can understand and comply with those conditions. We have stayed away from the residential contracts and not too keen on hotels businesses. We have a good leadership position in the IT, Retail, Commercial and large industrial corporates.
Q: How do you maintain growth targets without compromising your long term targets?
A: We have grown from a Rs. 50 crore company to Rs.2000 crores in a few years time. So this means that we have been able to create a market leadership position for ourselves inspite of established players in the market who have big names.
We catered to the large requirement from the IT sector as we were one of the only contractor with a National presence. With developers planning a National expansion and with the retail, mall and multiplex boom in its infancy, the need for a national contractor would only grow. From one branch office in 1997 Sterling and Wilson established 17 branch offices till date to cater to its clients national needs. We have done some consolidation and are expanding into newer segments as well as geographies.
Q: What would you describe as the key change or catalyst that has transformed the MEP services business today?
A: I would say the timeliness for execution of projects has played the role of the key change or catalyst in the MEP services business. Strict adhering to the deadlines are a must in order to get more business as well as sustain the leadership position.
Q: What big is the market for MEP projects in India?
A: The market is quite big. If you include all the big players including our self then we three or four companies dominate the sector. With the increase in sizes of real estate projects, sizes of MEP contracts are also going up and currently, there are only a handful of players in India that have the ability to service such large contracts.
There are many small and medium sized local players who have an extremely limited presence. We expect the Indian market to be huge there are no precise numbers about the size of the market but large enough to attract the a few large MNC too in the industry.
Q: What strategy / plans do you have to increase the share of EPC Division as well as the solar division?
A: We started the EPC Division in 2008, that provides turnkey solution for cross section of Industrial sectors like aluminum, copper, steel, paper, chemical & petrochemical, material handling projects, E.B.O.P. of power plants, Indian railways feeding substation and substations up to 400 kv providing high end project management services, professional installation & commissioning.
The business unit is operated by a highly experienced team of professionals having long & rich experience in the Industry in various facets of discipline viz. Project management, Design & Engineering, Construction, Field operation as well as in survey, testing & commissioning. As far as the solar division is concerned we have handled 82 megawatts of solar power. We have a very strong engineering team and guarantee the output. The job execution of all solar projects has been extremely quick.
The business vertical provides EPC solutions for building Solar Power Plants based on Photovoltaic (PV) technology (Grid Connected as well as off Grid). It also provides solutions for providing power from other renewable sources like Solar Thermal, Wind and Biomass. As we have a pan India presence , our solar business provides complete EPC solutions for Solar Power Generation including Site evaluation, Design for Solar farms, HV/LV Panels, Inverters, Instrumentation, Power Evacuation, Power distribution as well as Operation & Maintenance. We have a an extremely cost effective and reliable skilled manpower network across the country.
Q: Do you plan to expand into newer geographies abroad?
A: We have already made our presence in the Middle East and African markets. Besides these we are not looking at any other markets globally. Our focus is on countries like Qatar, Saudi Arabia and United Arab Emirates. We want to get more business from these markets.
Q: Going forward, where do you see Sterling & Wilson in the global landscape?
A: As I said we are already present in the markets of Middle East and Africa. Besides we get 25% of revenues from abroad. Our global ambitions are limited to focusing on the Middle East region and we are not looking expand to other countries.
Q: What is your competitive edge while competing with the MNC companies in the industry?
A: I would three things that we have as our competitive edge while competing with the MNC companies.
One: Execution and Flexibility The ability to execute projects before time and within the set deadlines gives us a huge edge over the MNCs. We are very flexible to acodomate whatever requirements are there from the clients side.
Two: Terms and Conditions: We have adhered to all the terms and conditions set by the clients and never broken any agreement.
Three: Client goodwill: Since we have been doing business in the market for so many years we have certain goodwill and name that other MNC find it difficult to match.
Q: Do you have access to the key information (data-points) needed to make crucial decisions?
A: Yes, we have a very strong network of business development teams across the country that gather and analyse all the business intelligence and other information that is relevant to us. So yes, I do have all the key information that I need to take crucial decisions.
Q: How has been your experience in managing growth specially during slowdowns, any particular lessons that you have learnt?
A: I have learnt only one important lesson specially during slowdowns that is Cash flow management. If you have thing that you can control this is it and of course you need to cut costs and tighten the belts during slack periods.