P Dwarakanath, CMD, BEML, says that BEML is facing some problems in the mining sector, where the company has stake of around 50-52 percent. Orders from Coal India have been slow compared to last years orders. We expect some traction to come in next four months, where we are seeing a good provision for equipment.
Below is the edited transcript of his interview to CNBC-TV18.
Q: Your company has bagged a decent order from the government stable. How does order looks from private companies? Are you seeing a pick up in queries or expected order inflow going forward?
A: Yes, we have bagged decent orders. On the railway front, we have received order for around 600 coaches and 72 EMU (Alternating Current Electrical Multiple Unit) and equal numbers of MEMU (Mainline Electrical Multiple Unit) and EMUs.
We have a very comfortable order book and the prospects looks very good. In mining, we are focusing more on exports market as our domestic market is bit sluggish. In domestic market we are seeing order visibility of another Rs 400 crore. Recently, we have concluded a deal in the overseas market where we exported dumpers and excavators worth Rs 71 crore to Saudi Arabia.
Q: What is your visibility on foreign orders, anything more where you are L1 bidder?
A: We are seeing few prospects in the Philippines, Africa, and in the Middle East markets. Both Syria and Saudi Arabia are strong markets.
The prospects are quite strong especially for dumpers and excavators. In addition we have a strong base, where we are looking forward to service spare parts, which will spin good money for us.
Q: But nevertheless, in the first two quarters your sales were lower on year on year terms. In fact, in the last reported quarter your sales were 26 percent lower than what it was in the previous quarter. Will you reach revenue of Rs 800 crore in this quarter or in the next?
A: We are facing some problems in the mining sector, where we have around 50-52 percent stake. Orders from Coal India have been slow compared to last years orders. We expect some traction to come in next four months, where we are seeing a good provision for equipment.
Mining equipment has three segments: equipment, spare parts and service. We have done extremely well in spare parts and service, better than earlier. On the export front, we have crossed last years mark.
Q: What about profitability? EBITDA losses in both the quarters in Q1 and Q2, are you expecting any improvement this year?
A: Yes. Currently we are facing some problems and once the mining numbers come in a big way which we were short in the last four months then I am sure that numbers will improve.
Q: By when do you expect to return to profitability?
Q: Will EBITDA be positive in third or fourth quarter?
A: We hope to get some good orders to come in December from the mining sector. If it clicks on then we will see some big gains because we are standing on L1 for quite a few places in Coal India orders.
Q: How will revenues pan out in this and next quarter? Will it be closer to Rs 500 crore or Rs 700-Rs 800 crore?
A: We are expecting revenues of about Rs 400-500 crore in December. Then we will keep the same momentum. The last three months will be much better than December because we can see good traction to come up in mining sector and railways section is also doing well.
Our sales in railway will be much better this time than last year. We will be crossing around Rs 1500 crore, 200 crore more than last year. In defence, we will be able to retain last year numbers. Once we get orders of main equipment from mining sector and domestic equipment sales pick up we will be back on track.