AP Verma, director finance, Kalindee Rail Nirman says, in an interview to CNBC-TV18, that he expects the LoI on railways order soon and adds that the company may raise funds via the PE route
The earning this year will definitely be better than last year and the top-line will be substantially higher
Director - Finance
Kalindee Rail Nirman expects the letter of intent (LoI) for the Rs 246-crore order from the Rail Vikas Nigam under the ministry of railways in the next few weeks, says AP Verma, director-finance.
In an interview to CNBC-TV18, Verma adds that the company is also planning to raise funds via the private equity route and is in talks with a few firms to raise around Rs 20 crore.
Below is the edited transcript of the interview on CNBC-TV18
Q: Could you tell us about these new orders? By what time will they be executed? What impact will these orders have on the top-line?
A: Currently, our order book is at very comfortable levels. With the Rs 246-crore order that we bagged from the Rail Vikas Nigam Limited under the ministry of Railways recently, our order-book will touch over Rs 1,500 crore.
The top-line this year is certainly better than last year and the earnings will be out within a week on May 30 when the board meeting has been scheduled. Though I expect the bottom-line to be certainly better than last year, but at the moment I am not in a position to reveal the exact figure.
Q: What kind of improvement in the bottomline do you expect, because in Q3 net sales was down 60 percent and profits fell by about 65 percent.?
A: The earning this year will definitely be better than last year and the top-line will be substantially higher. But the improvement will not be very much on expected lines and the large orders that we bagged were in the last quarter and second half of last year will be reflected in this current year. There will be a substantial increase and in both the top-line and bottom-line.
Q3: How soon do you expect that Rs 250-crore Rail Vikas Nigam order to be finalised?
A: We are expecting a letter of intent that will confirm acceptance within the next 10 days. The project will be completed in about three years. Some of the other projects that we got last year, spread over different timelines like the Kolkata Metro, are all in better shape now.
Q: Did you recently approve of an issue of warrants to non-promoters that wasn’t successful?
A: That was two years ago.
Q: What about the overall cash situation and any plans for raising funds?
A: Yes, we do have plans for fund-raising. We are thinking of the private equity route and that we are going to look into some of the offers. But we have not yet arrived at a concrete decision as of today.
Q: Have you all initiated discussions with any private equity investors?
A: Yes, talks with a few investors are on.
Q: What would be the quantum of stake that you are planning to sell and how much are you planning to raise?
A: In our case, the level of the promoter’s holding is not very good, so we have to be cautious. But then definitely, though we can give them a considerable percentage of stake, but how much exactly, I can’t tell you as of now.
Q: Would it be in single digits?
A: It maybe around 20 percent.
Q: How soon will you announce the details?
A: I can't tell you, but the talks are on.
Kalindee Rail stock price
On January 30, 2015, Kalindee Rail Nirman (Engineers) closed at Rs 143.50, down Rs 2.6, or 1.78 percent. The 52-week high of the share was Rs 150.80 and the 52-week low was Rs 51.00.
The company's trailing 12-month (TTM) EPS was at Rs 5.08 per share as per the quarter ended September 2014. The stock's price-to-earnings (P/E) ratio was 28.25. The latest book value of the company is Rs 104.34 per share. At current value, the price-to-book value of the company is 1.38.
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