Manpower problems may reduce margins: Everest Ind

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Manpower problems may reduce margins: Everest Ind

Even though volumes are good, Everest Industires is experiencing sluggish margins due to manpower problems.

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Even though volumes are good, Everest Industires is experiencing sluggish margins due to manpower problems. "We face a big challenge finding trained manpower for executing the projects. Therefore, we are doing some mechanization and automation to increase the pace," said managing director Manish Sanghi exclusively to CNBC-TV18.

The company is depending on its second half order book to help it achieve its target of 40-50% topline growth this fiscal year. Currently, the order book stands at Rs 250 crore.

Below is an edited transcript of his interview with Reema Tendulkar and Ekta Batra. Also watch the accompanying video.

Q: Would you stick to your guidance of around 40-50% topline growth in the steel building business in FY12?

A: We are having a good order book position; I think it's more of a question right now of execution rather than having an order. So far we haven't reached 50%, we are more like 30-40%, but we expect to do better in the second half because we have a much stronger order book.

Q: What is your order book currently?

A: We are having virtually the entire turnover of last year as order book, so we are carrying around Rs 150 crore odd right now.

Q: Could you take us through this execution issue that you are facing? Give us sense of what the challenges are on the ground for you all?

A: The big challenge relates to manpower; availability of trained manpower for executing the project. This results into not having enough throughputs out in the field, so we are doing a lot of training and getting them skilled so as to increase the pace. We are already doing some mechanization and automation in order to do that and we think those things should start showing results in the next few months.

Q: Whatever you did indicate perhaps would result in increase in the operating expenditure for the company. What would you do to your margins going forward?

A: I think the margins in the steel building at least could only improve. Totally when the building products come in, the Q1 showed that our margins had reduced a bit even though the volumes have jumped. I think we are going to see something similar; we should see volumes growing but the margins being slightly sluggish.

Q: In the last quarter, there was profit on sale of land on account of which you got that other income component of about 12 crore. Could you tell us for Everest Industries what is the kind of monetization plan and do you have other non core assets which could be sold off in the future?

A: No, we don't have any such plans right now.

Q: Do you posses any such land which potentially could result in that?

A: Right now we haven't identified any such asset which can be liquidated at least in the short-term.