Om Metals eyes Rs300cr revenue in FY11 from engineering biz

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Om Metals eyes Rs300cr revenue in FY11 from engineering biz

In an interview with CNBC-TV18, Vikas Kothari, Director, Business Development, Om Metals Infraprojects, spoke about the latest happenings in his company and sector.

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Excerpts from Midcap Radar on CNBC-TV18 Watch the full show » RELATED NEWS Om Metals looking at Rs 50-150cr acquisition ALSO READ See latest News about OM Metals Infra See previous management interviews See what other Experts & Brokerages are saying about OM Metals Infra OM Metals Infra BSE | NSE 29/05/12 Are Mutual Funds betting on OM Metals Infra?

Q: What would it amount to in rupee if you have made a valuation?

A: In financial terms, we are expecting to gain about Rs 250-300 crore from all of our real estate projects over the next three financial years. This is addition straight to our bottomline because we will be doing co-development wherein all the expenses are going to be met by the real estate developers. So in the books of our company, we will be having an addition of about Rs 300 crore in our bottomline.

Q: You have many of these projects that are coming on stream. I wanted to understand how is the margin picture shaping up because last quarter you saw big dip in margins, it came in at about 22% versus 51% last time, so from all these developments that you have what is the margin looking like?

A: Fortunately, for us our land bank has been acquired at a very phenomenal low valuation. With the co-development model that we have created for Hyderabad and Bandra, the expenses are going to be met by the developers. So the margins are phenomenal for e.g. what I have told you we are expecting Rs 300 crore to be added straight to our bottomline over the next three financial year, so that's as far as our real estate projects are concerned.

In the engineering, we enjoy 20% net profit margin. There we are expecting to do about Rs 200 crore in revenues in FY10 and about Rs 300 crore revenues in FY11. So there we enjoy about 18-20% profit after tax (PAT) margins.

Q: What is the debt on the books?

A: We have around Rs 25 crore as debt. So we are practically a debt free company.