Tecpro Systems targets 35-40% top-line growth in FY12

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Tecpro Systems targets 35-40% top-line growth in FY12

In an exclusive interview with CNBC-TV18, Ajay Kumar Bishnoi, chairman and managing director of Tecpro Systems says the Engineering Procurement and Construction (EPC) company is eyeing ‘at a growth of about 35% to 40% on the top-line in March 2012.

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In an exclusive interview with CNBC-TV18, Ajay Kumar Bishnoi, chairman and managing director of  Tecpro Systems says the Engineering Procurement and Construction (EPC) company is eyeing 'at a growth of about 35% to 40% on the top-line in March 2012. With a impressive order book addition of contracts worth about Rs 3,000 crore, the company is confident of reporting profit after tax of about 6.5% to 6.7%.

Denying the impact of pressure on margins due to rise in commodity prices, Bishnoi says the company has back to back contracts for the key raw materials and therefore 'doesn't foresee' it affecting the company. "With regard to margins we would be looking at a top-line growth of about 35% to 40%," he adds.

Below is a transcript of Ajay Kumar Bishnoi's interview with CNBC-TV18. Also watch the accompanying video.

Q: What is the kind of order book that you are sitting on and what is the kind of opportunity you see going forward in FY12 in this segment?

A: As far as balance of plant is concerned, we are currently executing three contracts - one for Chhattisgarh State Generation Corporation and two for Andhra Pradesh. In terms of values, I would imagine the three contracts would be worth about Rs 3,000 crore.
As we go ahead we have enquiries in hand. We have some enquires from private sector and are expecting some enquiries from the government sector.

Q: Can you give us the division of contribution from ash handling, coal handling and balance of plant orders?

A: We started the books as of April 1 with about Rs 4,400 crore, broadly out of that we would have about Rs 1,600-1,700 crore of balance of plant for Andhra. We would have another about Rs 400-500 crore of coal so that would total up to Rs 2,200 crore and from the balance Rs 2,000 crore, we would roughly have about Rs 500 crore in ash and the balance in coal.

Q: What can you give us in terms of the growth of the order book forecast?

A: If you compare our numbers as of April 1, 2010, we started the financial year with about Rs 2,000 crore as compared to that we are now starting with about Rs 4,400 crore. Currently, we have some jobs where we are L1 in the government sector but since we don't have the orders in hand, it would be premature to talk about them. However, there are tenders and we have submitted our bid and we are lowest in a couple of them.

Q: You reported an EPS of Rs 27 in 2011 in 2012, what is the kind of number you can expect as far as EPS is concerned?

A: We are looking at a growth of about 35% to 40% on the top-line in March 2012 and as things stand, we would be also reporting profit after tax of about 6.5% to 6.7%. The growth in EPS would be quite similar to what it has been in the last year.

Q: Will you be able to maintain this 20% that you reported in the fourth quarter?

A: With regard to margins we would be looking at a top-line growth of about 35% to 40%.

With regards to interest cost, there is a certain increase in these interest cost. However, overall the increase could be marginal and it will be off-set from the saving, which we would have by the growth of the top-line vis-à-vis the indirect overhead.

With regard to the commodity prices in our business, the key raw material is steel and for our major bought out and packages we have back to back contracts with some of the leading companies in the country, therefore, I don't foresee that affecting us. I would imagine that in March 2012, we should be reporting almost similar numbers in terms of profit after tax as what we did in March 2011.