Apr 15, 2013, 08.42 AM | Source: Moneycontrol.com

Will monetise assets to reduce debt: NCC's Murthy

The Hyderabad-based firm with diversified interest in power, building and electrical divisions is hopeful of exiting FY13 with profit as ordering scenario has improved of late. The firm is yet to announce Q4 and FY13 numbers.

YD Murthy , EVP-finance, NCC
Moneycontrol Bureau

In a bid to pare debt of around Rs 5000 crore, Hyderabad-based NCC is keen to monetise assets in power and roads verticals. The firm’s annual interest outgo is around Rs 400 crore

Recently, the company with diversified interest in power, building and electrical divisions, sold entire stake in Himachal Sorang Power project which is developing a 100 megawatt merchant power project in Kinnur district.

Generally, companies offload stake in projects that are up and running but in the case of Himachal Sorang, NCC has sold it even when it is incomplete. "It is a strategic move wherein we will re-invest proceeds in ongoing and new projects. It will also help reduce debt," said YD Murthy, executive vice-president, finance at NCC to moneycontrol.com in an exclusive interview.

The company is also planning to sell off its road projects. Of the five road projects it has, two are up for grabs. "We are in talks with investors," said Murthy. Did you read: SC ruling positive; govt must share private burden: NCC

Meanwhile, NCC shares have declined over 45 percent in the last one year, troubled by general slowdown in order flow, payment delays and higher interest outgo quarter-on-quarter.

However, the company is back in green by posting Rs 10.82 crore in Q3 as against Rs 9.48 crore loss year-on-year (YoY), despite higher interest outgo continuing to impact margins. 

The company is hopeful of exiting FY13 with profit as ordering scenario has improved of late. The firm is yet to announce Q4 and FY13 numbers.

The company has an approximate order book of 19,500 crore as on March 31, 2013, marginally down YoY.  While the company did not give any guidance on order book growth last year, one in unsure whether the company will predict order book growth for FY14.

Like industry peers, NCC will also push hard to improve its orderbook size in FY14. Simultaneously, it has fine tuned business strategy to ease liquidity condition.

The company has also embarked on growth plan in international geographies. It is already handling roads and highways projects in Oman and UAE valued at over USD 200 million. We are looking at expanding in these regions, he added.

In capital intensive infra projects, companies are finding it extremely difficult to grapple with delayed payments from customers.

However, Murthy affirms that NCC’s  debtor days have improved from 120 days to 88 days which will improve cash flows.

Going ahead, the company is hopeful of doing good business on the back of decent amount of government projects likely to be launched soon. Last fiscal was a tough one, but we will definitely bounce back in current year, he said.




NCC stock price

On December 01, 2015, NCC closed at Rs 77.30, down Rs 0.4, or 0.51 percent. The 52-week high of the share was Rs 118.20 and the 52-week low was Rs 53.45.

The company's trailing 12-month (TTM) EPS was at Rs 3.40 per share as per the quarter ended September 2015. The stock's price-to-earnings (P/E) ratio was 22.74. The latest book value of the company is Rs 57.64 per share. At current value, the price-to-book value of the company is 1.34.

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