WS Inds sees about Rs 160 cr topline by year end

Excerpts from Closing Bell on CNBC-TV18 Watch the full show » ALSO READ See latest News about WS Industries See previous management interviews See what other Experts & Brokerages are saying about WS Industries WS Industries BSE | NSE 30/05/12 Are Mutual Funds betting on WS Industries?

Sharekhan has put a buy on WS Industries with a target of Rs 87.

Murli Venkatraman, Vice Chairman and Managing Director of WS Industries says the company's core business is doing extremely well. He discusses the same along with the company's plans and targets going forward.

Excerpts from CNBC-TV18's exclusive interview with Murli Venkatraman:

Q: The one which has got the market excited is the realty subsidiary. Could you lay out what lies in that subsidiary and what could be the valuations there?

A: Briefly, we have 14 acre development coming up in a good locality for ITIes office space. This land is actually developed jointly with the Purnendu Chatterjee Group.

Essentially, we will be constructing about 1.5 million square feet of prime parade space. Out of this, about 250,000 square feet is already under construction and should be placed on the market sometime middle of this year. The remaining portion will be progressively completed in phases.

So this is actually a space, which should come on to the market some time in the middle of this year.

Q: What is the reasonable market value for the amount of square feet that you are developing? What is your holding in this joint venture?

A: Essentially, we retain 60% of the company and this is a joint development with the Chatterjee Group. We do have an investor as well, the Schroder Renaissance Capital, which is holding the balance 40%. The rental values here are hovering at around Rs 40-45 per square foot at this point in time.

Q: By when do you expect potential revenues from this stream to come in for your company and how much might that be?

A: Essentially, this would start flowing in towards the second half of the next financial year, that is '07-08. That is the first phase coming on stream and this gives us roughly about 20% of 250,000 square feet and this will consequently, be followed by a subsequent module.

So ultimately, we are really looking at roughly about 300,000 square feet holding, of which will yield rental incomes for us, and go back to the parent company.

Q: What about the core business? How is that shaping up? Where is your order book at this point?

A: The core business is doing extremely well. As you are aware, the power sector is going through a substantial boom time now. There is a significant investment plan by the government in all parts of this sector including transmission distribution.

Our order book is extremely healthy at the moment. This is equitably distributed between both orders from the domestic sector with Power Grid Corporation being one of the key customers as well as leading domestic multinational companies like ABB and Aviva, Siemens. This is also supplemented by the international markets as well.

So worldwide, there is a good performance play happening in the power sector and I think all companies in this area should benefit from it.

Q: What did you think you would end this year with in terms of earnings per share?

A: We are pretty much on target. I think we are talking about a topline of roughly Rs 160 crore. And our PBT should be in the region of about Rs 8.5-9 crore, which is in line with our expectations and our projections that we have set out for ourselves.