Expect margins to improve in Q4: KEC International

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Expect margins to improve in Q4: KEC International

In an interview to CNBC-TV18, Ramesh Chandak, CEO and MD, KEC International says, the company should be able to maintain margins closer to 9%. "Hopefully, the margins will improve in last quarter," he adds.

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KEC International 's consolidated net profit for the third quarter rose 40% year-on-year to Rs 81 crore, helped by one time gain from sale of a land in Navi Mumbai.

Its net revenue for the October-December was up 36.3% from a year ago to Rs 1,459 crore, the power transmission equipment maker said on Tuesday.

In an interview to CNBC-TV18, Ramesh Chandak, CEO and MD, KEC International says, the company should be able to maintain margins closer to 9%. "Hopefully, the margins will improve in last quarter," he adds. 

Below is the edited transcript of his interview with CNBC-TV18's Latha Venkatesh. Also watch the accompanying videos.

Q: Can you take us through how your margins performed?

A: The revenue has gone up. We have shown a higher profit after tax (PAT). But PAT also includes a part of our other income- profit on sale of land. Definitely, the profit, if you look like to like profit, is definitely down by another Rs 40 crore

Q: What is the like to like, it is Rs 42 crore, is it?

A: Yes, it will come around Rs 40 crore. That difference is there. Definitely it shows that the growth in sale is very good. Margins were little under pressure, undoubtedly. Our order book is Rs 9,200 crore, a substantial increase over the corresponding quarter last time.

Q: How much has it increased by?

A: Fifteen percent growth in order book. Today, our order book is Rs 9,200 crore

Q: But the margin fall is fairly sharp, it is about 300 bps from 11.6% to 8.7%. Does it stabilise at 8.7% or will there be more pressure?

A: No. In this particular quarter, there were certain events because of which the margins were down. Hopefully, the margins will improve in last quarter.

As I have mentioned always that the margins will be closer to 9%. Margin should improve. If you look at overall basis, our margins are always 9% plus. There is definitely pressure. I am not saying there is no pressure. Overall, we should be able to maintain closer to 9%.