Mcnally to execute projects worth Rs 900-1000 cr in Q4

In an interview to CNBC-TV18, Deepak Khaitan, chairman of Mcnally Bharat shared the details about the company's recent order win of worth Rs 733.34 crore from Associated Cement Companies (ACC).

"It’s a first entry and it’s the first time in India that this job has been bagged by McNally Bharat Engineering (MBE). This opens a new business for us in the future," he added. The company's crurrent order book stands at Rs 4,000 crore. It hopes open with an order book of about Rs 4,500 crore for the next year. Further, the company is planning to execute Rs 900-1000 crore worth of orders in the last quarter. Below is the edited transcript of his interview to CNBC-TV18 Also read: Limit trade orders within 10% of existing share price: NSE Q: If you can detail the order for us, where does it take your order book to? A: This is first entry into eligible contract participant (ECP). It’s a full cement plant contract with Associated Cement Companies (ACC). It’s a first entry and it’s the first time in India that this job has been bagged by McNally Bharat Engineering (MBE). This opens a new business for us in the future. We have been bagging some orders consistently. I do feel that we are in a position to have further orders in the pipeline in the next few months. Our present order book is about Rs 4,000 crore. We hope to close the year and open with an order book of about Rs 4500 crore for the next year. Q: Given this order win, would you revise your guidance upwards? Also the companies board recently approved fund raising up to Rs 120 crore. Can you tell us by when this process could be completed? A: We have the last quarter to fulfill. Our last quarter is a big quarter and we think we will be doing about Rs 900-1000 crore execution then. So, we should be booking another Rs 1000 crore to take us to Rs 4000 crore opening order book next year. It is for basically working capital. Three, four of our major clients have not paid us on time and are delaying payments.  This is especially from the steel industry which is a bad pay master. They are having their own problems. This is a general trend in India at the moment. We have taken this proposal from the board just to have a buffer, so that our operations don’t suffer. We are very hopeful that these collections will come up in the last quarter. Q: Does the industry continue to face challenges by way of working capital? Are companies continuing to face problems by way of delayed customer advances, high working capital cycle? A: The customers are not being able to pay on time. There are delays and therefore it leads to delay in the project also. We are not able to finance the delay because margins are very tight due to stiff competition. Therefore there is a problem which I hope will get corrected in the last quarter. Q: Has the capex cycle started seeing even a wee bit of revival or uptick in terms of order flows? If yes from which sectors at all are you getting orders? A: There are a lot of tenders which we have submitted. However, they are getting delayed. The execution is getting delayed. I do not see things improving drastically in the next six months. However, we as a company are well on target. This is our single largest order received by McNally Bharat because of our various verticals I am confident that we will start next year with a healthy order book. The economy should pick-up next year which will bring us back on track to a consistent growth.