New project to be complete in 32 months: Amritanshu Khaitan

McNally Bharat Engineering on Tuesday bagged an order for a thermal power project worth Rs 970 crore. Amritanshu Khaitan, director of Mcnally Bharat Engineering told CNBC-TV18 that this project will be completed in about 32 months.

The company's management also expects better margins and reduced debt in the second half of this financial year. Also read: Mcnally Bh Engg standalone Jun '13 sales at Rs 446.06 crore Below is the edited transcript of his interview to CNBC-TV18. Q: What kind of margins will you enjoy on your order of Rs 970 crore? How would it add to your top and bottom-line going forward? A: The order is received from Singareni Thermal Power Project. This is a 2X600 megawatt (MW) BOP package which we have been awarded. It takes our order book including L1 status to Rs 6,500 crore. This current order will be executed in about 32 months. We do not disclose margins on a order-to-order basis. But the company enjoys EBITDA margin of around 8 percent on a standalone basis for the year. Q: This order perhaps will be largely in line with the company average with respect to margins? A: We do not declare margins on particular orders, but we have given a guidance of around 8 percent margin for the current year which we should be able to maintain. Q: You also spoke about Rs 6,500 crore is where the order book stands at which includes L1. What is the component of L1 in the order book and going forward are any other deals in the pipeline which you all could convert any time soon? A: The Rs 6,500 crore order book has about another Rs 1000-1200 crore of L1 which should get awarded in the next month or two. We are also bidding for further projects totaling to over Rs 10000 crore. So in the next six months the company should bag another Rs 1000-2000 crore of orders comfortably this year. Q: Q1 was bad for your company in terms of profit and even the sales were not inspiring. What is the sense for this whole year could there be possibility of earnings degrowth? A: If you look at our earnings for Q1, we had a healthy EBITDA growth under the infrastructure environment today which we all are facing. We had a 30 percent EBITDA growth which came through. The bottom-line is getting impacted due to increase in our working capital requirements and payments delays which have taken place for the whole industry, but I am very hopeful that with the new orders which the company is bagging the advances. It should come in should help us bring down our overall debt level in the second half of the year. You should see better results coming through in the second half. I think FY14 will be the year where you should see substantial top line growth which should come in.