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Era Infra expects pick up in stagnant order book this year

TD Arora of Era Infra Engineering said that the company's stagnant order book was expected to pick up on the back of the company bagging the Kochi metro rail contract. He added that the margins were expected on the lines of their traditional numbers.

June 18, 2013 / 05:48 PM IST
 
 
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After bagging a construction order from the Delhi Metro Rail Corporation (DMRC), TD Arora of Era Infra Engineering told CNBC-TV18 that the company's stagnant order book will pick up in this year. He expected additional orders to cross Rs 500-Rs 1,000 crore at the end of 2013.


Speaking on the margin from the project, he saw it to be in-line with its traditional 6.5 percent margin.


Also read: Govt announces another mega industrial corridor


Below is the edited transcript of his interview to CNBC-TV18.


Q: We understand that you have secured an order from the Delhi Metro Rail Corporation (DMRC) for construction of some elevated viaducts.


A: This is a Kochi Metro Rail package but the consultants are the DMRC. We have received the KC-5 metro line package. This is in a joint venture (JV) with Ranken , a Chinese (railway construction) company.


The construction is of elevated viaduct which includes five elevated stations. Some of the stations are there in that Alwaye-Petta Line.


Q: The whole order is Rs 383 crore. But, what do you make in terms of net?


A: While bidding you definitely keep certain margins (aside). While doing the job, certain things are there (kept in mind).


Q: Your traditional margin has been about 6.5 percent. Is that what we should expect in this one?


A: Yes. Such margins are definitely targeted and we will move in that direction. In our past contracts, we have kept our bottom-line intact.


Q: For your company size, this is still relatively smaller order. The concern has been on your stagnant order book. In FY14, will it go past Rs 10,000 crore mark significantly?


A: As far as our order book is concerned we are already having almost around Rs 10,000 crore of work in hand.


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Q: But that has been stagnant at Rs 10,000 crore for a year.


A: We have completed some of the projects and received some new jobs in this course. Some more projects are also there in pipeline. This project (Kochi metro rail) is a new area for us.


Since we have already been working with DMRC at various projects, it will strengthen our base in this segment. Our in-hand works are going to increase which is stagnated.


We have picked up. In last two months, we got another project from National Thermal Power Corporation (NTPC).


Q: The fact that you have worked for two years; Rs 10,000 crore will last you for how long?


A: We have been able to do Rs 4,500-Rs 4,600 crore of work annually. Some of the projects have been completed.


Q: Are you L1 in anything? What do you expect in terms of additional incremental orders till the end of 2013; another Rs 500-1,000 crore?

A: Yes, It will be definitely more than that as we are in various stages of bidding.

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