Unity Infra to sell stake in SPVs; eyes 15% profit growth

Unity Infra Projects is looking to sell 26% stake in two special purpose vehicles (SPVs). In an interview with CNBC-TV18, Madhav Nadkarni, CFO, Unity Infra Projects said the company is looking for stake sales in the Nagpur hotel SPV and its Bangalore residential project.

Nadkarni added that the company is targeting fresh orders of Rs 5000 crore this year and their present order book stands at Rs 4,200 crore. The company is also expecting 20% top-line growth and 15% growth in profits.
According to Nadkarni, interest cost is one of the major factors affecting PAT margins and he is hopeful of interest rates going down, leading to positive performances. Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying video. Q: What's the position? Have you got any interest in terms of finding buyers for stake sale for any of your SPV projects? Which are the projects that you are looking at?
A: We are looking at the Nagpur hotel. We got a project from the Nagpur Municipal Corporation and we are already on the verge of signing a deal with hotel operators on this project. We are looking at an equity partner there and serious talks are on.
Another project where we are looking at is our Bangalore residential project where joint development efforts are being looked at. We are looking at some dilution in that SPV also. Q: Both these are projects that are not yet developed. You are looking at equity stake in order to develop them?
A: Yes. It is at a very initial stage. We will be jointly developing that and we are looking at equity participation in both the projects. Q: You bagged orders worth Rs 150 crore last week, what is the outlook on order inflows and are you expecting it to improve?
A: As on today, after winning the Rs 150 crore orders last week, we have a order book of Rs 4200 crore. During this financial year we are targeting fresh orders worth Rs 5,000 crore. Q: Rs 5,000 crore in this year itself?
A: Yes. Q: So you are doubling your order book this year?
A: No. We are targeting fresh order of Rs 5,000 crore. We already have Rs 1050 crore worth orders in L1 position, which will be converted into order book in a month's time. Q: You are largely into fee based construction not into BOTs?
A: Predominantly ours is an EPC company. We have 2-3 BOT projects but, our exposure towards building segment is 50% and 24% comes from water segment and 26% from transportation. Q: How do you expect the run rate to be in terms of profit growth in the current year? I think last year your profit was up about 10% or so, will that be the run rate?
A: Basically, interest cost was a major factor which was affecting our PAT margin. Hopefully, interest rate would be down and we hope to perform better. In fact we are expecting 20% top-line growth and 15% growth in profits.