We are confident that we will see some uptick in the order inflow in FY12, says YD Murthy, Exec VP-Finance, NCC.
"In the current year, we are targeting fresh order flows of nearly Rs 9,000 crore as compared to about Rs 6,800 crore in the last year and order intake has improved," he added. The company is targeting a topline growth of about 15% this year and is confident of achieveing the targeted turnover without much difficulty. Also Read: When should you buy NCC? Below is the verbatim transcript of YD Murthy's interview with Udayan Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: How is business right now because you have gone through a difficult FY11, any signs that the business is beginning to pick up? A: We had a difficult year in FY11. We had a topline growth of only 6% as compared to that earlier in 2009 and 2010 we had better growth 15% and above. Things are expected to pick up in the current year. We are confident that there will be some uptick in the order inflow and also the execution problems that we had in 2011, particularly because of the extended monsoon in the second and third quarters and also some land acquisition issues we were not able to achieve the topline growth that we anticipated.So, we had a topline growth of only 6%. But, this year we are targeting a topline growth of about 15%. We have been given a guidance for about Rs 7,200 crore of topline on a consolidated basis and about Rs 5,900 crore on a standalone basis with an order book of more than Rs 16,180 crore at the beginning of the year. We are confident that we will be able to achieve the targeted turnover without much difficulty. Q: How is new order intake panning out? Can you give us the experience of the first quarter? What has happened in terms of fresh order booking? A: In the current year, actually we are targeting fresh order flows of nearly Rs 9,000 crore as compared to about Rs 6,800 crore in the last year and order intake has improved. This does not include the power order nearly Rs 5,000 crore that our subsidiaries are likely to give to the parent company. If you factor that also into account the total intake in the current year will be of the order of about Rs 14,000 crore. So out of the Rs 9,000 crore of the fresh orders that we are targeting from outside clients in the first two months we bagged about Rs 1,000 crore of orders. Some more orders have been received in the month of June. The full numbers are not there with me. But, we are confident that we will be able to bag the orders as we go forward. Q: The other problem is the high interest levels and your balance sheet does carry quite a significant amount of debt. What is your plan of working around that because interest costs did mount last year? A: Absolutely. You are hitting the nail on the head. Actually our biggest problem is not order inflows or execution it is actually the working capital. The working capital cycle has deteriorated last year and because of that we had to borrow more money in the market. So it was a double whammy for us. The quantum of debt has gone up substantially during last year and also the rate of interest that which we are able to borrow have gone up substantially. In fact, in the first quarter of last year we were borrowing at 11.5 to 8% whereas the fourth quarter of last year we were borrowing at around 11 to 11.5%. The interest rates have gone up. It is having a negative impact on our profit margins. Q: So whatDiscover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
