Expect 12% margins on Power Grid order: IL&FS Engineering

IL&FS Engineering and Construction expects margins of around 12 percent on the Power Grid order, says the company's Chief Executive Officer, S Ramachandran.The order entails turnkey works of 765 KV transmission line in Gujarat. IL&FS has a 40 percent share in this project.The company had seen dips in its margins in the previous quarter. Ramachandran says this was due to delays in some of the Bihar orders which were facing land acquisition issues.The company targets 10 percent margins in the current fiscal.Below is the verbatim transcript of S Ramachandran's interview to Sumaira Abidi and Nigel D'Souza on CNBC-TV18. Sumaira: What is your share of the joint venture (JV) which has won this Power Grid order? Also, what are the kind of margins that you could enjoy on this order? A: We are lead partner in this but our share would be at close to about 40 percent. Nigel: What does this take your total order book to, are you expecting more such orders? A: In different sectors yes, in the power sector we are bidding for a lot of rural electrification projects and this year we should be doing better and we will also be bidding for some special projects. In addition, we are also bidding for a number of road projects and railways. Sumaira: On this particular order, what are the kind of margins that you could see? A: Around 12 percent. Sumaira: What about your total margins -- we have seen a bit of a dip this time around, what is the trajectory you expect for the rest of the FY17? A: We have some projects which are taking its own time for example Patna, Gaya -- there are a lot of land acquisition problems were there. So that would have given us a little slip but all said and done, for the year, we are targeting 10 percent, let us see how it goes, it is a function of new orders and we did get a few orders like we signed the contract for Birpur and then we got this Nagpur metro order and we now have this order.