Expect to turn profitable from next year: Shriram EPC

Shriram EPC has won a road contract worth Rs 301 crore in Chhattisgarh and a Rs 137 crore rural water supply order in Jharkhand.In an interview with CNBC-TV18, T Shivaraman, MD and CEO of Shriram EPC said that revenues from these projects will be included in the first quarter of the next fiscal.

The current orderbook stands at Rs 1600 crore and the company expects to turn profitable from next year, he added. Below is the verbatim transcript of T Shivaraman's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18. Sonia: Can you tell us more about the order. Where have you bagged it from, when will it start to come into your revenue stream? A: There are two orders. One is from Jharkhand and other from Chhattisgarh. We got this in the last week or so. There are 24 and 33 months execution period. So effectively revenues will start coming from next year. I do not think we will see much revenue register this year but from Q1 of next year we will start seeing revenues from these orders. We are also seeing a general uptick in the infrastructure order flows in terms of tenders, so we are fairly positive about future or potential order wins. Latha: What do these orders bring in terms of margins to you? A: In the contracting business we are looking at margins above 10 percent at the EBITDA level and that is the kind of level that we hope to see from these orders. Latha: You have got two states, Chhattisgarh and Jharkhand giving you orders. Is it basically coming in from the state governments and can you therefore quantify how much your order book is likely to grow? A: It is not from state government, for example Chhattisgarh order is central government funded project, so it is across both states and centre we are seeing traction, of course some states are not moving. Tamil Nadu is going into election mode, so we will not see significant traction in this state for the next two-three months but definitely states like Chhattisgarh, Jharkhand and others are moving, so we see traction across the country in infrastructure. It is not yet at the pace at which we would like to see it but roads have moved much faster than other areas but we are seeing good trends. Sonia: What is your total order book now? A: Today we have a total order backlog of about Rs 1,600 crore and including this, it will go up to Rs 1,800 crore.