Eye 25% FY16 growth; focus on international biz: Power Mech

Power Mech Projects shares saw disappointing listing on the exchange today at a discounted rate of Rs 600 against the issue price of Rs 640. The issue comprised of fresh shares and offer for sale.S Kishore Babu, Chairman and Managing Director of the company told CNBC-TV 18 that the new capital will be utilised partly for repayment of long term loans and partly as the working capital.The company’s debt increased in last year due to extension in receivable from 30 days to 65 days, he says adding that in FY16, debt will come down. Babu expects the company to grow at 25 percent to Rs 1,600 crore in FY16. He says new orders, especially from NTPC, state run companies and international business, will add another Rs 1,000 crore by March-end. The current order book stands at Rs 4,000 crore. In next two years, international business will double from its current 10 percent to 20 percent, he adds. Below is the transcript of S Kishore Babu’s interview with Latha Venkatesh and Sonia Shenoy on CNBC-TV18. Latha: Now that the listing is over you are free to tell us how the year looks, will you be able to repeat the kind of growth performance you did last year? Last year was fairly good, from Rs 1,200 crore to Rs 1,350 crore that you did. This kind of a pace of growth is possible this year?  A: This year also we are planning to grow at the rate of 25 percent and we will be around Rs 1,600 crore.  Sonia: What about your order book, how much do you expect your order book to grow, what does it stand at currently?  A: Right now we have an order book of around Rs 4,000 crore and we are expecting another Rs 1,500 crore orders by end of this March.  Latha: Where are these orders coming from because the power companies are looking pretty weak? A: The independent power producer (IPP) sector is going in a slow mode, but we have other sectors with NTPC and state owned companies we are getting many orders. Mainly with NTPC and some state companies like Andhra Pradesh Power Generation Corporation (APGENCO) and Telangana, the new state formed recently, where many new orders are coming. Also, we are trying some good orders from international i.e. Middle East mainly, Saudi Arabia and other countries like South Africa and so on.Sonia: Currently, your international operations are less than 10 percent of your revenues. In the next couple of years, how much do you think the international operations could be as a percentage of total revenues and what kind of margins do you enjoy from that segment?A: In coming two years, it will slowly grow to the level of 20 percent and the margins will be to the tune of between 15 percent and 20 percent at EBITDA level in the international market. Latha: When you say 25 percent growth - is it in revenues or is it in profit that you are expecting as Rs 1,600 crore works out to less than 20 percent?A: No, what I mean to say is right that now our international contribution is only 10 percent, which will be going to 20 percent. Latha: What will your overall revenue and profit growth look like in FY16-FY17? A: Profits we will be maintained in the same level for next two years. Latha: You will do only Rs 72 crore of profit? A: No, proportionally it will grow to match the revenue. Proportionally whatever the revenues will be there, the same percentage will be maintained for next couple of years.