AK Lakhotia, chairman & chief executive officer, MBL Infrastructures says the company's current order book stands at Rs 3600 crore.
A consortium led by MBL Infra has bagged projects worth Rs 279 crore. In an interview to CNBC-TV18, AK Lakhotia, chairman & chief executive officer, MBL Infrastructures shares his views on the order win and the company’s future prospects.
Below is the transcript of AK Lakhotia's interview with Latha Venkatesh & Ekta Batra on CNBC-TV18.
Latha: Can you tell us when this order will get over and what do you make – 12-13 percent on this?
A: It’s a 46 km stretch of National Highway 31 to be completed by us on engineering, procurement and construction (EPC) basis in 24 months time.
Latha: Your margins would be how much?
A: Our normal margins would be 11-13 percent EBITDA.
Ekta: Can you apprise us of what the current order book would then be for the company?
A: Today we have 30 projects, where work is going on. They are worth about Rs 3,600 crore.
Latha: What is your debt?
A: We have long-term debt of about Rs 100 crore and working capital of Rs 575 crore.
Ekta: You had some fund raising plans which were on the anvil or something that you all had decided on?
A: We have done qualified institutional placement (QIP) and have raised about Rs 117 crore recently.
Ekta: Will that be used to pare down your debt or has it already been pared down and now currently stands at Rs 100 crore?
A: Our debt is at very low gearing ratio and we propose to use those funds for our expansion. We have a huge opportunity available in our core competence area and the orders have started flowing in.
Latha: What is the debt equity in that case?
A: Our debt equity - long-term is below 0.25 and including the short-term it is 1:1.
Latha: Are you L1 in any of the orders. What is the likely growth in order book in the next two quarters?
A: In the next two quarters we should be seeing an order inflow of about Rs 300 crore. So that should be a significant increase in our order book in the next two quarters.
Ekta: What kind of projects are you bidding for when you see this order inflow of Rs 3000 crore which is anticipated? Can you tell us public-private, which projects?
A: We go for selected projects like National Highways Authority of India (NHAI), Ministry of Road Transport & Highways (MoRTH), metro projects or ADB & World Bank funded projects of states. So, several projects are under pipeline. Normally we do not announce L1 bids. Whenever we receive firm orders, we make the announcement.
Latha: Your income has been rising at 15 percent rate, since you say you are going to see a quantum jump in your order book, will the revenue increase step up in FY16; does it go to 20-25 percent?
A: In the next year it should be up by 25-30 percent and profit should be consolidated. Order inflow yes, we are bullish. We expect lot of orders but we will follow the same policy of being very quality concerned on order book.