Speaking to CNBC-TV18 DK Hota, Chairman of BEML said that it has orders worth Rs 7300 crore order so far. Next year, they are aiming at orders worth Rs 5000 crore.
Giving the breakdown, he said, he sees Rs 1600 crore to come from metro projects, Rs 2200 crore in mining and construction and the balance in defence space.Below is the verbatim transcript of DK Hota’s interview to Latha Venkatesh and Reema Tendulkar.
Latha: You said that Rs 5,000 crore will be your goal, what will take you there, what will be the sectoral break up of that revenue?
A: At the moment, we have orders of about Rs 7,300 crore and next year, our sectoral break up to go to Rs 5,000 crore would be roughly around Rs 1,600 crore in rail and metro, around Rs 2,200 crore would be in the mining and construction space, and balance another Rs 1,200 crore would be the defence space. So, roughly around Rs 5,000 crore is what we are aiming at for next year.
Reema: Could you tell us currently what the revenues are of mining, rail and metro, and defence?
A: This year, at the moment, our numbers have not been great. However, in the last four months, we are expecting to close the year in mining at about Rs 1,800 crore, defence around Rs 800 crore plus and rail this year is going to be extremely depressed on account of the fact that we have the RS10 where there is no topline contribution, that is about Rs 1-1.5 crore per coach as oppose to had it been our own order, it would have been Rs 8 crore a piece. So, rail is going to be depressed at Rs 600 crore. That is what we are hoping to end the year at.
Reema: That is a huge jump that you are expecting. In mining for instance, if you end FY17 at Rs 1,800 crore, you are expecting 22 percent growth in one year to hit Rs 2,200 crore, in defence you are expecting a 50 percent jump to hit Rs 1,200 crore and from rail and metro if this year is Rs 600 crore, in one year you are expecting an additional Rs 1,000 crore to hit Rs 1,600 crore. Could you tell us what these are based on, these expectations of yours for FY17, the assumptions behind it?
A: As far as rail is concerned, even though we are expecting to close this year at Rs 600 crore, next year it is going to be the coaches where the topline will come totally to us. It is not going to be a sub-contract. This year also, we had hoped to close rail at Rs 1,200 crore but there were certain issues that we had with ordering and there were some bogie frame issues, etc. So, it is not really a fold increase that you are saying. This year also we were expecting Rs 1,200 crore in rail and metro. So, next year it is going to be a little more, it will be Rs 1,600 crore.
As far as mining is concerned, this year we are also expecting to close at Rs 1,800 crore. So, Rs 1,800 crore going up to Rs 2,200 crore, we have a lot of orders because this year, coal companies have been a little slow on the orders booking. We are expecting some big orders next year on the high-end dumpers and dozers. So, that is why we are assuming mining should be about Rs 2,200 crore.
As far as defence is concerned, you would have seen what we had done last to last year. Last year we doubled and this year we are expecting again defence to double; not 50 percent but 100 percent. Last year we had done about Rs 370 crore and this year we are expecting Rs 800 crore plus. So, next year defence, Rs 1,200 crore is a sure shot.
Latha: This armored recovery vehicle (ARV) contributes around Rs 1,400 crore in your order book but it is not moving much. Are you expecting more orders in that?
A: Yes.
Latha: You expect the execution to start soon?
A: Next year, ARV, which is roughly about Rs 1,500 crore for 204 vehicles, that is currently seeking some redressal of certain issues with the ministry. We hope to get those sorted out. If that happens, next year we should be doing at least 220 vehicles of that next year. However, we have a lot of other orders on hand like we have the hulls, we have the BD dozers, then we have Akash Missiles; we have roughly about 110 numbers of Akash Missiles that adds up to about Rs 30-40 crore. We are also going to be looking at the QR-SAM. Tatra of course is going to be the mainstay. So, spares for example, earlier years, we used to do about Rs 10-20 crore of spare. This year we should be closing the year with at least Rs 100 crore spare. Next year’s spare should be at least Rs 150 crore plus. So, that is basically what it is.
Latha: That future infant combat vehicle (FICV) is not coming to you, that is the big order that a lot of the private sector is waiting, the FICV orders?
A: FICV is not something that is not going to come to us. Basically they are going to select one private sector player and the other is going to be ordinance factory board (OFB). OFB has a team comprising BEML, Bharat Electronics Limited (BEL), and Bharat Dynamics Limited (BDL). So roughly our share of that will be 25 percent. This is an Rs 60,000 crore but it is going to come in the next maybe five to seven years. However, we are very much there and we are confident that we will have a share of the pie.
Latha: You will get 25 percent of Rs 60,000 crore over the next five years?
A: No. As and when the orders come, OFB is going to be one designated agency definitely and we are part of that. So, 25 percent of that OFB share comes to us. We don’t know in what proportion it is going to be shared between the private players and OFB. These are certain things which are going to pan out and fold out in the future. We will wait and see but that is a big opportunity we are all excited and looking forward to it.
Latha: That is not factored in, in your Rs 5,000 crore; that is way out, maybe after a few years?
A: Yes, that is not factored into Rs 5,000 crore, not at all.
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