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Last Updated : Jun 21, 2016 01:48 PM IST | Source: CNBC-TV18

Navi Mumbai Airport may kick off ops by 2019 end: CIDCO

The airport development team will start the work on Navi Mumbai Airport by December 2016 and make it operational by end of 2019, says Cidco Chief Engineer Sanjay Choudhary.

City and Industrial Development Corporation of Maharashtra (CIDCO) has awarded bids for four packages worth 1640 hectares, said the company's Chief Engineer Sanjay Choudhary. It has awarded Rs 600 crore worth of orders to Gayatri Projects and package worth Rs 700 crore to GVK Consortium, he told CNBC-TV18.

Meanwhile, Cidco has awarded packages worth Rs 1980 crore for the Navi Mumbai Airport, he said. Choudhary expects the airport development team to start working on the project by December 2016 and make it operational by end of 2019. 

Below is the verbatim transcript of Sanjay Chaudhari’s interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.

Sonia: If you can just start off by telling us what is the update on the amount of the quantum of orders that you have given out. So, far to whom all you have given out these orders?

A: We have actually four packages for starting of this core area development which is having around 1640 hectares of areas. Basically we have to cut the Ulwe hill from 92 meters height to bring it to the 5.5 meters and that is actually scope of work. We have awarded four packages two has won by Supreme Infrastructure but we have awarded him only one and one we have kept on hold considering his present status of progress on various projects; if he performs here and he get another one also.

Sonia: You said that you have awarded one project to Supreme Infrastructure that is worth Rs 400 crore?

A: That is Rs 200 crore.

Sonia: The other project that you have not year awarded what is the quantum of that?

A: That is also Rs 200 crore; Rs 1 crore here or there maybe.

Latha: What about the Gayatri Infrastructure Project?

A: Gayatri Infrastructure is Rs 600 crore.

Sonia: You said 14 percent earnings growth in FY17 and 21 percent in FY18. What are the pockets that could lead to that growth?

A: A lot of that growth will come from the interest rate sensitive. If you look at the Sensex, the one which has the largest weightage, so you have HDFC Bank which continues to go at 19-20 percent odd, Infosys will go up from 9 percent to 16 percent. So, it\\'s a usual suspect, it\\'s no big secret. It is in order of the weightage. Therefore, what makes a difference is Tata Steel, State Bank of India (SBI) etc which are the swings. Oil and Natural Gas (ONGC), Reliance Industries in FY18, these are the swings.

The way to look at the index is, roughly about 1/3rd is domestic, roughly 1/3rd is what is affected by the global scenes and 1/3rd is others. Others mean ITC and stuff like that.

Latha: Would you say that now we have to be little more discerning about the midcap stocks, with the rains arriving, is it throwing a lot of opportunities, the midcap space?

A: Yes, but one has to be careful because at any time, midcaps you always have to be careful about because the basket of midcaps does well or better than the basket of largecaps only under two conditions. One, when there is a gross domestic product (GDP) surprise and second, if there has been a huge underperformance in one versus the other, that\\'s one thing, let\\'s keep aside in terms of theory. In practice you cannot buy a basket of midcaps because they inherently smaller companies, you have to be very choosy about them, so that is theory.

However, let\\'s get into practice about what you talked about monsoons. The first impact of monsoon is PE, not EPS, so that is first. Second, just because of monsoon, do not expect the agricultural sector in terms of farm income; immediately farmers to start buying lots of Maruti cars and two-wheeler and so forth. That is not going to happen for the next few months. You have a broken balance sheet of the last two years; you had three crop failures, so you are going to do that with a lag of about nine months. However, what is more important now because of monsoon is, one, all the interest rates plays. Therefore, what happens is the interest rate cut by this or the next Governor - that becomes a possibility because inflation is going up and that was a fear that maybe there will be no interest rate cuts this year.

The second is farm inputs. So, whatever is required, pesticides, fertilisers, tractors, pipes and stuffs like that, all that sort of stuff is on the midcap space, good for monsoons.

Sonia: Some of the new spaces that everyone seems to be interested in, logistics, defence, railways, solar, renewable energy, out of that whole pocket what looks like it would give most value now?

A: We just released a strategy report which talks about seven themes. I am not going to tell you in alphabetical order. In order of importance the first one is banking. The one which will change the landscape of India is banking. The biggest beneficiary of this will be the small finance banks and the largest private sector banks and the losers will be the midcap public sector undertaking (PSU) banks. Second, is all forms in terms of power emission whether it is power equipment or auto. So the emission norms are going to affect in both of them. The third in effect will be auto, agriculture and power equipment etc. goods and services tax (GST), I have put it, but Rajya Sabha seats are an issue. I know a lot of people are expecting GST. What deals will be done. I do not know but logistics is a play on double stacking of the dedicated freight corridor, not just on GST. So logistics is a play by itself in any case.

Latha: What is the quantum, how expensive?

A: That is Rs 100 crore.

Sonia: Are you looking at awarding projects to any of these companies a likes of Reliance Industrial Infrastructure (RIIL) or may be somebody like Jai Corp because these are some stocks that are rallying?

A: There are speculations in the market, in the news papers what you are reading through. However, so far they have not been blacklisted. If they are blacklisted then definitely CIDCO will take a call on this.

Latha: What is the next step after the levelling of the Ulwe hills and the divergent of the Ulwe river when is the next set of projects?

A: We are expecting our main airport development team to step in somewhere between December to March next year. Once they take in they will simultaneously start doing their development as well. As of now we are still targeting December 2019 for the take off, hopefully things should go well.

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First Published on Jun 21, 2016 11:00 am
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