See 25% YoY growth; orderbook of Rs 40K cr by Mar‘16: NBCC

Anoop Kumar Mittal, CMD, National Buildings Construction Corporation Ltd (NBCC) speaking about the company’s business outlook going forward said the topline for FY16 is expected to be around Rs 6000 crore and year on year growth around 25 percent.By March 2016, the orderbook would be close to Rs 40,000, said Mittal adding that the company has received orders worth Rs 8000 crore from Delhi government and expect Rs 500-1000 crore from Oman in the near-term.When asked if government had apprised them about diluting stake in the company, he said there were no updates.The focus of the company is redevelopment projects for which the pipeline stands at around Rs 70,000 crore.NBCC is a blue-chip Navratna Government of India Navratna Enterprise under the Ministry of Urban Development, with consolidated revenue of INR 5000 Crore.Below is the verbatim transcript of Anoop Kumar Mittal's interview with Reema Tendulkar & Sonia Shenoy on CNBC-TV18.Sonia: Do you concur with our view that the orders have been slowing down for the company because we have seen less than Rs 200 crore of orders in November?A: It is not true. It is very difficult to maintain order book on a monthly basis. It is other way round. A lot of orders are in pipeline and in next one quarter you will see totally different thing and orders are raining in company.Reema: Can you give us some numbers then? The current order book I understand stands at Rs 30,000 crore. What is the visibility and in the next six months what does the orderbook look like?A: In next four months by end of March, the order book should be close to Rs 40,000 crore. There are number of orders which we had not disclosed, it is almost at final stage. Very soon you will see large amount of orders will come.Reema: Are these by any chance from the Delhi Development Authority (DDA) because the last time we spoke to you, you said that you are anticipating order inflows from the DDA?A: We have already got two orders, one is of Rs 6,000 crore and other is Rs 2,000 crore. So total Rs 8,000 crore and of course we have not included those two projects in our order book. That include once the DPRs are approved and that we are expecting in the month of April. So that order we have already got.Reema: With an expected order book of Rs 40,000 crore, what could be the revenues that you are likely to generate in FY16 as well as in FY17? Give us a sense of a growth rates?A: In this financial year, I am expecting close to Rs 6,000 crore in comparison to last year's 4,750 crore, which will be almost 25 percent growth and in next four-five years similar kind of growth I am anticipating, compounded annual growth rate (CAGR) of 25 percent and it may increase also. Once we close this financial year, I may come up with new numbers.Sonia: You recently tied up with this Al Naba Services to expand your operations in the Middle East, how is the demand shaping up over there and generally what kind of orders are you expecting what kind of margins can you see?A: We have made one joint venture company with a local Oman company that is NBCC Gulf and we are targeting projects in Gulf or particularly Oman and we are participating in few tenders of infrastructure and we are expecting that very soon we may get one-two good orders.Sonia: Which will be the size of?A: Size of maybe Rs 500 crore to Rs 1,000 crore. We are not quoting any tender less than Rs 500 crore in that region.Sonia: The government currently holds 90 percent of stake in NBCC. The mandate was to bring it down to 75 percent. Has there been any progress on that?A: No progress. I have not heard anything from government and in future also I am not expecting very soon declaration on this.Sonia: Can you give us an update on your real estate business? What is the expectation going ahead and by the end of FY16, you had given us a range of about Rs 700-800 crore but in FY17 what kind of upmove can you expect to see in real estate?A: We are not very aggressive in real estate. We are moving very cautiously. In this financial year, I am expecting around Rs 700 crore and next financial year, it may go up to Rs 1,000 crore revenue from real estate business.Apart from this, our main focus is on redevelopment projects. I cannot give you the details. Number of customers are approaching NBCC for their properties for redevelopment project. That is amazing response I am getting from all over the country and particularly in Delhi.Sonia: Can you give us some ballpark numbers of what is the value of these redevelopment projects, how much can it add to your overall business over the next couple of years? What could the growth be?A: The pipeline figure is around Rs 70,000 crore in redevelopment sector and we have moved almost 60-70 percent distance on those projects.We are very near to close down those things and that is a necessity of our customer and clients. Those projects are like redevelopment to colonies in Delhi then redevelopment of All India Institute of Medical Science, Redevelopment of Indian Institute of Public Administration.Sonia: When will all this happen, in the first year or in the next one-two years, what are you expecting?A: Delhi I am expecting it may finish in next one-two months time. So it is very close to finalisation. So I can say very safely that in one year time, some substantial amount of redevelopment projects will be done.