In an interview to CNBC-TV18, Parag Shah, MD, Man Infraconstruction spoke about the financial performance of the company in the quarter gone by and the road ahead.
The realty player has entered into a 50-50 joint venture with Wadhwa Group with the total investment of over Rs 300 crore. The project will be sold in an enterprise value and each flat will vary from Rs 1.4 crore to Rs 2.6 crore, he says.
Going ahead, Shah aims at launching four to five projects by next quarter end.
Furthermore, the company has entered into various engineering, procurement and construction (EPC) projects, where they have upside on real estate side with construction area of approximately 24 lakh square feet.
Below is the verbatim transcript of the interview:
Q: How this quarter is panning out in terms of business for you as compared to the quarter gone by?
A: Last quarter result was very good. This quarter result is also at par. As far as the result is concerned, result is good. The price impact could be there.
Q: I believe the company is coming out with a new project that is called Atmosphere in Mulund West in a joint venture with Wadhwa Group. Can you give us some details, is this a 50-50 joint venture (JV) with Wadhwa Group, what is the size of the project, when will the revenues come on stream?
A: It is around 1.8 million square feet. It is not a joint venture; it is a partnership with Wadhwa. It is a special purpose vehicle company. The project will go on around somewhere three to three and half years. There are three partners; Wadhwa is there, Man and Chandak.
Q: How will the revenues be split amongst the various partners? How much will Man Infraconstruction get?
A: Man Infra holding will be around 20 percent.
Q: Can you just tell us what the entire project comprises of, what the total investment is?
A: Total investment of the company was somewhere around Rs 300 crore plus.
Q: Of all three companies together?
A: Yes, of all three companies together.
Q: When would the project come up by?
A: The project should start within next one-and-half to two months time. That is not the only project, we have entered into the real estate sector and we have purchased few properties. We believe that by next quarter end we should be able to launch four to five projects.
Q: Can you just give us a sense in terms of where these projects are, who your partners are?
A: We are doing most of the projects alone only; Man Infra has 100 percent holding.
Q: About this project – you told us its 1.8 million square feet. What is the approximate selling price that you are aiming to achieve? So we get a sense what the total project size is?
A: We are not selling the project on the terms of square feet basis. It’s an enterprise value and each flat varies from Rs 1.4 crore to Rs 2.6 crore.
Q: What would the total size be?
A: Total size should be around Rs 4,000 crore.
Q: Of that your share would be 20 percent?
A: Yes. We have entered into projects where we get engineering, procurement and construction (EPC) business also and where we have upside on real estate side also. So here the EPC business will come to Man, which is around 24 lakh square feet construction area will be.
Q: What about your financials. You did give us a brief in terms of what we can expect in the coming quarters in terms of how your business is doing but give us numbers. You did Rs 66 crore in the previous quarter where your total income was weak, it was down 25 percent. What do you think you can average in this quarter and maybe even in Q4?
A: Last year the first half profit was around Rs 18 crore whereas this year the first half net profit after tax (PAT) is around Rs 40 crore.
Q: I am talking about quarterly run rate?
A: We cannot give future projections but the first half we were at Rs 40 crore that was almost two times than the last year’s first half.
Q: How much do you have in terms of debt on books?
A: It’s still a debt free company. We still have liquidity of more than Rs 100 crore.
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