Asset-monetisation on the cards; Order-book is healthy: NCC

Nagarjuna Construction announced its results today. EVP-finance, YD Murthy explains to CNBC-TV18 the various facets and highlights of the company's performance during the quarter.

Below is an edited transcript of the interview on CNBC-TV18. Q: Growth in revenue has been ahead of street expectations but there are concerns regarding margins which have declined by 225 bps. What was the reason for the fall?
A: On a stand-alone basis, the top-line is about Rs 1,495 crore, recording a growth of 28%. The net profit is only Rs 16.6 crore as compared to Rs 23.3 crore in the first quarter of last year.
The dip in profit was mainly because of the high interest burden and tight interest rate regime prevailing in the country. But the situation has begun to improve in the current year. We believe that we are at the bottom of the business cycle and from this year onwards, growth can be achieved at 10-15% year-after-year. Q: What is the reason for interest cost coming down on a sequential-basis? Do you anticipate a further reduction as far as interest cost is concerned? What is your plan to bring down debt?
A: In Q4 of last fiscal, we were able to bring down debt by around Rs 300 crore which helped us bring down the interest burden in Q1 of the current year and we hope that it will continue. There are plans to monetise some of our real estate and BoT projects. But it depends on the market conditions and the right valuations. Q: By when do you actually hope to monetise some of these projects that you mentioned? By when do you expect your debt burden to actually reduce?
A: We are at a debt of about Rs 2,500 crore right now. We want to bring it down to below-Rs 2,000 crore in the current financial year before March 31, 2013. Q: How are your order-flows and what are the sectors that are contributing to your order book at this point in time?
A: In Q1, we got fresh orders worth Rs 2,000 crore and with this, the order book of the company at the end of the first quarter, is about Rs 20,500 crore. We are bagging orders reasonably well and according to our budget. A majority of the orders have come in at our buildings and water division.