McNally Bharat Engg eyes Rs 1800-1900cr revenue in FY11

McNally Bharat Engineering Company has posted a net profit of Rs 11.3 crore in the December quarter against Rs 7.4 crore in the same quarter a year ago. Its net sales came in at Rs 378 crores for the December quarter versus Rs 332 crore, year on year (YoY).

Deepak Khaitan, chairman of McNally Bharat Engineering Company, in an interview with CNBC TV-18's Anuj Singhal and Latha Venkatesh, pointed that the company's current order book is at  Rs 4,000 crore.

"We hope to do about Rs 800 crore this quarter, but we hope to start the new year with an order book of about 4,500 crore," he added. Khaitan says the company expects to achieve around Rs 1,800-1,900 crore revenue in FY11. Below is the verbatim transcript of the interview. Also watch the accompanying video. Q: On sales parameters, where you have reported slightly lower than expected numbers, but on the bottom-line your numbers look quite good. So, if you could take us through what impacted sales and also what is being your operating margins, have they led to this higher than expected growth in bottom-line? A: Our income is at Rs 1,064 crore against Rs 894 crore last year, last quarter which is a growth of about 19%. EBITDA has gone up to Rs 72 crore against Rs 59 crore, which is rise of 22%, profit before tax is at Rs 41 crore against Rs 24 crore which is the increase of 60%. Q: Your net sales for three months was at Rs 378 crore versus Rs 332 crore, we have that from the BSE and your profits are at Rs 11.3 crore versus Rs 7.3 crore. A: That is right. Q: How did the margins perform? More importantly, you had guided for full year revenues of about Rs 1,900 crore, since you said nine months, you did Rs 1,063 crore, it would be tough to get to that guidance. A: No we still stick by the guidance. In this business the last quarter is always high. We are very confident of achieving a number between Rs 1,800 and Rs 1,900 crore. The reason why we are falling short of the number is because some projects are getting little delayed. There are some projects where payments are not coming on time. We are still trying the task, the group has got to get to Rs 2,000 crore, but Rs 1,800 to 1,900 crore number looks fairly achievable. Q: What about order book by end of last quarter, you had an order book of Rs 4,000 crore, at end of Q3 how is the order book looking? A: Order book at the end of quarter three is about Rs 4,000 crore. Q: Where are the payments or the execution getting delayed, you have a large chunk in steel and mines, is it there that you are seeing delay? A: I cannot tell you in which sector. We have got about seven-eight sectors, which are working. In last quarter I have seen little slowdown, projects are getting little delayed. Tenders which were supposed to be given have been pushed to this quarter. Orders started coming in this quarter, which were supposed to happen in last quarter. So, in about 15 months, there seems to be a slowly high interest rate and banking and all the problems, which government is facing is percolating down to various sectors of economy. Q: So you expect this to persist for Q4, what are the signs, how do you read the tealeaves? A: McNally Bharat has the order book, it has to finish X amount of crore of orders by March. We also have virtually got the order book for the whole of the coming financial year. Q: What is your order book at? A: We are at Rs 4,000 crore at the moment. We hope to do about Rs 800 crore this quarter, but we hope to start the new year with an order book of about 4,500 crore. Q: Last time you told us that about Rs 9,000 crore of orders are in various stages of bidding, are you sensing any delay in those getting translated into firm orders? A: Yes. We are seeing that some of the order booking will be very active in the first quarter of next financial year, which was supposed to be in this year. Q: So you could see them bunched up and coming in quarter one next year? A: Yes. We are very confident of getting big orders in quarter one.