Aim to build 400-km strong order-book: IRB Infra

The company’s Ahmedabad-Vadodara project has started, Anil Yadav, CFO, IRB Infrastructure Developers says. Talking to CNBC-TV18, he says in Talegaon-Amravati, the company has started the provision toll collection from April 26, 2013 and has seen year-on-year growth of close to 10 percent on toll collection.

He says the company has an Rs 8,400 crore order book position, of which Rs 6,400 crore is the engineering, procurement and construction (EPC) order which will be executed over a period of two to two and half years. Going forward, the company aims for an order book of 300 to 400 kilometres in a year. Here is the edited transcript of his interview with CNBC-TV18 Q: It has been a strong quarter for you all this time around. Can you just take us through how exactly the execution was, because that also was the key driver in the previous quarter? A: During the quarter, our Ahmedabad-Vadodara project has started. In the Jaipur- Deoli and Talegaon-Amravati projects, we have completed almost the entire project length. In Talegaon-Amravati, we have already started the provision toll collection from April 26, 2013. We have seen year-on-year growth close to 10 percent on toll collection. Q: Let us talk about the margin picture because prima facie, it looks to be slightly on the higher side – 44.6 percent against market expectation of 43.8 percent. Could you tell us more about that and going forward, what is the outlook? A: As far as margins are concerned, if one compares with the quarter, margins have remained more or less in the same range. Going forward, we believe that the margins will continue in the same range if the raw material prices will not increase significantly. As one is aware, the construction revenue is also increasing and the fixed cost like overheads and other thing is not increasing in proportion. That is why we are able to maintain healthy margins. Q: Just throw some light in terms of the toll revenues this quarter around, and how exactly traffic growth did, especially for the Mumbai-Pune highway – was that one of the key contributors this quarter as well? A: The toll revenue has increased from Rs 269 crore to Rs 276 crore if one compares it with the trailing quarter. If one compares with the corresponding quarter of last year, last year it was Rs 246 crore now it is Rs 276 crore – an increase of 11 percent, Year-on-year we have seen close to 11 to 12 percent growth in the revenue. Mumbai-Pune we have seen the increase in traffic in the range of 5-6 percent. Q: Let us talk about the ongoing project –Ahmedabad-Vadodara. Could you give us some progress on that? A: We have started the Ahmedabad-Vadodara project from January 1, 2013. Construction of NHAI, where we are going to construct 2 to 6 lane of National Highways Authority of India (NHAI), has also started from January 01,2013 and the tolling on the expressway has also started from January 01, 2013. On NHAI, the tolling will start once the construction will be completed and construction period is close to three years. Q: We do understand that your order book stands at Rs 8,400 crore, but how would you be placed in terms of new order wins in FY14, especially from the NHAI, considering what we saw in terms of activity in FY13 which was extremely slow. Any sort of targets that you have put out or any sort of formidable order wins that we can expect which you have foresight of? A: As long as the order book is concerned, we are having Rs 8,400 crore of order book and out of that Rs 6,400 crore is the engineering, procurement and construction (EPC) order which will be executed over a period of two to two and half years. Considering the order book, we have sufficient order book for the next two to two and half years. We are not in a big hurry to get orders for the next or subsequent years. Going forward, based on our cash flow and other thing, we will eye for an order book of 300 to 400 kilometres in a year.