We are on track to meet FY13 growth target: Rel Infra

Moneycontrol.com

The kind of revenue growth which infra companies, including Reliance Infrastructure saw in FY12 is not sustainable, said Lalit Jalan, chief executive of the company.  The Anil Ambani-led firm had seen around 60% growth in its operating income to Rs 24,272 crore in the preceding year, on improved order flow from its engineering procurement and construction (EPC) segment. Currently, investment is drying up in infra space but companies are looking forward for policy announcements that could propel growth in the sector. During an interview with CNBC-TV18, Jalan talked about the company's order book growth and whether it will be able to achieve desired revenues in the FY14. "We had guided for Rs 6,500-7,000 crore revenue from our construction business for FY13 and we are well on track to meet target," said Jalan. He further said, their current order book of Rs 12,000 crore is sufficient for the ensuing 6-7 quarters. Below is a verbatim transcript of the interview: Q: Can you start off by walking us through what happened on the Engineering, Procurement and Construction (EPC) business side because over there, the performance was a bit weak? A: If I look at the EPC business for Reliance Infrastructure, it is unfair to compare EPC current revenues with just the preceding years. If you look at our EPC business, historically it was running at an average run rate of Rs 3,000 crore of top-line every year. Last year was a stupendous one off year where the revenue jumped 3 times --300 percent jump in revenue to more than Rs 11,000 crore which was not sustainable. At the beginning of the year itself, we had given a guidance that this one off performance of FY12 was not sustainable. We had guided for Rs 6,500-7,000 crore of revenue from our construction business for the current year. We are well in line to achieve this turnover of EPC. Compared to our regular EPC turnover, this is a growth of more than 100 percent in terms of our top-line. Going forward, we expect that we will be able to maintain these Rs 1,700-1,800 crore of revenues per quarter. Looking at the order book, it stands at about Rs 12,800 crore, which is enough to last us for about 6-7 quarters. There are several very large projects, which -- whether Reliance Infrastructure or Reliance Power -- are awaiting requisite clearances. We are hopeful that clearances on some of these large projects would happen over the next few quarters and we will be in a position to announce the increase in our order book.