See FY12 profits improving based on global factors: Voltas

Air conditioning products maker Voltas' 2010-11 (April-March) consolidated net profit declined 6% year-on-year to Rs 357.24 crore. This was due to a sharp decline in earnings at its Rohini Industrial Electricals, the electrical and instrumentation projects arm of the company.

MM Miyajiwala, Executive VP & CFO, Voltas spoke about the quarterly performance of the company and the road ahead. The company's current order book stands at Rs 4,900 crore. He said, "Profitability for FY12 depends a lot on outside circumstances particularly commodity prices, trends in international market in terms of competitive environment, etc. If everything works okay, we should definitely have some improvement in profitability compared to where we were in 2010-11." Below is the verbatim transcript of Miyajiwala's interview with Mitali Mukherjee of CNBC-TV18. Also watch the accompanying video. Q: Could you start of by walking us through what the order book for FY12 looks like and what do you think the execution rate might be going into this year? A: As far as the order book is concerned we have about Rs 4900 crore as on today particularly for segment A, which is international projects and domestic projects. Our international order book is at around Rs 2,800 crore and Rs 2,100 crore in the domestic market. We have some very good orders in this order book. Looking at the kind of visibility we have in the number of tenders filed and the indications that are available both in Indian market as well as in international market, we should do much better going forward. Particularly in Indian market because we have shifted our attention from the traditional areas into infrastructure and industry and that portrait well for our future growth. In water business also, we have done very well in terms of order booking. Going forward also that mark should continue. Q: Profitability for the full year has been impacted though primarily because of what happened with RIEL. What can you tell your investors about the profitability performance into FY12, how much will that improve by? A: Profitability for FY12 depends a lot on outside circumstances particularly commodity prices, trends in international market in terms of competitive environment, how fast is the execution of the project on hand takes place. If everything works okay,  we should have definitely some improvement in profitability compared to where we were in 2010-11 particularly, because RIEL issues are behind us. We had almost Rs 47 crore of swing in the year 2010-11. We have cleaned up the entire system. The new projects in hand have reasonably satisfactory margins and those executions also should provide us good visibility. So generally speaking it should be subject to outside environmental issues. We should have good profitability. Also Read: Voltas FY11 net down 6% on losses at unit Q: You have done about 16-17% in terms of sales growth for FY11. Given that order book you talked about what kind of sales growth do you think you can do for FY12 and on what kind of net profit margins? A: Talking about the full year 2011-12 at this point of time it