McNally Bharat targets sales of Rs 2500cr for FY12

Deepak Khaitan, chairman, McNally Bharat in an interview with CNBC-TV18 spoke about the company's quarterly performance.

He said, "The company's current order book stands at Rs 4,000 crore. We have to execute minimum of Rs 2,300 crore at least to maintain our execution profile." He also said that labour will be a major cause of concern in the future for all EPC contractors because of shortage in supply. Below is the verbatim transcript of Khaitan's interview with  Sonia Shenoy and Seema Modi of CNBC-TV18. Also watch the accompanying video. Q: Just tell us first up about the order book, because the last time you had spoken with us, you indicated that there is a serious slowdown in terms of order execution etc. Have you faced any of that this quarter as well? A: We had planned to get an order book of about Rs 500 crore for the quarter and one large order of Rs 365 crore came in the first week of April. We have achieved target for the quarter on order booking. Our order booking stands at nearly Rs 4,000 crore as of first of April going forward. The next six months are critical for the company, because we are expecting some very large orders to come in. Going forward, we have a guided to do a topline of about Rs 2,500 crore odd for this coming financial year. With this order book in hand, we have to do this sort of number to meet our dates of execution. Q: What happen this quarter? There has been a muted performance on your bottomline. Your margins have dipped as well? A: It all depends on the orders which are closing. There was a little bit of a hike in raw material costs which was unexpected. There is generally a slowdown in getting contract labour for execution of jobs. Thus it is becoming difficult. And towards that we are going in for modernization of our civil division by buying more equipment and hat will take about six months to rectify. But, that is where I foresee in execution of EPC contract going forward in a contract labour content which will become short and therefore will become expensive. Q: All of this is been extremely painful on your P&L. Your margins have contracted to low single digits now. Is there any scope of improving margins or do you think it would stay at these low levels? A: I don