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Last Updated : Feb 04, 2020 02:36 PM IST | Source: CNBC-TV18

Expect 10-12% margins from Mumbai metro project: HCC

The Mumbai metro project is likely to take 6-9 months to get fully mobilised and will start accruing turnover only by the fourth quarter of FY17, said Praveen Sood, Group CFO, HCC.

Infrastructure major HCC's standalone net profit for the June quarter rose 17.49 percent to Rs 10.88 crore on the back of higher income. Total income from operations increased to Rs 982.45 crore from Rs 975.07 crore in the year-ago period.

Praveen Sood, Group CFO of the company told CNBC-TV18 that the company's order book has logged a growth after a long time company and that going forward transport sector will lead the growth in the order book.

According to him there is likelihood that the company may win arbitration awards worth Rs 3000 crore.


He said the Mumbai metro project is likely to take 6-9 months to get fully mobilised and will start accruing turnover only by the fourth quarter of FY17 or the first quarter of FY18. The margins from the project are expected to be around 10-12 percent.

Following are the excerpts from his interview with CNBC-TV18

On orderbook growth outlook:

We have seen the order book growth after a long period. I think the last quarter was the first one where we seen some order growth and this is a second quarter in continuation where we are seeing some order book growth. I think this sector always have some kind of a lag period once we receive the order, I think lag period could be anywhere from 6 months to 9 months. You will find the turnover growing maybe after the first quarter in the coming financial year. First quarter means January to March quarter; you will find some turnover growth. Till that time I think you will have to be patient with a flattish kind of a growth.

So far whatever we have seen is that only one sector basically is giving us the order which is the transport sector. So all the orders which has basically been received by us in the last couple of months are basically coming from the transport sector, may it be Delhi metros or metros or the road work or may be the tunnelling work through the railways. So where we are basically working with other sectors also which is the hydro power sector, nuclear power sector and the industrial sector. I think slowly the growth should also come in those sectors also. By that time we think that this trend will continue further and the order book will be much more diversified as compared to today where it is more focused on the transport sector.

You will find revenue pie would be shifting towards transport sector in the coming may be say one year or so because my order book is coming from this sector more or less. However, to be honest it doesn’t make a difference to us because we are always working with the niche area of the market. Even in the transport sector when people feel that the transport sector has a low margin, but that happens only in the case of the normal roads which we do. If you look at my order book you will find even in the transport sector they are well diversified.

I think though the pie will shift towards the transport sector but I think my margin will continue to remain in the double digit level.
First Published on Jul 29, 2016 11:09 am