NBCC CMD Anoop Kumar Mittal expects order inflow to the tune of Rs 2500-3000 crore in the second quarter, while expecting order book to grow to Rs 30,000-35,000 crore by this financial year end
National Buildings Construction Corporation (NBCC) expects 30 percent growth in topline (Rs 6000 crore) and bottomline in FY16.
Company CMD Anoop Kumar Mittal expects order inflow to the tune of Rs 2500-3000 crore in the second quarter, while expecting order book to be at Rs 30,000-35,000 crore by this financial year end.
He also adds that margins of project management consultancy (PMC) business will improve from current levels.
Below is the verbatim transcript of Anoop Kumar Mittal's interview with Latha Venkatesh & Sonia Shenoy on CNBC-TV18.
Sonia: It's been a strong quarter for you. Take us through what the expectation is in the quarters to come. Will this good performance continue?
A: Yes definitely this progress will continue in the next three quarters. This year's target is about Rs 6,000 crore topline which will be about 13 percent increase from last year's performance as well bottomline will also increase in similar manner. This is an internal target and I am hopeful that we will achieve though the government's target is much less than this.
Latha: Do you see an improvement in margins. Your percentage for project management consultancy (PMC) has gone down even operating profit margins (OPMs) at the overall level; consolidated level is 3.6 versus 3.8. One would have expected margins to improve, isn't it? Costs are down?
A: In quarterly balance sheet, it is very difficult to match all these things but definitely our margins in PMC will increase in this financial year as we are doing few big projects like Kidwai Nagar which is giving lot of revenue in the projects. So I am hopeful that both topline and bottomline will increase simultaneously.
Latha: Last year the Q4 had shown 9 percent margins. Is that the run rate we should expect?
A: Yes, not less than 9 percent. It may increase definitely.
Sonia: What is the order book as on June quarter and how much of order inflows have you seen in this quarter itself?
A: Outstanding order book at the end of June quarter is about Rs 26,000 crore apart from this there are some orders which we have not included in this order book like Delhi Development Authority (DDA) projects of about Rs 8,000 crore and some more projects. Therefore, in future by the end of financial year '15-16 our order book should be somewhere Rs 30,000 crore-Rs 35,000 crore plus few redevelopment projects which generally we do not take in order book.
Latha: You are in a vantage position to tell us whether you see an improvement in the ordering climate, the tendering climate. You have been a stand out performer even during slowdown times but do you see more construction orders in the market?
A: Yes, there will be increase in infrastructure orders and NBCC is government\\'s company therefore whatever orders we are getting, all are from government departments. So I do not see any decline. It will definitely increase in all sectors, not only road or buildings, infrastructure institutional health sector. It is interesting that we are doing 12 medical colleges and few hospitals across the country. Therefore, I see a lot of increase in infrastructure boom.
Sonia: You were saying Rs 30,000 crore to Rs 35,000 crore total order book will be by the end of FY16. What is the order book run rate that you would expect in Q2?
A: It should be in the range of Rs 3,000 crore; Rs 2,500 crore to Rs 3,000 crore because lot of things are in the pipeline and almost in mature stage and by end of Q2 it should be Rs 2500 crore to Rs 3000 crore.The Great Diwali Discount!
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