Despite posting a weak Q3, Parag Shah, managing director, Man Infra says the company is likely to post a tepid Q4 too and the reason for the same is the shift in the company’s business model.
In an interview to CNBC-TV18, Shah says the company is now shifting from the engineering, procurement and construction (EPC) business to real estate contracting and real estate developer.
He expects FY16’s revenue to be driven by the real estate development side.
Below is the verbatim transcript of Parag Shah’s interview with CNBC-TV18's Sonia Shenoy and Reema Tendulkar.
Sonia: This quarter has been weak but going ahead into Q4 can you just give us a sense of what is expected?
A: This year Q4 will also remain more or less same like this quarter. Last year nine months result was Rs 25 crore at the profit after tax (PAT) level. This year nine-month result is Rs 44 crore.
Sonia: What went wrong in this quarter?
A: Nothing has gone wrong, the business model is changing. We are starting new projects and the new projects will start by first week of April or the month of March end. So these results you will be able to see better from second quarter of next year.
Reema: When we had spoken to you last time sometime in November you had indicated that the company is looking to launch about four to five projects in Q3. Did the company manage to launch these projects or if that has been delayed?
A: We had already launched one project. Another project is supposed to be launch maybe in next 10-15 days time.
Sonia: So when you say the business model is changing what do you mean?
A: We are more into engineering, procurement and construction (EPC) business and now we are entering more into real estate contracting also as well as real estate developer also. So, we are expecting the Intimation of Disapproval (IOD), CC maybe in the next seven or eight days time and the six-seven projects will start soon.
Sonia: So, say, by the end of FY16, by the end of next year since you have many projects that are coming on board, real estate projects, what could the revenue profile of the company be?
A: The revenue profile, the more you will get it from a real estate developer side and the contracting business also will continue but we will be more focussing on our own projects.
Reema: Can you give us a break up how much of a revenues do you expect to come from the contracting side of the business and what percent of your revenues will be on the back of your own project and what is the difference in the margins?
A: We expect somewhere around Rs 2,500 crore jobs in hand within next six months time from our in-house projects.
Sonia: This is from your real estate projects?
A: Yes, on our EPC side.
Sonia: And what is the order book?
A: As we had not taken the new order the present order book is somewhere around Rs 400 crore but the jobs are starting now and we expect to grow by somewhere around Rs 2,000 crore order book in the next six months time additional.
Reema: So, that is on the EPC side. What about on the real estate side?
A: Real estate side we cannot quote you on a quarter-on-quarter (QoQ) basis but less in next five year’s time we expect the topline somewhere around Rs 8,000 to Rs 9,000 crore.
Eye Rs 8-9k cr topline in next 5 years: Man Infra
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