Order inflows improved in last 1-2 years, says EIL

Latha: Let me start with the positive news. This extraordinary ability to control costs, can we see more of that, should we see further improvement in margins?

A: Cost control, we have taken it as a foremost priority and we are giving utmost importance to cost control. So, going forward, you will see significant further reduction in the cost.

Latha: The margin, from 27.6 percent can get even better. You can go even towards 30 percent you think?

A: Margins are going to improve further.

Sonia: What was the order inflow that you saw in this quarter and what does it take your total order book to in the first half of the year?

A: The order inflows till September, has been around Rs 2,200 crore plus out of which consultancy has been close to Rs 987 crore. The order book as on September is close to Rs 5,100 crore which is the highest in the last five years.

Anuj: A lot of experts tell us that the kind of rebound that we have seen in refining and oil marketing companies, that is most beneficial for a company like Engineers India (EIL). Have you seen material benefit out of that?

A: The oil companies, their financial positions have improved significantly. They are undertaking big capex projects. So, some of the major capex projects which they have started is euro VI project, which most of the projects have come to EIL. A number of Greenfield Refineries are being talked about so these are good opportunities for the company.

Latha: The total income, the topline is not grown, do you see it better? Why is it that in spite of fairly decent order book your overall revenue has not grown and will that be any better in the second half?

A: Order inflows have improved only in the last couple of years. So, what has happened is the consultancy turnover is increasing quite significantly. Our consultancy, if you see, it has increased by 13 percent year-on-year (YoY) for the first half. The decline has taken place in our turnkey segment because the big projects on EPC basis has not materialised.

Sonia: You said your order book is at Rs 5,100 crore, the highest ever, when is the order from the Vizag Refinery expected?

A: Vizag Refinery is not included in this number. It is expected shortly. We will let you know the moment we finalise the contract.

Sonia: What is the quantum of that order?

A: It will be a significant quantum.

Sonia: What is the progress on the Maharashtra Greenfield refinery project?

A: The land has been identified and the necessary activities for formation of the new companies are under progress now.