Key takeaways of the conference call
Revenue break-up for FY09 sales is – Share of water projects to sales is about Rs 2500 crore; that of Building is Rs 1000 crore; Power is Rs 600 crore and Transportation is Rs 600 crore.
Order book as end of March 31, 2009 was at 14500 crore and of which about 69-70% is accounted by water & irrigation projects. The company is placed as L1 for orders worth about Rs 1200 crore. The company expects to close the current fiscal with an order book of Rs 16-18000 crore.
Expects to conclude the current fiscal with a topline of Rs 6500 crore. The EBITDA margin will be around 10.2% given the current order book mix.
Capex for current fiscal is Rs 75-100 crore. The planned capex for current fiscal will vary depending on the project, if a project requires new equipments then it will go up or the projects inflow for the fiscal is of same type and could be executed with current fleet itself then it will be lower at the end of the fiscal.
IVR Prime, the subsidiary of the company is not to take up any commercial realty projects but expected to launch 3- 4 projects residential projects. The company expects to start work on building Sriperumpudur low cost housing. This project is expected to have a price tag of 2500-3500/ sft. Similarly the low cost housing project in Hyderabad also to be launched with same price tag. As far as Noida the company will reengineer the project where it has foundations in place. Nagpur, pune, noida, Hyderabad and Chennai will be the focus areas.
Current year margin came under pressure on account of project mix as well as provisioning towards bad debt amounting Rs 3-4 crore. In order to buildup Pre-qualifiaction criteria especially in some new verticals, the company was forced to bid aggressively for some projects compromising margins. The company bid for quite few power projects to muster PQ criteria and this contribution being higher in the fiscal the margin came under pressure. These projects were coming to an end and thus the margin could start pickup from 3rd quarter of current fiscal.
AP itself is going to come out with Rs 25000 crore of irrigation orders.
Dividend income is called as other income. Other operating income (clause 49) some of the projects and consists
As end of March 2009, the Debtors is Rs 1150 crore, Inventory is Rs 800-850 crore, Loans to Subsidiaries is Rs 370-380 crore
Debts /Loan fund were Rs 1400 crore as end of March 2009. Debt largely of working capital loans. Apart from WC loans that also includes outstanding FCCBs, NCD. The current interest cost is about 10 to 10.5%.
BOT projects – The Kumarapalayam Tollways that builds, the 47 Km stretch between Kumarapalayam and Chengapalli in TN has completed. The Salem Tollway’s road project will complete by Oct 2009. Jalandar-Amritsar road project will get completed by Sep 2009. The delay in BOT projects is largely on account of Right of Way (RoW).
On Power sector TL & substations is a big business. It has enough PQ capability for RE projects, Transmission Lines of 220 kv, 440 kv. The company has now bagged a 765 KV Transmission Line project on trial basis from PowerGrid. Generation side the company is bidding for BoP opportunities.
Since about 75% of the order book is in water & irrigation projects, roads the company had not made aggressive bid in these verticals and will also not do it as it has enough PQ capability in place. But in new verticals the company has to be aggressive to develop that business and that segments margin will be compromised. On overall basis with majority of order book is of high margin zone the overall margin will not suffer.