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Anoop Kumar Mittal, CMD, NBCC
Jul 06, 2018 | Source: ET Now
Why is this bulge in your order book not translating into earnings? The order book is very high and in comparison to that, the execution or revenue that is coming in the books are lagging but in the last six or eight months, we have started some large-value projects and these projects take some time for approvals and award of work etc. In order to compensate that, we have kept the completion period confined to two years or 18 months and this year onwards you will see the actual growth in execution. Last year, there was some hit on profit because of some arrears of pay revision but that was one- time expenditure. So, that was another reason. This year onwards you will see at least 30% to 35% growth in the top line and that will continue for the next five years. Accordingly bottom line will also rise.
On guidance of a 35% CAGR growth ahead: I am sticking to this guidelines of 35%. But that is the minimum and that can increase by another 5-7 Also, we are expecting some good orders in this financial year also, another Rs 20,000-25,000 crore worth.
Looking at acquiring two loss-making PSUs : The companies that we are acquiring this year are doing almost similar job like we do. They are also doing cost plus job but they are in different domains. One of the two companies which we are planning to acquire now are; a) HSCC (Hospital Services Consultancy Corporation). They are in health service and that company is also doing good. It is not a sick unit, It is a profit-making company with a good amount of orders -- almost Rs 10000 crore. We are acquiring this company just to have a separate company in the health sector. These companies will give definitely good dividend to NBCC and good business. The other company has EPI business in overseas market. In both the companies, the total staff strength is very limited because in our business model, the only expenditure is employees cost. If there are not too many employees, then we can win the battle.
Do you think somewhere wage is going to be a permanent challenge for NBCC? No, that pay revision has already taken place last year and it will not come in for next seven years. This is a one-time affair for both the central government employees and PSUs.
On the Dharavi Redevelopment : this issue is still under discussion and finally the state government has to take a call and it has not been decided yet. We are equally keen to do this work not only as a business otherwise also. We want to take this challenge to convert this 550 acre slum into Smart Township or integrated township.
Order break-up: Around 75-80% business is from central government or central government entities and the remaining 20 to 25% is from different state governments.
Government
PSU
CAGR
Weekend Reading
Construction
NBCC
Dharavi