News Detail

• Speaking to CNBC-TV18, chairman of Mcnally Bharat , Deepak Khaitan says that they have recently bagged a landmark Rs 120 crore order which will mark the company’s entry into the road sector. “We have started concentrating on this sector recently and this will be the first large order we have bagged which will get us into a totally new area of infrastructure in the future,” he said.The company also bagged a smaller order worth Rs 20 crore for extension of a material handling plant which was set up earlier.“The revenue flow will come in for FY13, with margins around 10%,” said Khaitan.
• He goes onto say that they are looking at increasing their orderbook to Rs 3,500-4,000 crore by the end of this fiscal.
• Q: Can you take us through the two orders that you have bagged which have been disclosed today? There is some amount of confusion actually as for the correct amount. Is it a Rs 144 crore, am I right?
• A: Yes it was Rs 144 crore by way of two orders. One is around Rs 120 crore and the other is about Rs 22 crore. The Rs 120 crore is a landmark order for Mcnally Bharat because it gets us into the road sector. We have started concentrating on this sector recently. We have a full fledged team now working on it and this will be the first large order we have bagged which will get us into a totally new area of infrastructure in the future.
• The Rs 22 crore order is an extension of a material handling plant. It is a small order for which the initial material handling plant had been put up by us. So this is a small order on the extension.
• Q: Could you tell us the timeline of execution, just to get a sense when the revenue from these two current orders would flow in and also at what margins?
• A: This all is going to flow in into revenue of 2012-2013. Normally these orders are between 15-18 months, so whatever orders we book now is for FY13 and 2013-2014. Margins are round about 10%.
• Q: What does this take your current order book up to and any orders that you are currently bidding for?
• A: Current order book would go to about Rs 3,300 crore. We are in process of bidding for many jobs, but there is a slowdown taking place. Hopefully we feel that this should get over in two-three months time.
• We have a plan to be at about Rs 3,500-4,000 crore pending order book on 1st of April. So we are keeping our fingers crossed, it's just that it is taking time with whatever is happening in this country.
• Q: Just want to get a sense of how McNally Sayaji has been doing because that is one space where you have witnessed pressure in the past. Have things turned around for the better?
• A: McNally Sayaji is still under pressure. It is having problems on order off take, in the sense that customers are delaying payments, delaying inspection and we are chasing those things up - that’s the main problem. The order booking is not a problem. We are going slow on order booking now because there is no point in booking orders when the customers take slack. So we hope things will improve in the last quarter.
• Q: Are margins as well under pressure over there, because even last quarter it declined by in excess of about 300 basis points. Could you give us a sense of that?
• A: Margins are under pressure in our business at the moment because raw material price increases have taken place and we are not able to pass that on to customer with the slowdown in the economy.
• Q: So how much lower could your margins it go?
• A: I think we should end up at about 14% against a planned budget of 18%.
• Q: Have you managed to reduce your interest cost? Could you give us a sense of what the debt on the books is?
• A: I would not be able to tell you such details, but our debt is under control.

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