IVRCL - Interview

IVRCL sees turnover at Rs 4,800-5,200cr ahead

Sudhir Reddy, CMD, IVRCL, said there was a 31% EBITDA growth over the previous quarter. "The company is looking at a 45-50% growth." He expects a turnover of Rs 4,800-5,200 crore going forward.



Excerpts from CNBC-TV18's exclusive interview with Sudhir Reddy:



Q: Your bottomline is lower than our expectations, have your margins slipped quite a bit in Q4 then?



A: No;this is some other revenue. We have taken into account managerial remuneration of Rs 4.4 crore, foreign currency convertible bonds, and notional forex loss of above Rs 6 crore. On a net aggregate basis, there is a 31% growth on EBITDA over the last quarter.



Q: In terms of pure orders that were executed, can you just break up what it stood at between water and road?



A: Water constitutes about 53%, roads would be about 9%, and the balance would be in the power sector.




Q: Can you just walk us through again the figure that you indicated in terms of operating profit margin performance and whether or not you have had some cost pressures because of input cost?



A: No, we didn’t. It was not input cost pressures, these were tenders with full price escalations which we were involved in. Close to Rs 10-12 crore is what we had to deduct this Q4 as per suggestions from auditors. In absolute terms there is a growth of almost 31% on EBITDA. For FY08, there is a 58% growth on topline from Rs 2,346 crore to Rs 3,700 crore.



Q: Could you take us through the kind of order flow that you have seen in Q4 and where does your orderbook stand now at the end of FY08?



A: We have Rs 13,000 crore of orders in hand and are L1, or lowest bidders, in another Rs 1,100 crore. We normally get 98-99% of full works. In total, we have orders worth Rs 14,000 crore. Out of which, 53-55% is in water. We have not taken any roads project on the build, operate, and transfer side last year. We are concentrating on completing whatever we have. So, the balance is coming out from the power side.



Q: There has been quite a few execution concerns about the entire space. For FY09, what sort of growth do you think IVRCL can maintain?



A: We are quite confident. I am sure we can do it as we have had 40-45% growth in the last 8-10 years. On a higher base, 45-50% might be a tough asking, which we would attempt to. However, we can execute a turnover of Rs 4,800-5,200 crore going forward.



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