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Kalpataru Power Transmission to scale up business to beat slowdown
Kalpataru Power Transmission, which has so far enjoyed a strong foothold in engineering jobs for the power transmission sector, is scaling up its business in pipeline and railways-related jobs to offset the slowdown in domestic orders.
The company expects to grow at 15-20 per cent with operating margins of around 11 per cent in the current fiscal to March and in the next year 2017-18, managing director Manish Mohnot told ET, in an exclusive interview.
“Things are moving much better in the international market than in India. We have not seen much orders coming from Power Grid Corporation of India in the last six months, but we expect it to change in March and early first quarter of 2017-18,” Mohnot said.
The company’s order book was worth Rs. 8,300 crore as on December-end, which included 55 per cent of international orders, 33 per cent domestic power transmission jobs, and 12 per cent of orders from the pipeline and railway sectors. The international business primarily comes from African countries and the company aims to expand its presence in the continent.
“In the international market, we have projects worth Rs . 4,0005,000 crore to be bid between now and May, on the domestic front it is the same number. Railways is a big number, in the next two months we want to bid for orders worth Rs. 5,000-6,000 crore, and pipeline would be a few thousand crores. As per tendering, we are on track for the next six-seven months,” Mohnot explained.
“Our revenue mix earlier was 90% from transmission and 10 per cent from pipeline and rail. Share of pipeline and railways has already increased to 15 per cent and getting into next year, we expect it to be 20-25 per cent. Clearly, the growth in these new businesses is and will remain higher, but transmission would continue to be our most significant business,” he said.
The company said it is favourably placed as the best bidder for orders worth over Rs. 3,000 crore. The fledgling businesses were also reporting significant improvement in margins and has a robust order pipeline.
“Railways has a big order pipeline and we want to bid for orders worth Rs. 5,000-6,000 crore in the next two months; in the pipeline business, it would be worth a few thousand crores. We are on track for the next six-seven months as far as tendering goes.”
The company , which is currently executing two projects under the public-private partnership model, will continue to explore more projects and will also look for financial partners for these projects.
“It is a competitive market and at times we do see irrational bids.If we look at Kalpataru’s philosophy, our focus is profitability.We don’t participate in it unless it is strategic,” Mohnot said. Julien Gauthier Womens Jersey
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