He also says that the company's European business is witnessing recovery and its footing in the domestic market remains strong.
Below is the edited transcript of his interview with CNBC-TV18
Q: Let us start with your order book position of Rs 450 crore. This will give you visibility of work up until how long and what do these orders give you by way of margins?
A: This order book of Rs 450 crore is in the first quarter of April to June. Of course I see this year to be a very good one for us.
In the first quarter itself, we expect some more orders and it can be anywhere between Rs 420 crore to Rs 450 crore with some small orders here and there. But the large order, which we have booked, is about Rs 116 crore worth of Chennai Metro pumping station and about Rs 262 crore worth of orders from Nepal. I am also expecting some more major orders to close before June.
Q: This is the order of the joint venture (JV) isn't it, the order book. What about the standalone VA Tech Wabag?
A: Standalone VA Tech Wabag will also be good because only the Nepal order is on a JV, but we are the leaders. So, the entire order can be attributed to us and we will share it with the partner. The other orders which I am expecting to close will be solely ours.
Q: The concern for your company really has been international operations especially in Europe, because the standalone entity continues to do well even on the margin front. By when will the transition be complete in terms of Europe from moving to slightly lower cost economies and by when will we see an impact on the financials because FY13 was relatively muted for your company?
A: Let us understand that Europe basically caters to the markets which are emerging market for them in North Africa and other places. So with the Arab spring and all these things the African market was hit, but now I find good recovery and we expect one order from Egypt very soon.
It will be a good order, and definitely this one was obtained by good backing from India because it has been understood that lot of support will be provided to our European office from India and our Turkey office so that they become very competitive and they again come back to good order growth path.
About international market another thing I must say that Wabag India is expected to do very well in the Middle East and we expect some good orders from Philippines as well.
Q: What about domestic desalination projects, what kind of revenue should we see in FY14 on these projects?
A: I must tell you that the domestic desalination projects are always very few because leaving some part of coastal Tamil Nadu and some part of Kutch Gujarat, there will not be many desalination projects in the domestic market.
But definitely with the million others, we are on a very strong footing in the domestic market and there could be some more movement in Tamil Nadu domestic market where series of projects are going to be announced soon. So we expect it to do very well.
Other domestic markets as you know that the domestic market is going a bit slow. So we have concentrated more on the countries in the vicinity of India and that is why we are very positive about order booking for Wabag.
Q: Can you give us some numbers on what kind of revenue growth you will see in FY14 and FY15 if you have visibility since you are talking of order books and how will your margins perform, will you do better than the 13.5 that you have been doing?
A: The numbers and guidance which have already been provided are much better than the first years and you must have seen that in our profit and loss account on standalone basis we have grown hardly 4 percent last year that is because we had lower order book in the previous years.
With adequate order book now we expect very good order book in this year. I am sure it is going to reflect everywhere in the results at least in the next coming two years.
Q: In last quarter you improved your working capital cycle quite a bit, that was one positive that came out. Is that process continuing or is the upside from that part over?
A: That is the focus our entire company has and we are very much on to it and I am sure that working capital is going to come down substantially and our receivables position will substantially improve this year because there were some of the two three large elements in the receivables which is affecting our working capital and we are going to come out of it very soon.
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