In an interview to CNBC-TV18's Nigel D'Souza and Reema Tendulkar, S Ramnath, CFO of ITD Cementation spoke about the latest happenings in the company and the road ahead.
Below is a verbatim transcript of the interview
Nigel: What does your order book stand at and what is the pipeline looking like?
A: As of March quarter, our order book is around Rs 4,100 crore, highest in company's history.
Reema: Your company was responsible for the Sabarmati Riverfront Development Project. Now, we have a separate ministry, which will be looking even into the Ganga cleaning. So the expectation in the market is that perhaps you could be the frontrunner as and when this tender is floated. Are you aware of when they are likely to do so and will your company be interested in bidding for this?
A: As far as capability is concerned, we have the capability to handle this type of project, but other things are speculative. We have the in-house capability to do several of these projects. We have demonstrated in Sabarmati. The other things are purely speculative. It would not be proper for me to comment upon that.
Reema: What could be the rough size of such a project?
A: It could be very large. It depends on how you want to execute these type of projects. It could be hundreds of thousands of crore, so it is difficult to say because it is a very large area.
Also Read: Gift to Varanasi: Narendra Modi vows to clean Ganga
Nigel: Hypothetically speaking, what would be the margins on a project like this given that in fact your margins are hovering around that 7-8 percent odd, so what are your margins that you are looking at going ahead?
A: Typically, we don't give any forward guidance on margins and all that. All I am saying is we look forward to good growth in the next few years although we have to navigate a couple of difficult quarters this year. So I think up to September we still have to pass through some difficult times not that we have stuck in any projects or anything like that but there are payment delays from customers and delays in contracts moving forward the way we would like.
So I think these have to be addressed but going forward, already we can see some green shoots of investment hope and things happening. So FY15-FY16 these things should look definitely better and we have been able to grow our order book, that itself shows that going forward things should be better.
Nigel: If things are looking good and in fact we are seeing enough of green shoots then would you be moving back into profitability because the last quarter itself there was a loss that you reported so when can we see you moving back into the black?
A: I think in the next couple of quarters -- in our line of business you cannot compare performance. We are in a contracting industry, you cannot compare performance on a quarter-on-quarter (Q-o-Q) basis. So some quarters depends on the jobs that move or don't move or the product mix and things like that. So on a year-end basis, we should be alright. First two quarters will be a bit difficult, Q3 and Q4 we should be alright.
Reema: You spoke about some payment delays from your customers. Can you quantify the quantum of receivables?
A: Our receivables on an overall basis have not moved up. They have remained the same.
Reema: What is the level?
A: Level will be about Rs 300 crore.
Nigel: What is your total debt at present?
A: It is about Rs 700 crore.
Nigel: Will you be looking at reducing that going ahead or are you comfortable with that Rs 700 crore?
A: Nobody will be comfortable with given the cost of debt today. If there are options, we will always be examining on a continuous basis options to reduce our debt both operationally through better performance and other revenues if they are available.
Reema: What are the viable options to reduce your debt at current levels?
A: Presently, we have not made up our mind but like any company we have to look at reducing cost of overall debt through operational inflows and also if some other lower cost options of financing are available. So at the moment, the cost of debt is not likely to go down in the next quarter or so. So we will have to wait for sometime.
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