In an interview to CNBC-TV18's Nigel D'souza and Reema Tendulkar, Shobhit Uppal, deputy MD of Ahluwalia Contracts spoke about the company's latest order win and the road ahead.
Below is a verbatim transcript of the interview
Reema: You have won a Rs 615 crore order. Could you tell us now, with this, what the order book stands at and what will be the timeline of execution of this particular order?
A: Our unexecuted order book stands at about Rs 3,200 crore and this is to be executed over next two-and-half to three years.
The Rs 614 crore order win, primarily, is two orders. One is an order for Rs 202 crore, which is the headquarter for Punjab National Bank (PNB) in Dwarka in Delhi and the other is headquarter of the Police Bhawan in Patna, which is for about Rs 330 crore.
So, these are to be executed over the next two-and-half years.
Nigel: Could you give us some margins on these particular orders? Rs 615 crore—what is the margin looks like; is it 5 percent or is it sub-5 percent?
A: It would be between 5-6 percent.
Nigel: So it will be profitable for you even at the margin level because last year itself your margins were around 4 percent odd?
A: Yes. These are orders, which we have been able to leverage our credentials (with) and these were large prestigious contracts. So the competition was also limited to the likes of L&T and ourselves. So, we feel our margins would be between 5 and 6 percent.
Reema: Last year was a difficult year for you all; your revenues declined by 33 percent so in that sense are you expecting FY15 to see a topline growth?
A: Yes we are. The construction industry bas been going through turmoil and almost all our contemporaries are facing liquidity problem. So, we took conscious decision last year to consolidate and that's why we did not pick up any new order especially in the private sector.
Now, with the change in government, we are seeing the scenario changing. So, we are quite bullish, especially on the government orders. That's why we are projecting a growth of about 20-25 percent in our topline.
Nigel: Earlier this month you have approved a preferential issue of around Rs 50 crore odd, if that happens at the current market price then the promoter stake is going to go to around 74 percent plus, could you take us through the details of this particular preferential order? When can we see it coming about?
A: It will be coming about in next two-three months. We are putting in our own money because there are liquidity issues. In the private sector our clients are not paying us. To tide over these difficult times, we are putting in our own money and this is expected to happen in next two-three months.
Ahluwalia stock price
On July 16, 2014, Ahluwalia Contracts India closed at Rs 113.15, up Rs 5.70, or 5.30 percent. The 52-week high of the share was Rs 135.00 and the 52-week low was Rs 15.55.
The company's trailing 12-month (TTM) EPS was at Rs 3.47 per share as per the quarter ended March 2014. The stock's price-to-earnings (P/E) ratio was 32.61. The latest book value of the company is Rs 36.04 per share. At current value, the price-to-book value of the company is 3.14.
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