GOOD MORNING FRIENDS-
Man Infraconstruction Ltd on Friday reported a 28.77 percent increase in consolidated net profit at Rs 7.25 crore for the quarter ended December 31, 2015. The infrastructure firm had clocked a net profit of Rs 5.63 crore for the October-December period of the previous fiscal. The company's total income from operations remained stagnant at Rs 56 crore. Total expenses declined to Rs 44.93 crore from Rs 53.29 crore in the year-ago period. The net profit on standalone basis stood at Rs 14.97 crore during the quarter under review as against Rs 5.49 crore in the year-ago period. Man Infraconstruction has executed port project for Nhava Sheva International Container Terminal at Jawaharlal Nehru Port Terminal, besides having worked at Jawaharlal Nehru Port Trust, Mundra Port, Chennai Port, Vallarpadam Port and Pipavav Port. Shares of the company were trading at Rs 36.65 apiece, up 3.53 percent from the previous close on BSE.
Revenue growth in the third quarter was led by execution at the Pipavav port, says Parag Shah, MD of Man Infraconstruction . The company’s operational efficiency (EBITDA), in the third quarter ended December 31, rose to Rs 11 crore as against Rs 5.8 crore in the same period a year-ago. The profits grew to Rs 8 crore in comparison to Rs 5.4 crore while the revenues came flat at Rs 56 crore in Q3. Speaking to CNBC-TV18, Shah says the company had higher interest cost in Q3 due to higher interest paid to the parent company. Going forward, he expects the growth to be led by the port segment. The company also launch two real estate projects in Mumbai – one in Ghatkopar and the other in Dahisar. The Ghatkopar project of 6 lakh square feet is priced at Rs 13,000-15,000 per square feet and is expected to be launched in March 2016, he says. The company has given termination notice to government for the road project it was a part of, Shah says adding that the company will get Rs 175 crore back. Below is the transcript of Parag Shah’s interview with Reema Tendulkar and Nigel D’souza on CNBC-TV18. Nigel: The numbers look more or less steady, we had margin improvement as well, what part of your revenues came in from your port business as well as your infrastructure business and also, could you tell us what led to this big margin beat? A: This quarter was a major turnover from the rest of years from a ports sector which we are working at Pipavav. Next quarter will also be more or less in the same line, where the ports sector turnover will be higher. Nigel: But what was the turnover? Could you break it up for us? A: I will not be able to say off hand now. Reema: Your finance cost has gone up quite a bit from Rs 3.5 crore. It now stands at Rs eight crore. Has your debt increased on the books or what was the reason for this increase? A: No, debt is only, it is a group company debt. No external debts are there. This is because of consolidation book entry. This year we are managing our distressed assets. Reema: But it has resulted in cash going out of your business to pay this higher interest cost, right? A: We pay the interest to the parent company. In the real estate business, we have a subsidy company. The subsidy company has got a loan from a parent company, so that is why in the consolidated book, it shows as a interest paid. If you see my standalone balance, it is much higher. The standalone in the man infra is getting interest, but the subsidy companies are paying interest. Nigel: You have cash in your books of about Rs 110 crore approximately? A: On March 31, it was somewhere around Rs 180 crore. Nigel: Also, could you tell us what is your current order book for us currently? Could you break it up for us, how much is residential, what part of it is infra and what part of it is port? And also could you tell us you have some big projects coming up in Chembur as well as Ghatkopar. What is the ticket size of those projects? Is there oversupply over there? A : Oversupply is all over the country right now looking at the current month. Ghatkopar, which we are starting the project, which we expect to start by March end, will be somewhere around six lakh sq ft. And we are starting our project again next month at Dahisar, which we got all the approvals and we are launching the project in the month of March which is somewhere around 26.5 lakh sq ft. Reema: What is the value of all this? A: Value in terms of Ghatkopar project, the price range is somewhere around Rs 13,000-15,000 per sq ft and the Dahisar is anywhere between Rs 7,800-10,000 per sq ft. Nigel: You were telling us about two big projects. One was that Ghatkopar project as well as the Dahisar project. You have100 percent on both? A: Ghatkopar project, yes we are 100 percent. Even Dahisar we are 100 percent. Nigel: You had also got into one road project. What is the update on that front? You had paid some advance. Could you generally tell us what exactly is the update on that front? A: We had given a termination notice to the government which has been accepted by them principally and the paperwork is going on. So, I think it will take another one and a half to two months time. Nigel: But you have put some money into this project. Will you be getting some money back? A: Yes, we will get our full money back along with the compensation? Nigel: But what is that money? Could you tell us the amount? A: Approximately around Rs 175 crore, we expect. Reema: That is including the interest? A: Yes, including the interest. Reema: And how much was the principal amount that you had put in? A: We have invested somewhere around Rs 165 crore, but in that we are 65 percent partner and that company, there is a bank loan of Rs 72 crore. Reema: So, the Rs 175 crore includes the bank loan? A: Yes. Reema: If you could also tell us a little bit more about the company margins, they have gone up to 20 percent at the EBITDA level. Is it sustainable or is there a one off element? A: No, it is on quarter to quarter basis, which turnover is increased, you cannot compare. I always say that in the construction companies, EBITDA margin cannot be compared on a quarter on quarter basis, but we will be able to maintain our margins.
