Mr. Vardhan Dharkar, Chief Financial Officer, KEC International Ltd., joined the company in June 2007. Mr. Dharkar is a Graduate in Science and a Chartered Accountant. He has rich experience in various areas of finance, having spent most of his career (1988-2006) with Wockhardt Ltd. in various capacities, progressively growing to become Vice President - Finance in 2002. Subsequently, he joined Dabur Pharma Ltd. as CFO from where he has joined KEC.
KEC International is a billion-dollar, global infrastructure Engineering, Procurement and Construction (EPC) major. It has presence in the verticals of Power Transmission, Power Systems, Cables, Railways, Telecom and Water. The Company has powered infrastructure development in 45 countries across South Asia, Middle East, Africa, Central Asia and Americas. It is a flagship Company of the RPG Group. KEC International has a total of 9 manufacturing plants, including 4 cables units in India located in Vadodara, Maharashtra, Karnataka and Dadra & Nagar Haveli and 5 tower manufacturing units, of which three are located in India in Rajasthan, Maharashtra and Madhya Pradesh, one in Mexico and one in Brazil in the Americas.
Speaking with Hemant Maradia and Yash Ved of IIFL, Vardhan Dharkar says, “The new businesses will continue to grow and profitability will improve in the future.”
Comment on your Q4 Performance?
We are happy with the good top-line growth, which was contributed by increased level of execution in each of our businesses.
What is your current order book position?
The company’s current Order Book increased by 9.9% to Rs 85.72bn as compared to FY11. Of this, 56% comes from the International markets.
The Company has secured new order from Kazakhstan for design, construction and commissioning of 500 kV transmission line on turnkey basis between Yukress substation – Alma substation. It has secured the order from Kazakhstan Electricity Grid Operating Company JSC (KEGOC). Total order value is Rs 4.04bn and the project duration is 32 months. Total line length is 321 kms.
How do you see order inflows in coming months?
For the last two years, we have grown at a CAGR in excess of 20% in terms of order book. Going forward too, we expect good infrastructure orders.
What is the outlook for power transmission business?
For the last 12 months, we have received significant orders in the transmission business both in India and from overseas. The investment in power infrastructure will continue. Therefore, we expect the power transmission business to do well in next 12 months.
What is your capex plan for FY13?
We are planning to invest Rs 750mn in FY13.
What is the proportion of order from PowerGrid?
Power Grid orders are less than 15%.
Will you be able to boost margins of new businesses?
The new businesses will continue to grow and profitability will improve in the future. The margins profile will also improve gradually in all new businesses.
We had said earlier also that the new businesses we have entered have a margin profile lower than normal margin that we have been enjoying.
How do you see domestic demand from power sector?
Short term issues will be there in the power sector. Competition is always there in domestic market.
What is your take on raw material prices?
I expect volatility to continue in the raw material prices.
When do you expect to commission new Vadodara facility?
We expect to commission the Greenfield facility in Vadodara by the end of June 2012.
Brief us about your financials?
For the FY12, Net Sales increased by 29.9% to Rs 58.14bn and the Net Profit increased by 1.8% to Rs2.09bn as compared to FY11.
In Q4, Net Sales increased by 32.7% to Rs20.69bn and Net Profit decreased by 5.3% to Rs744mn as compared to the corresponding quarter of FY11.