By Rajesh Kurup
KEC Worldwide expects its cross-country oil & fuel pipeline contract enterprise to be a Rs 1,000-crore enterprise and win one other Rs 1,500 crore from world contracts within the subsequent two-three years. Additional, with the easing of uncooked materials costs, it expects enterprise to limp again to normalcy from the fourth quarter onwards. Vimal Kejriwal, firm’s MD & CEO, advised FE’s Rajesh Kurup that alternatives from the photo voltaic sector had been minimal and income from civil enterprise is predicted to double. Excerpts:
KEC posted decrease web revenue in Q2. Was this impacted by the Covid or rise in uncooked materials costs?
There was a marginal influence of Covid on the topline as a result of world restrictions on enterprise, however largely the influence was as a result of uncooked materials headwinds. There was a major rise in costs of metal and aluminium. On the margin entrance, we had some losses in our Brazil subsidiary due to Covid, which ought to ease by the top of this quarter.
How lengthy do you count on the volatility in uncooked materials costs to proceed?
The costs of metal, copper, aluminium and cement have began coming down, and that influence will begin displaying up principally from This autumn onwards. This 12 months we have now an order consumption of Rs 12,000 crore. With the execution of those orders, we can even see profitability as these are at new price ranges. Issues will begin enhancing from This autumn, and we count on enterprise to normalise from Q1 onwards.
How will the acquisition of Spur Infrastructure assist your oil & fuel cross-country pipeline enterprise?
It’s an entire EPC enterprise, which is according to the federal government’s thrust on this sector. Principally our shoppers are GAIL and IOC, and others like GSPL, and the full pipeline capex for these corporations is about Rs 4,000-5,000 crore per 12 months. We intend to develop this to a Rs 1,000-crore enterprise within the subsequent two-three years. Additional, we count on to win a whole lot of world contracts, which is able to add one other Rs 1,500 crore within the subsequent three years.
Why isn’t photo voltaic a spotlight space for KEC?
As of now, there may be not a lot alternative for EPC corporations in photo voltaic, however with the entry of some giants, the floodgates would open. Going ahead, when bigger gamers are available in and the business standardises, we count on main orders from photo voltaic too. Proper now, there isn’t a standardisation in photo voltaic EPC because the builders are from varied international locations, the place companies are achieved otherwise.
You had been additionally anticipating Transmission & Distribution (T&D) EPC orders from Europe?
We simply bought our first EPC order from Europe, and we had acquired a producing unit in Dubai final 12 months. This unit is poised to serve the European market. We are going to now begin getting orders for provide of transmission towers, which is a big enterprise for us in Europe.
What’s your order e book measurement?
Our complete order e book is about Rs 30,000 crore, of which about Rs 7,000 crore is L1 place (lowest bidder). On our tender pipeline, we have now quoted about Rs 30,000 crore and would quote one other Rs 30,000-35,000 crore throughout varied companies. Our civil enterprise is doing properly, and this 12 months our orderbook is at about Rs 6,000 crore. Final 12 months, income from civil enterprise was Rs 1,100 crore, which we count on to double this 12 months. Our concentrate on civil will proceed within the industrial, residential properties, water pipeline and concrete infrastructure akin to metro rail.