He says that their Balaji Toll Project will be completed by December 2008. Bbarot also adds that margins are expected to rise substantially by Q4 FY07.
Excerpts from CNBC-TV18's exclusive interview with Rajhoo Bbarot:
What is the growth that you see for this company, and which segments do you expect it to come from? What do you hope to do in terms for revenues by the end of FY07?
We are in emerging sectors like infrastructure, BOT, mining and real estate. If you look at our past performance, there has been consistent and substantial increase in YoY growth. Going forward, the same or a better trend will be maintained.
Moreover, from the last quarter of the current fiscal, we will be having an additional stream of revenue from the completion of our Mumbra bypass, which is a BOT (build-own-transfer) project where substantial investments have already been made. So this will add to our revenue, topline as well as the bottomline.
When will the Mumbra project start giving you revenues?
From January 2007, the last quarter of the current fiscal.
What about the Balaji Toll project?
The Balaji Toll project is to be completed by December 2008. Thereafter, that will be in the special project vehicle, whereas the Mumbra bypass is on our own balance sheet. So that will start giving immediate effect to the topline and bottomline of the company.
How much will Mumbra give you to the topline and how much to the bottomline?
I cannot give you the exact figure. As per our prospectus, we have more than 22 per cent internal rate of return for the Mumbra bypass project, Rs 130 crore (Rs 1.3 billion) investments are going to be completed.
More than 95 per cent investment has already been made, and 95 per cent of the project has been completed. So all this will substantially add to our bottomline from the last quarter of the current fiscal.
Where does your current order book stand when you break it up between EPC and mining?
Between EPC and mining, last year our revenue mix was 89 per cent EPC and 11 per cent from mining. Now, that will be slightly amended because of revenue streams coming in from our BOT projects.
Where do you see margins stabilising for the next few quarters or even by the end of the next financial year?
As I said, it will be substantially going up because the same trend of our two sectors mainly EPC and mining will be maintained. An additional stream of revenue will be there from the last quarter of the current fiscal, and for ten years thereafter from the Mumbra bypass BOT build-operate-transfer project, which has got a substantially high IRR.
Could you sketch out your real estate plans for us? Will this entity be a part of the listed company that you have at this point or is that a separate subsidiary that you are floating?
As already given in our prospectus, the land at Thane, which is 9,00,000 square feet, is already on our balance sheet. In the next five years, starting from 2008, we will be getting the revenues from this land at Thane.
We have made an investment on a 50:50 basis that is in the SPV for the Goregaon land. That will be coming in from the year 2007 as a return on our investment, and will be adding to our bottomline as well as topline.
