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Om Metals Infraprojects, a hydro-mechanical engineering company held a conference call on November 19, 2010. In the conference call the company was represented by Vikas Kothari, Director Business Development and S K Jain, CFO.
Key takeaways of the conference call
Standalone net sales for Q2FY11 went down by 40% to Rs 34.24 crore and the EBITDA was lower by 38% to Rs 10.1 crore. Eventually the net profit for the quarter was down by 58% to Rs 4.1 crore. Net profit margin contracted to 12% as against 17% during the corresponding previous period. Similarly standalone net Sales for the half-year ended September 30, 2010 rose by 2% to Rs 91.26 crore and the EBITDA was lower by 8% to Rs 24.97 crore. The net profit for the half year was eventually down by 17% to Rs 13.2 crore.
Lower Q2FY11 turnover is on account of heavy rains in July-September period, which has delayed the inspection/clearance and billing of works done in projects such as Kalisindh etc. The company has lost revenue to the tune of Rs 13 crore in Kalisindh and about another 9-10 crore in four other projects aggregating about Rs 22-23 crore for the quarter. Since this has been billed during the Q3FY11, the third quarter will see sharp jump in revenue.
The company is confident of clocking a revenue growth of 30% in topline and bottomline. The engineering division alone is expected to clock a revenue of Rs 225-250 crore in this fiscal. The company is confident of sustaining current level of margins.
RE is not expected to generate Revenue in this fiscal as its second residential project at Kota i.e. OM Urban Heights is expected to cross revenue recognistion milestone only in May-June 2011. The company has booked sales in this project and have received customer advances. The project is expected to generate revenue to the tune of about Rs 60 crore in 2 years since May-June 2011.
The company expects an incentive of Rs 9 crore on a contract value of Rs 60 crore from NHPC. The incentive is for early completion of the project ahead of the schedule. The company expects about Rs 5 crore to be accounted in bottomline after some expenses.
Segment revenue of Engineering was down by 21% to Rs 33.95 crore and that of Real Estate was nil compared to Rs 11.8 crore in corresponding previous period. The segment revenue of Hotel & Mulitplex was higher by 23% to Rs 1.72 crore.
Unexecuted order book of the company is about Rs 1125 crore as on today. The order book is executable in next 30 months.
The company has 4-5 orders worth about Rs 200-300 crore under various stages of bidding.
In Q2FY11, the company bought 5 acres property at Jaipur for Rs 158 crore, through Maharaja Shree Umiad Mills Ltd. The project will be executed through its 100% subsidiary, Om Metals Consortium Pvt Ltd. The project which is expected to be launched in January 2011 is expected to be completed over the next 3 (three) years from the date of start of construction. The project entails the development of high-end apartments focusing on niche clientele.
During Q2FY11 the company has bagged Pench Diversion project which is worth Rs 35.5 crore from MP water resource dept.
Since there is a delay in NEEPCO revising structural and technical parameters for the Kameng project, the company has sought for price revision.
The company has pre-qualified for two projects in Bhutan and the Kotibhel project (both 2a & 2b) of NHCP in India.
The company is looking for acquisition of a company in engineering space. It has identified and is in active discussion with couple of companies. Expects to close the deal within this fiscal. The company acquired will be in heavy engineering space. On acquisition the company's order book will jump.
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