Key takeaways of the call

Sales for the quarter were down by 16.5% to Rs 378.22 crore and the net profit was lower by 46.5% to Rs 14.14 crore. Net profit margin was 3.17% as compared to 5.79% in the corresponding previous period. For nine month ended Dec 2010 the topline was flat at Rs 1110.66 crore and the net profit was down by 15% to Rs 58.58 crore.

Lower sales for the quarter were largely on account of the sluggishness in realestate sector, where the company is not able to get payments on time and going slow. This is despite the company is working with good developers.

Started the fiscal with a gross order book of Rs 5000 crore (net order book of Rs 2850 crore) and booked orders worth Rs 1600 crore in the first nine month ended Dec 2010. The gross order book as end of Dec 2010 is about Rs 5433 crore and net gross book is Rs 3435 crore.

Order book mix interms of Govt and private is 28% for Government/ PSUs and balance is from private sector.

The exposure to developers is about 40-45%.

Of the net order book of Rs 3435 crore about 39.5% is from residential, 11.1% is infra, 9.3% hotel, 12.3% commercial realty, 6.5% industrial, 3.5% hospital, 1.3% BOT projects, 1.2% is retail and balance are others

About 20% of the order book is without material supply and 80% are with free material supply. Around 80-85% of the order book has escalation clause for steel and cement.

Debtors over 6 month, including retention money was Rs 100 crore and less than 6 months are about Rs 223 crore. Of the debtors over 6 month of Rs 100 crore, the retention money was Rs 52.38 crore. Till date no progress on recovery front.

Net exposure to CWG project is Rs 60 crore. There is no forcing reason for writing off the receivables from CWG projects. CWG payment will be finalized this quarter.

The CWG receivables are shown part of Work in progress(WIP). The company has Rs 150 crore of WIP compared to Rs 57 crore in corresponding previous period. Revenue recognition of CWG work has been delayed on account of delay in certification of the work.

Most of the realty orders are slow moving. Tight liquidity position – realty players are not getting cash flow as expected.

Of ongoing projects numbering 105, the slowdown is happening in around 30-35 numbers of projects.

Expects a sales of Rs 1700 crore with plus/minus of 5% and a bottomline of Rs 85-90 crore for current fiscal. The topline growth as per current order book is about Rs 22-25% and subject to business environment.

New order inflow is mainly from realty segment and the company will be choosy or careful as far as realty projects are concerned and looking for government contracts.

There is strong undercutting happening as far as government contracts are concerned with pie slowing down. The company has to fall in line with competion to the level but not below survival margin.

By default NCR comprises around 50% of the company's gross order-book, East accounts about 23% and balance is accounted by west and south Given, limited presence in South and marginally better in West the company is focused to increase its presence in these two key markets.

It is valuing WIP based on direct cost. Bit 1-1.5% drop in operating margin and that has been recovered in next fiscal. This depends on certification of projects.

About 20 bids are in pipeline aggregating to Rs 1500 crore plus. Of which about 20-25% from government orders. the company is now focused on verticals were there is no funding for cash flow constraints.

In 9MFY11 order intake was Rs 1600 crore and the company expects order booking to the tune of Rs 600 crore in Q4FY11. So the overall order intake will be higher than 1535 crore clocked in FY10. Order booking in Q3FY11 is Rs 580 crore.

Real estate debtors days is 90 days, others it was 72 days and overall it will about 80-82 days.

Escalating price of sand – The company is using alternatives.