"Whole intention of entering the American market was to gradually build our EPC portfolio in that area. We are trying and we will start from the Latin America first before we come into the North American market and that is what we have targeted."
KEC International has secured new orders totaling to Rs 756 crore in its transmission, water, power systems and cable businesses.
These additional orders from new areas will also help the company maintain growth and order book portfolio, said Chandak. However, the company aims to focus both on Indian as well as international orders, and expects even the domestic order pipeline to improve going forward.
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Below is the verbatim transcript of his interview on CNBC-TV18
Q: Could you detail what exactly these orders comprise of, what are the margins which you could possibly work on?
A: We have received the orders of about Rs 756 crore but the biggest highlight of this order is that we have received our first Engineering, Procurement and Construction (EPC) contract order in Brazil, which is about Rs 44 crore but this is the beginning and this is the first EPC order which we have received in the American area. That is most important.
Other than that we have received orders of transmission line, which are worth Rs 324 crore in various international markets. We have received orders of about Rs 245 crore in the water that is in sewage treatment as well as the canal construction.
We have also received the sub-station order of Rs 102 crore for the gas insulated substation. In addition to that our normal orders of cable during the period about Rs 85 crore. So, the sum total is about Rs 756 crore orders, which is very good looking at the current markets situation.
Q: That point is taken but if you could first tell us about that Latin American order that you said is the biggest one out of this, what kind of margin profile will you enjoy and would you target this space for more orders in the future and what would be the pipeline?
A: Whole intention of entering the American market was to gradually build our EPC portfolio in that area. We are trying and we will start from the Latin America first before we come into the North America market and that is what we have targeted. I think the first order we got is from Brazil.
This order is about 230 kV transmission line and will be now bidding for more such contracts in that area and in the Latin American area. That will help us to grow because in the end today's market which is quite under pressure to maintain your growth or to maintain the portfolio, it is important that we have some additional order book from the new areas and this new area will definitely help us to maintain our sales growth.
Q: Is the company concentrating more on acquiring international orders at this point in time versus the domestic market?
A: No, there is no such thing. In India also we are focusing equally and strongly. Even the new tenders and transmission also likely to come, there are already some tenders which already put in bids, our equal focus is on both India as well as international. We are expecting that even the domestic orders will start coming.
Domestic orders always comes in a bunch; they come in one month and don't come in another and then again come. So that is the pattern, which we have in India.
KEC Intl stock price
On December 13, 2013, at 14:13 hrs KEC International was quoting at Rs 49.80, up Rs 0.15, or 0.30 percent. The 52-week high of the share was Rs 74.45 and the 52-week low was Rs 23.25.
The latest book value of the company is Rs 37.99 per share. At current value, the price-to-book value of the company was 1.31.
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