Kalpataru-JMC Merger Helped Create 'Strongest Balance Sheet' In EPC Space, Says Director
After the merger, the civil and water divisions of JMC Projects have gone abroad and won projects.
Kalpataru Power Transmission Ltd.'s merger with JMC Projects (India) Ltd. to form Kalpataru Projects International Ltd. has helped create "the strongest balance sheet" in the engineering, procurement and construction space, according to Director Amit Uplenchwar.
JMC was constrained by its balance sheet as its interest cost was higher by 100 basis points, and could not go abroad to participate in tenders for large projects, Uplenchwar told NDTV Profit. However, after the merger, the civil and water divisions have gone abroad and won projects, he said.
"We are doing a large EPC airport in Maldives, where we are doing both the aero and non-aero revenues. We are building a jetty there. We are doing data centers. We are entering new segments in the urban infra segment, that includes underground tunneling metro, which are highly complex projects and require large capex," he said.
The company's core sectors have been transmission—both for lines and substations. It has also been growing steadily in water segment, railways, oil and gas, urban infrastructure, and buildings and factories.
"In water, we are present across irrigation networks, desalination plants and STPs, with order book in excess of Rs 12,000-14,000 crore, providing good revenue visibility," he said.
The company is also setting up new manufacturing lines, which support each of these sectors in the form of steel, girders and fabrication, etc., according to Uplenchwar.
In the oil and gas sector, the company has been working for the last six to seven years, trying to qualify for major projects in the segment outside India, he said. "That has begun to bear fruit now... We have qualified in seven to eight large geographies as an EPC contractor for quite a few segments."
Financials
The company hopes to achieve its 25% revenue growth guidance in FY24 and achieve 4.5% of the revenue as profit before tax.
The order book position was at Rs 50,000 crore at the beginning of the year and the company is expected to add Rs 25,000 crore of additional orders during the year.
"The order book gives us the revenue visibility for the next two years and also allows us to focus on higher margin projects, since we don’t have to worry about order," Uplenchwar said.
Watch the full interview here:
