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New Delhi-based IRCON International — an engineering and construction company — is looking to maintain its margin and won’t bid aggressively for orders, its Chairman and Managing Director, Yogesh Kumar Misra, said in an interaction with CNBC-TV18. The company needs some time to develop its execution capabilities before venturing into new projects in other areas, he said.
IRCON, which has moved into new segments such as high speed rail and solar projects, is aflush with existing orders.
It won orders to the tune of Rs 15,000 crore last year, and has doubled its order book from Rs 22,000 crore to Rs 44,000 crore over a period of five years.
“That is why our first six months of this year were muted in terms of order inflow. We are now looking at sizeable business opportunities, which are coming up both in the railway and highway sectors,” Misra said.
The company is looking at securing orders worth Rs 5,000-6,000 crore in the next six months. “We have about 50 percent projects which are bid-out in the competitive bidding and 50 percent via nomination,” Misra said.
IRCON International is also bidding for consultancy contract, which typically have a much higher margin of 15-20 percent.
The company has managed strong revenue as well as margin despite rains, the festival season and volatility in commodity prices, and its management is confident of maintaining the margin at seven percent in the coming quarters.
"The revenue target that we have given, of around Rs 9,500-10,000 crore, is what we expect to achieve during the entire year,” he said.
IRCON shares have rewarded investors with a return of 35.48 percent in the past one month — a period in which the Nifty50
benchmark has risen about five percent.
For the full interview, watch the accompanying video