The share price of GMM Pfaudler gained after the company reported a sequential improvement in its Q2 earnings. The year-on-year (YoY) India revenues were up 19 percent and overseas revenues were up 13 times at Rs 467 crore versus Rs 35 crore. The quarter-on-quarter orderbook went up from Rs 1,713 crore to Rs 1,813 crore. The revenue jump was because of the acquisitions that came into the fold of the business. To discuss the numbers and the outlook, CNBC-TV18 caught up with Tarak Patel, Managing Director of GMM Pfaudler.
Throwing light on the order book position, Patel said, it is a record orderbook across all geographies, that is, India, Europe and the US markets. The orderbook gives them visibility not only for this financial year but into Q1 and Q2 of next year.
“The whole process of the China Plus One strategy here in India, plus even for the US and European markets, we are seeing investment coming back, and that is helping our order intake and orderbook,” said Patel.
He further said, the chemical and the pharmaceutical markets across the board are driving the orderbook growth.
"We are seeing investment coming back into the US and European shores, which for the last maybe 18 months or so, had been a bit quiet," he said.
Heavy engineering business is aiding growth. The newly-acquired facility in Ahmedabad and growth from that industry segment is growing quickly.
"So, along with the chemical and pharmaceutical business, we are also seeing a good amount of orders coming in from oil & gas and petrochemicals,” said Patel.
“Right now, the orderbook is Rs 800 crore, and we had guided towards Rs 2,400 crore of revenue for this financial year. We are already halfway there; we have done Rs 1,200 crore. So, about Rs 600 crore of additional orderbook will take us into the next financial year,” he explained.
On margin pressure, Patel said input costs have increased but luckily GMM Pfaudler has been able to price that into their pricing as well as pass that on to the clients. So, there's not been too much of an issue in terms of margins. “We expect margins to remain around the same levels for the rest of the year,” he said.
For the full interview, watch the accompanying video