NBCC eyes order book growth of 30%, says Anoop Kumar Mittal

Anoop Kumar Mittal, chairman and managing director of NBCC, believes the order book of the public sector undertaking (PSU) will grow nearly 30% by end of this fiscal. In an interview with Swati Khandelwal Jain of Zee Business, Mittal said redevelopment model, digitisation and transparency will help the firm in achieving its Vision 2020.

NBCC's order book has grown substantially. What contributed to it?

I was appointed as the chairman of the firm in 2013 and prior to that, I was serving it as the director (projects) since 2011. This was a time when we decided about the direction in which the company should be taken and the opportunities that were present in the market. The prevalent conditions post-2010-11 made us feel that the budget decided by the government was not enough to support us. This was something that made us work on redevelopment model, under which the construction cost is generated from the place itself just by monetising a part of the property. We reworked on the model and demonstrated it in front of the government, where it was given a thumbs up. In fact, we completed the first project under the plan in an area of 100 acre without asking for any cost from the government. Leela Hotel was developed by the same money. Currently, we are using the same model for Kidwai Nagar. Redevelopment model, which was brought by us in the country, is something that has helped us grow. In fact, it forms more than 60% of our order book. We also worked on digitisation, transparency and system, as the construction industry is one of the most unorganised places. However, it is maturing and developing a system under which everything goes in a right direction. The market has responded in a positive way to us after looking at our growth structure, size of the order book and history of implementation of projects.

Does your Vision 2020 look achievable?

The redevelopment plan is something that is fueling optimism. In fact, in past two-three years, the plan has helped us in branding and positioning ourselves as a firm that delivers a quality project. This has helped us get several budgetary projects. Secondly, the government's faith in our endeavours is important. Currently, we are getting projects from both the sides, i.e, project management with budgetary support as well as self-revenue projects.

But the stock price has almost halved in the past few months despite the company performing well.

The company never works by keeping its eyes on the stock prices but it has an eye on the growth and the level where it can be taken in the next five to ten years. Yes, stock prices are a matter of concern. One of the things that contributed to the problem is related to the redevelopment programme of seven colonies in Delhi, of which three are being redeveloped by NBCC, where people have raised their objections related to falling off trees at NGT (National Green Tribunal). The court has never said that it is a wrong step but said how it can be rectified. On one hand, we should protect the environment and on the second, there is a need for development. It is a city of two billion population and planning and development are the only solutions to it. I feel the court's decision will be based on the same and the market has reacted in the same way. But one must not come to a conclusion on the valuation of a company like NBCC, that too in such a short period. The market cap went up to 25,000 in such a short period of time. But it happened just because the market felt the company is here to grow, it has an order book. On the execution part, the market was expecting a growth of up to 50% but our order book saw a sudden growth of six times. But there are certain big projects where the DPRs (detailed project planning) and approvals are delayed, and on occasions, certain unplanned problems like the issue related to NGT prop up but these litigations will come to an end with a solution. The best part of a big order book is that if four projects are stalled for a period of six months, then you have the other set of the order book for completion. This is why I can still say that we will witness a growth of 30% in the ongoing financial year and it will continue to grow by 30-40% in the times to come. All these problems will come to an end in the next one-two months, and thus, it is a matter of concern for a short time period.

Do you think your order book will increase in the recent future?

Today, we have an order book of Rs 80,000 crore and we will be getting an additional order of Rs 20,000 crore this year. So, they will be working as an add-on to the existing ones. By March 31, 2019, we may have an order book of Rs 90,000 crore to Rs 1 lakh crore.

There is an interesting play related to your work on heritage sites of the country. Can you let us know about its outlook and what you will earn from it in terms of revenue and margins?

See, we didn't have our eyes on revenues and margins while starting the work on the project. In fact, we took on the project as a responsible PSU (public sector undertaking) and I had my personal interest in the decision. We appreciate the heritage sites of other countries during our visits but hardly pay any attention to our heritage properties. I took on the project as a citizen and a responsible company, and we will be doing the work under CSR (corporate social responsibility) and also from the side of the government. In fact, the government, the ASI (Archaeological Survey of India) and the Ministry of Culture have opted NBCC for completing the project. Currently, we have the projects related to Purana Quila, Red Fort, Qutub Minar, among others, in Delhi itself. To be true, we are not losing anything from this but will have a profit from it, which may not be not so high when seen percentage wise.