McNally looks at cement, infra as power orders trip

McNally Bharat Engineering Co Ltd, the Deepak Khaitan-controlled outfit, is looking at new sectors such as cement and infrastructure as it sees orders from power sector drying up.

The construction and engineering company’s order book as on October-end is healthy though at Rs3,900 crore and includes orders worth Rs480 crore where it has emerged the lowest bidder, director and chief financial officer Probir Ghosh told DNA.

“We expect to break through in the first order in the cement sector where we had earlier bid for an EPC contract,” Ghosh said, without divulging the likely size of the order.

Industrial infrastructure projects like over-bridges or even metro railways network, which is being built in many cities, are other sectors that McNally is targeting now, though major deal wins are yet to come.

McNally’s current order book is well diversified, coming from sectors such as oil and gas, steel, ports, mining and power, he said.

“The company expects to continue with a sizeable presence in the steel sector modernisation projects of SAIL, port expansion projects of National Maritime Development Programme and capacity addition in non-ferrous metal sector,” a McNally release said.

The company is at different stages of discussion with private power plants or their requirement of BoP (balance of plant) and process plants, it said.

The power sector, which contributed to about 30% of its current order book, is however showing distinct signs of slowdown, Ghosh said, prompting the company to increasingly look at other sectors as well.

McNally recently won the BoP order for Satpura Thermal Power station’s 500 mw project to be commissioned next year.
Ghosh is also not bullish about order flows from Coal India in the near future for coal washeries, asector where McNally has expertise.

To tide of continued shortage of contract labourers, McNally plans increased mechanisation of construction activities and would invest Rs12 crore to expand its equipment bank.

“McNally expects to register a combined (including McNally Sayaji and coal and mineral business of KHD Humboldt) topline of `2,700 crore in fiscal 2012 and expects to maintain a consolidated Ebidta at a level of 8-9%,” the release said.