Man Industries has an order book of Rs 2,000 crore: Dr. R C Mansukhani, Chairman

Dr. R C Mansukhani, Chairman, Man Industries (India) Limited, talks about the second phase of corona, import and export market, order book, expected order inflow in FY22, impact of raw material prices on the business among others during a candid chat with Swati Khandelwal, Zee Business.

Q: India has been hit by the second wave of CORONA. So, let us know about the impact that it has made on the business and are you seeing migration from the point of view of your labours? Also, update us about the overall ground situation?

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A: The second wave of Corona is continuing. We have our units in Gujarat and Madhya Pradesh. Madhya Pradesh is more impacted and Gujarat is less impacted. The production has suffered a bit near Indore in Madhya Pradesh. Today, we have an order book of around Rs 2,000 crore. The government has a major focus on infrastructure, thus it will not have any major impact on the operations of our company because projects and raw materials are available with us and production is going well so far. There have been some cases of COVID and we are engaged in improving it and take preventive actions to fix it. Complete company is trying to make sure that minimum people are infected so that it does not affect the production. 

Q: You said that you have an order book of around Rs 2,000 crore. Tell us about the new order worth Rs 766 crore that you have won? And also let us know about its execution timelines and what margins are expected from this project?

A: We have received a new order worth Rs 766 crore recently. Normally, our industry has an EBITDA of around 11-12% and it depends on the grade of pipes, what is the coating and the value addition. We have posted a growth of 25% in FY21 and our turnover will be around Rs 2,150-2,200 crore and accounts are being finalised. Our growth momentum will continue to grow even next year based on the order book that we have. We have orders worth Rs 2,000 crore at the very start of the year and have placed bids for orders worth around Rs 10,000 in both, international and domestic markets. I expect that we will get some orders from it. So, we are confident and hope that we will grow this year (FY21), as well. 

Q: Give us an idea about the order inflow that is expected in FY22 and what can be the minimum order addition in the book and what can be the geographies and projects?

A: Our business is based on a strategy in which half is exported and half is made for domestic purposes. Last year, we had export orders of around Rs 1,500 crore and domestic orders stood at around Rs 700 crore. This year, we have domestic orders worth Rs 1,400 crore and export order stands around Rs 700 crore. We have also placed bids for around Rs 10,000 crore in domestic and it is present in the domestic oil and gas sector (mostly) as well as international market. Last year, we had orders of around Rs 2,100-2,200 crore and we are confident that there can be a growth of around 15-20% this year considering the inflow of the orders and the pressure from the government in which it is asking to complete the project on time. The government has plans to invest around Rs 3.50 lakh crore to complete the gas infrastructure in the next 4-5 years. So, companies engaged in manufacturing the gas pipelines will continue to get work on a regular basis. Today, the oil prices have stabilized in the global market at around $60-65 per barrel due to which the projects that were stalled in the last 1-2 years have started coming. So, we will continue to grow well in the field with which we are associated with. 

Q: Raw material prices have gone up a lot in the past few days and there is a huge jump in commodity prices. What impact it will have on your business, particularly on margins?

A: Our business is based on project-to-project and we have back-to-back tie-ups with the producers. You can consider that there is a tie-up in 80-90% and 5-10% is common. In most cases, we are in the position of pass through. Commodity prices have increased mainly in the last one-two months and we are examining the minimum impact it can have on our business and what can be passed on. So, we are preparing a strategy for the same and things are being discussed. In regard to growth, our overall profitability will stay good for us.