Dr. Ramesh Chandra Mansukhani, Chairman, Man Industries India Ltd, talks about the existing and upcoming order books, his expectations from Nal Se Jal Mission, CapEx and promoter pledge among others during a candid chat with Swati Khandelwal, Zee Business. 

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Q: We have seen a steady demand for oil. Tell us about your total order book and orders from Oil & Gas space?

A: First of all, we are not a real estate company, we are a pipe manufacturing company that is used in oil and gas infrastructure, so there is a slight correction in it. We have a different real estate company and it is an independent company. In regard to our pipe that is used in oil and gas then the oil and gas sector is doing well and our pipes are used in city gas distribution as well. Our pipes are also used in the hydrocarbon sector that is associated with infrastructure. Our orderbook stands at around Rs 1,500 crore that will be completed in the next six months. In addition to it, we have also placed bids for another Rs 10,000-11,000 crore, which means the coming future is also good for us and our company is positioned well. 

Q: Out of the total order book how much will be executed in the current FY22 and what increase can be seen in the order book in the next two to three years? Also, tell us about the space that is looking most promising at present?

A: As of today, we have an order book of Rs 1,500 crore and it will be executed by March 2021. As far as post-March order is concerned, we are bidding for it and few orders have started coming in and it will continue to come. We have started creating our order book for next year and we have a comfortable order book for this year. I feel we will have a reasonable growth of 8-10% in the topline, our bottom line was good last year and stood around Rs 102 crore last year, accordingly it will continue to be good this year as well. EBITDA margin will also stand around 11%. Our new plant, ERW Plant, is coming up for API grade pipe that will be used in the city gas. The plant is under construction and its production will start by the next financial year. Its revenue will come separately and there will be a reasonable growth in its revenue, which means an additional growth will be seen in it. 

Q: What kind of orders you are expecting from the Nal Se Jal Mission and what kind of participation you will have in it? Can you name the states that are looking aggressive towards it?

A: It is so that work is going on in oil and gas. Around 80% of our company’s focus is on oil and gas and from 10-20% of our focus remains on water pipes. The new scheme of the government, which has started has not gained pace yet but will gain a pace soon. So, a very big work related to it is about to come after the COVID, as COVID has spoiled around a year to one-and-a-half-year. However, the year has been quite comfortable for our company as exports were high last year and we made exports of Rs 1,700 crore last year, while domestic is more this year. Going forward, the budget allocation for the water suggest that a huge work is about to come in the segment. 

Q: Is there any estimate like how big the order can be for you and what can be its timelines?

A: Still, the orders are coming and we have a lot of orders in oil and gas. We are also getting orders in water from the state government and central government projects are also coming. In the coming time, the process will continue for the next 8-10 years because the government has a special focus on infrastructure. So, a lot of infrastructures is coming up in the oil and gas sector, as the government has plans to increase the existing pipeline of around 15,00-16,000 kilometres to 32,000 kilometres in the next 5-7 years. Similarly, we have just started in the water, so its pace is likely to increase further and as the government will continue to increase its budget allocation for the purpose, the work related to infrastructure will continue to increase. So, both of our segments are connected with infrastructure and a lot of work is to be done in both of them in the coming time.

Q: The company has planned a CapEx of Rs 160 crore. Tell us more about it and is it limited just to the expansion that you have talked about earlier or there is something else? By when it will come on stream?

A: The CapEx for ERW is Rs 160 crore, which is going on. The rest of the upgradation work are small things, which continue but as of today we are an almost zero debt company, there is a very minimal debt, which is negligible. As we are a zero-debt company and invest in expansion works. So, whatever the company earns is deployed back to the new business and upgradation of the project. That’s why, the company’s future is good and the order book is good order and wherever there is a need for any value-added products, we are increasing our work there. 

Q: There has been a surge in metal prices leading to an increase in input cost. Has it had any impact on the long-term contracts? Also, the promoter pledge has been reduced from 41.4% to 10.82%, Can we expect further reduction?

A: It is time being pledged to the bank because new projects are coming and we have not placed any corporate guarantee due to which they have kept promoters pledge for time being, maybe for two to six months after which the shares will be released. We have not pledged our shares privately anywhere and we do not have any borrowing, so for satisfaction, the State Bank of India has kept it with itself. As I have said that as the projects are completed all shares will be released.