Ramky Infrastructure eyes turnaround in next 18 months

HYDERABAD: City-based infra player Ramky Infrastructure Limited (Ramky Infra), which is saddled with a debt of around Rs 1,400 crore, expects a turnaround in the next 18 months, said a top official of the company.
Explaining the strategy , Ramky Group executive director Goutham Reddy said that at the home front, the company has set a target of monetising assets worth Rs 1,000 crore in the next two years and will be staying away from Build-Operate-Transfer (BOT) projects while abroad — especially Africa and Middle East — it will be scouting for new projects.
"Being optimistically cautious, cutting costs, scouting for international opportunities and trying to execute projects at a faster pace are some of the major actions we plan to take to ensure that the company becomes profitable in the next 18 months," Reddy said, adding that as part of cost-cutting measures, the company will not cut any jobs further.
He said over the last two years, the company has already pruned nearly 50% of its headcount and going ahead he does not expect any more job cuts as operation have 'stabilised'. Ramky Infra had 837 permanent employees on its rolls as of March 31, 2015, as compared to 1,199 employees as of March 31, 2014. Meanwhile, regarding the monetisation of its assets, the company's top official said that he expects a couple of definitive agreements to be signed by the end of this calendar year and these are expected to be largely road assets. "The investors are spoilt for choice right now but we are in discussions for various projects with various investors. I hope we will be able to seal a few deals by the end of 2015," he added.
However, he said most of the infra players were finding it an uphill task to find buyers for their assets. "Almost every road asset in the country is available for sale but in the last two years, the number of assets actually sold is very mi nuscule," he said. Apart from trying to hammer out deals with buyers for its existing assets, the company is also bidding for new projects in water, road and building sectors but in the engineering, procurement and construction (EPC) space.
"We are a little more cautious and are not focussing much on build-operate-transfer (BOT) projects, which used to be important earlier. For an EPC project, if there is a delay even by a year or two, the impact is expected to be less than 5-10% because there is protection for increased cement and steel prices, among others.But a similar delay in a BOT project can have a serious impact as all the cost overruns come onto the parent company . Also, the high interest rates and loss of revenues, make these projects unviable," he explained.