NBCC has emerged as the country’s construction juggernaut: CMD Mittal

Having built a formidable reputation in the domestic market, state-owned blue-chip Navratna enterprise NBCC (India) Limited is set to explore and capture new geographies particularly the international market in the year 2018. In an exclusive interview, Dr Anoop Kumar Mittal, CMD of NBCC, told Realty & More that they will be aggressively pursuing overseas expansion to pursue company’s vision of being a world-class construction company. Acknowledging that the real estate has not been conducive and the company had slowed down its operations in the sector, Dr Mittal was confident that with the Government-promised reforms and policies it will stabilise soon and NBCC will work full throttle in this segment in the coming times.

Realty & More: How has the year 2017 been for NBCC?

Anoop Mittal: The past year has seen the company achieve enviable heights; whether it was overseas business expansion, diversifying into new areas of operation, earning high-stake projects, better financial performance, and greater investor interest. The company has emerged as India’s construction juggernaut on the back of its quality execution capability and technical capacity, supplemented by a strong sense of commitment and adherence to timelines.

Some of the standout developments have been completion of Trade Facilitation Centre and Crafts Museum at Varanasi, Dr. BR Ambedkar International Centre, both of which were inaugurated by the PM; new HQs building of the Bureau of Police Research and Development, inaugurated by the Home Minister; acquisition of HSCL; developing the first and only WTC in Delhi; re-designing the landmark site of ITPO-Pragati Maidan; smart development of railway stations across India and adoption and rejuvenation of Purana Quila; to name a few.

The company’s graph has been growing consistently with 21 per cent CAGR and Order Book reached an all-time high of Rs 85,000 crore.

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R&M: What targets have you set for NBCC for the calendar year 2018?

AM: I think it’s not presumptuous to say that we have built a formidable reputation in the domestic market; considering our asset-light PMC segment, strong balance sheet and abounding projects in the pipeline.

This year, our next step is to explore and capture new geographies particularly the international market. We will be aggressively pursuing overseas expansion to pursue company’s vision to be world-class construction company and we have already taken substantial steps towards this goal. We have already started succeeding in our endeavour and are constructing some prestigious projects such as National Prison Academy in Maldives, Supreme Court building and 956 units of social housing in Mauritius.

Also, at domestic front, we are perfectly positioned to expand beyond our traditional scope of businesses, identify new revenue streams and enter new markets. Having pioneered redevelopment projects, it will continue to be a priority area. We are confident to gain hugely in this segment, thereby multiplying NBCC’s overall margins and success rate. Further, being a niche and reliable player in the industry, the company would benefit from the Government’s focus on Housing for All, AMRUT and Smart Cities etc.

We have set ourselves a target to achieve 30–35 per cent CAGR from the next financial year onwards, which shall be mirrored in our efforts.  We have also set sight for the next five years in the form of a Vision Document, which will detail the strategic objectives, outcomes and key performance indicators, the company shall attain by the Year 2022.

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R&M: What kind of topline and bottomline growth are you expecting in the year 2017-18? Will you be able to meet your targets for the financial year?

AM: The company is poised to grow with a CAGR of 30-35 per cent in the current financial year. Since our business outlook has been positive all year long, I am sure that we will be able to deliver above our targets and end the financial year on a new high.

R&M: What is the order-book position now?

AM: Currently we are implementing orders to the tune of Rs 85,000 crore. By the end of March, 2018, the order book of the company is expected to cross over Rs. 1 lakh crore.

R&M: Which vertical is growing the fastest and what is the rate of growth?

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AM: The PMC segment is our core business segment contributing to almost 85 per cent-90 per cent of the company’s revenue. The company’s PMC business segment includes management and consultancy services for a range of civil construction projects including residential and commercial complexes, re-development of colonies, hospitals, educational institutions, border fencing as well as infrastructure projects such as roads, etc.

We are getting lot of high-value orders under PMC as well as under redevelopment vertical. That apart, future prospect in this segment is also very high considering the fact that NBCC is in talk with various clients and they are very keen to engage the company for redevelopment of their properties.

So, very optimistically I can say that PMC segment is evolving rapidly and will continue to garner us more projects in this year.

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R&M: How has been the performance of the real estate division in 2017 and what kind of revenue growth is expected from the RE sector?

AM: NBCC has a huge land bank with it but since the RE sector has not been conducive, the company had slowed down its operations in the sector. Additionally, real estate is a tertiary segment for us and forms approx. 7 per cent of the company’s revenue. However, with the Government-promised reforms and policies, the sector is soon to stabilise in the coming times and we hope to work full throttle in the real estate segment.

R&M: Any new initiatives planned for 2018?

AM: Apart from new business acquisition I have already spoken of, the company’s thrust will be on technology and cutting-edge solutions to meet the increasing infra demand efficiently. We shall endeavour to scope out newest technologies, embed sustainable solutions and utilise modern tools and equipment to create cost-effective, premier quality and environment-friendly infrastructures.

Some of the existing technologies we are putting to use include steel structures, modular construction, pre-cast pre-fab components and light weight concrete slabs etc. Past year, we also collaborated with a Finland company to manufacture electric vehicle (EV) charging stations, anticipating the move towards EVs in the coming years.

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Strategic adoption and implementation of technology in our projects will play a key role to boost productivity and improve quality.

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