We see strong double-digit topline growth in FY23: Tata Projects MD

Vinayak Pai, who took over as the top man in the firm this July, dwells on the existing and prospective projects, and the future roadmap of the company

Vinayak Pai's assumption as the managing director of Tata Projects in July this year comes at a time when the company has been picking up crucial projects across the country. An infrastructure and engineering veteran, Pai is engaged in transitioning Tata Projects to its next level of growth. This involves strengthening its execution abilities and expanding its footprint into international markets. In an interaction with Viveat Susan Pinto, Pai, 54, spells out Tata Projects’ future roadmap. Edited Excerpts:

1) What is the status of three of the most high-profile projects that you have--the Parliament Building in Delhi, the Trans Harbour Sea Link in Mumbai and Noida airport?

We have indicated that the Trans Harbour Sea Link is on track to be completed in 2023. The Noida airport, of course, is a project that we were recently awarded. It has started off well. We have set up our team in Noida. The construction work has also begun. We have our weekly review meetings with the client. It is going well. We cannot comment on the Parliament Building, since it is a sensitive project.

2) What kind of top line growth do you expect to see in FY23? While you closed FY22 with a turnover of nearly Rs 14,000 crore, your bottomline was in the red. Do you hope to rectify this in FY23?

We have posted our first-half results for the current financial year, which should give an indication of where we are headed. We have posted a top line of over Rs 7,500 crore. When compared with the first half last year, it is a 20-25 per cent growth in top line. The second half of the current financial year also looks strong because this business typically does not have the monsoon effect in Q3 and Q4. We expect strong double-digit top line growth for the full year of FY23.

As for the bottomline, we have posted a loss in the first half of the current financial year due to some issues with legacy projects in our portfolio. However, from a quarterly performance perspective, we did stabilise in Q2 with a nominal profit. We see that growing in Q3 and Q4.

3) Will you continue to be focused on domestic projects or do you intend to expand your footprint further internationally, given that you are present in select markets overseas?

We are present in the Middle East, mainly the UAE, and in Africa. We are also present in a few Asian countries such as Bangladesh and Thailand. Having said that, we will look at more geographies by calendar year 2024 or 2025. We are currently undertaking a transformation exercise to strengthen our digitally-enabled project delivery capabilities. When that happens, we will see many more opportunities open up globally for us. The international business currently contributes 10-15 per cent to our overall revenue. This number will grow as we expand internationally into more markets.

4) What does your order book look like currently?

We reported an order book of over Rs 50,000 crore in FY22. It remains in that range this year as well. The sectors that have contributed to this order book include refineries, metals and mining, factories, power, mobility including metro stations and airports. There are also a lot of opportunities emerging in the private sector in providing sustainability-related solutions.

5) Project delays have been a huge concern for EPC companies. Tata Projects has had to deal with termination notices from the Dedicated Freight Corridor Corporation of India (DFCCIL), for instance, which was subsequently resolved. What are clients telling you?

Customers want us to work with them to strengthen the project delivery roadmap. Yes, the sector is plagued by project delays. But the question is: How do we plan better? How do we resource better to strengthen the delivery pipeline? As far as we are concerned, we are working on projects that have predictable work fronts available to us over a period of time. We are also ensuring that we do advanced planning to make our front-end designs more robust. We are also ensuring that there is advanced project management in place to reduce delays. These are some of the areas that we are working on to improve the predictability aspect of projects.

6) Tata Projects took part in pre-bid meetings on the redevelopment of the Chhatrapati Shivaji Maharaj Terminus in Mumbai, the Ahmedabad and New Delhi railway stations. What is the update here?

These are iconic projects and we would be interested in them. At the same time, we have to look at the contract mechanism and the risks involved. We will then take a call on which tenders to participate in. It should take us a month to decide on which tenders we should be involved in.