The country's top elevator and escalator company Johnson Lifts is eyeing a 12 per cent growth in the current fiscal year on high government orders.
The business in the government sector is primarily driven by projects in railways, metro stations, smart cities and airports and comprises the bulk of the current order book of the company which currently stands at around Rs 2,600 crore.
Till 2016-17, the government sector accounted for only 10 per cent of the company’s consolidated earnings which rose to contribute 30 per cent in the ongoing fiscal year and it expects revenues from government projects to scale up further to 40 per cent in another 2-3 years.
“After the implementation of GST, RERA, demonetisation and other policies, the real estate sector had been sluggish which affected our orders. But at the same time, the government scaled up its infrastructural spending and there was a surge on that front. What we lost in real estate segment, the government orders made up for it and even exceeded at times”, Albert Dhiraviyam, country head – marketing at Johnson Lifts & Escalators told Business Standard.
Currently, with a focus on government sector, it is implementing installation of 1000 escalators and 800 lifts in the railways and is also installing 225 escalators and 250 lifts across the 27 airports in the country. Across various metro stations in Mumbai, Chennai, Kolkata and Bangalore, the company is installing around 669 escalators and another 250 lifts.
“We are actively participating in government tenders and the company growth will be majorly led by this business vertical”, he told this newspaper.
According to Dhiraviyam, while railways currently comprise 25 per cent of its total business from the government sector, its contribution will double in the next 2-3 years. Currently, metro railway projects account for the bulk of the government orders at 60 per cent.
“The railways have decided to implement escalators and lifts across major stations in a phased manner which is driving growth in our business. There is also huge opportunity in the metro station projects as well”, he told this business daily.
Apart from these sectors in the government, the company is also eyeing opportunities in public education and healthcare as well.
Anticipating high demand in the near term, Johnson has come up with a new integrated factory near Chennai at an investment of Rs 125 crore, which has an installed capacity to produce 6,000 lifts per annum and another 1,200 escalators in a year. The total installed capacity of the company, including its other plants in Chennai and Nagpur stands at 16,000 elevators.