Order inflows to India Inc continue to be robust

Crosses Rs 14,000 crore in three weeks of 2012

After a strong quarter on quarter (Q/Q) orders inflow in the October-December 2011 quarter, India Inc is expecting to repeat it in the first quarter of the current year. In the first 20 days of the current year, the order flow has been strong, worth Rs 14,000 crore, almost one third of orders received in the fourth quarter of 2011. Orders are flowing to infrastructure companies from power projects, state government for water projects and for construction of building from private companies. 

The order flow data indicated some sign of revival in Capex plan as the public sector mineral and metal company, NMDC has signed a contract for a by-product plant package for the upcoming three million tones integrated steel plant at Nagarnar for a total cost of Rs 509 crore. NTPC is planning to take up another mega project in South, a 4,000 MW plant at Pudimadaka close to Visakhapatnam. 

 

Ramesh Chandak, managing director of KEC International said, “Next year also orders from projects that are in pipeline will continue to come but time will be difficult from the point of view of new orders flow from green field projects as there are some delays in Capex plans of companies,” he added. 

Orders inflow from Power Grid has increased by 108% to Rs 11,240 crore in the first nine months of the current financial year and more inflow is possible in the current quarter. According to analyst at First Global Research, Power Grid awarded 50-70% of the total orders in Q4, given that Power Grid will most likely award another Rs 10,000-12,000 crore worth of orders in this quarter. 

IVRCL has taken lead in order flow list, and has received seven orders worth Rs 1,540 crore. Orders are for construction of water plant and also for construction of building and road. Balram Reddy, director finance, IVRCL said, “the central bank has signaled reversal in policy by cutting reserve ratio. This will reduce interest cost eventually and infrastructure sector will be looking forward for better order flows also.” However, he raised concern that so far as government orders are concerned there are delays in processes like designs approvals and getting other clearances. 

KEC International has put up a goods show by getting three orders worth Rs 1,964 from domestic and overseas clients. The company has received orders worth Rs 1,253 crore from Saudi Arabia, US and Afghanistan for various segments like transmission, power, water, cables and telecom. KEC International’s MD Ramesh Chandak said, “Order flow in last quarter of a financial year usually are higher as government utilities have to utilize allocations and see that orders are placed and hence for next two months also orders flow will be higher.