Tue Jan 30, 2007 3:19 PM IST
MUMBAI (Reuters) - Civil engineering firm Hindustan Dorr-Oliver Ltd. expects 40-50 percent rise in net profit for the year to March 2007 driven by large orders and a renewed focus on manufacturing, a senior official said.
For the quarter to December 2006, the company's net profit rose 9.3 percent to 31.7 million rupees, while revenues rose 34 percent to 549 million rupees.
"This year we have been able to concentrate on manufacturing where the turnover last year was only 290 million rupees," Executive Director S.C. Sekaran told Reuters.
"For the whole year we have set a target of 400 million rupees-plus. So the bottomline will improve as the margins in manufacturing will be better compared to EPC (engineering procurement construction) contracts."
"Our net margins will be higher because we have been able to finish some of the old projects," Sekaran said, adding it would be 8-9 percent compared to 5 percent last year.
Margins on manufacturing is in the 20-25 percent range while that from EPC is 10-15 percent. The company is adding capacity in Ahmedabad, where it produces a variety of process control equipment. About half the revenues come from beneficiation -- the various processes of extracting metal from ore -- and the company sees opportunity especially in the alumina industry.
In the last quarter, Hindustan Dorr-Oliver, with joint venture partner Chalieco Gami of China, received an order worth 2.05 billion rupees from Vedanta Alumina, part of Vedanta Resources PLC.
The company's order book at the end of the last quarter stood at 2.3 billion rupees, of which mineral beneficiation accounted for 1.5 billion rupees.
The company has also export orders worth 200 million rupees from the U.S. for pressure vessels and heat exchangers. "This is a big breakthrough for us," Sekaran said.
It expects a 100 percent growth in export orders in FY08, he said as the order from the U.S. would lead to more orders, especially from Europe.
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