ABG Shipyard chief financial officer, D Datar, tells CNBC-TV18 that the order from Shipping Corporation of India is a very valuable order and that they are very happy to add them as a client. "The order is for six ships, which are 82 tonne handlers, and each is for USD 17 million," he said, Moneycontrol reports.
SCI's current order book is Rs 16,000 crore and unexecuted orders are worth Rs 10,000 crore as of now.
"This order will fetch us 24-25% margins, which is what we operate at," said Datar.
Below is an edited transcript of his interview with Latha Venkatesh and Ekta Batra. Also watch the accompanying video.
Q: Can you tell us exactly what makes this order important and what does it mean monetarily to you?
A: What is important that our sectoral call, that we focus on oil and gas related asset like rigs and offshore supply ships, has gone hugely correct. All these asset prices have seen lot of upswing going forward; rig prices have improved drastically in terms of day rates and in terms of asset prices. Ofcourse Shipping Corporation is an important client as far as domestic shipping lines are concerned and we are happy to add them as our client.
As an order, this is a very valuable order because these orders are at some USD 17 million each ship. So if you compare the prices of say three years back and the current prices of these ships we have got the price almost correct and almost at the market price.
Q: We were given to understand that it's an USD 101 million order. So is it couple of ships that you will have to manufacture?
A: These are six ships, which are 82 tonne anchor handlers. We are the second largest ship builder in the world for these assets, so that makes it important and special for us.
Q: To focus on order book, we understand that in Q2 FY12 there was some amount of problems in terms of bagging new orders. Has that momentum changed now for you all and how much have you bagged in terms of total order inflows?
A: We have been bagging order almost every quarter or every six months. Last we announced that we got an order from Indian Navy for two Cadet Training Ship which was about six months back and that is a Rs 1000 crore order.
Now we have announced this Rs 500 crore order from SCI. Before that we had announced a large order from a company called Halul Offshore which was a diving support ship, the largest ever diving support ship that the world has seen and that ship is getting delivered in the next three months. So we have been consistently adding orders to our order book.
Q: What does your total order book currently stand at and how much are you executing?
A: We have total order book of Rs 16,000 crore plus and the unexecuted order book is something like Rs 10,000 crore. So I have a large pipeline of orders worth Rs 10,000 crore to go for the next three years.
Q: Will this order fetch you those 24-25% margins that you have been operating at?
A: Yes we have been very consistent on margins and we generally take business within those margins. So I am quite confident that this business also fetches the same kind of margins.
SCI's current order book is Rs 16,000 crore and unexecuted orders are worth Rs 10,000 crore as of now.
"This order will fetch us 24-25% margins, which is what we operate at," said Datar.
Below is an edited transcript of his interview with Latha Venkatesh and Ekta Batra. Also watch the accompanying video.
Q: Can you tell us exactly what makes this order important and what does it mean monetarily to you?
A: What is important that our sectoral call, that we focus on oil and gas related asset like rigs and offshore supply ships, has gone hugely correct. All these asset prices have seen lot of upswing going forward; rig prices have improved drastically in terms of day rates and in terms of asset prices. Ofcourse Shipping Corporation is an important client as far as domestic shipping lines are concerned and we are happy to add them as our client.
As an order, this is a very valuable order because these orders are at some USD 17 million each ship. So if you compare the prices of say three years back and the current prices of these ships we have got the price almost correct and almost at the market price.
Q: We were given to understand that it's an USD 101 million order. So is it couple of ships that you will have to manufacture?
A: These are six ships, which are 82 tonne anchor handlers. We are the second largest ship builder in the world for these assets, so that makes it important and special for us.
Q: To focus on order book, we understand that in Q2 FY12 there was some amount of problems in terms of bagging new orders. Has that momentum changed now for you all and how much have you bagged in terms of total order inflows?
A: We have been bagging order almost every quarter or every six months. Last we announced that we got an order from Indian Navy for two Cadet Training Ship which was about six months back and that is a Rs 1000 crore order.
Now we have announced this Rs 500 crore order from SCI. Before that we had announced a large order from a company called Halul Offshore which was a diving support ship, the largest ever diving support ship that the world has seen and that ship is getting delivered in the next three months. So we have been consistently adding orders to our order book.
Q: What does your total order book currently stand at and how much are you executing?
A: We have total order book of Rs 16,000 crore plus and the unexecuted order book is something like Rs 10,000 crore. So I have a large pipeline of orders worth Rs 10,000 crore to go for the next three years.
Q: Will this order fetch you those 24-25% margins that you have been operating at?
A: Yes we have been very consistent on margins and we generally take business within those margins. So I am quite confident that this business also fetches the same kind of margins.