ET NowIn an interview with ET Now, Hemant Kanoria, CMD, SREI Infrastructure Finance Ltd, talks about their results and shares his business outlook. Excerpts:
ET Now: Taking us through your result highlights, tell us what led to the profit growth despite the lower top line -- both on the QoQ and YoY basis?
Hemant Kanoria: The infrastructure sector, with the new government coming in last year, has seen a lot of hope. The government is taking actions, but it does take time for the infrastructure sector to bounce back. Therefore, we have still not seen those signs of dramatic improvement, whether in the power sector or in the road sector. A lot of things are being done, action is being taken. So we hope that things will start improving from this particular financial year.
Last year, there was stress all across infrastructure space – from construction companies, contractors, and infrastructure players to bankers also -- and there has not been much of relaxation in the interest rates also because although the RBI reduced rates this year, but the pass through by banks has still not taken place fully.
If we actually look at our company, we have had a substantial increase in the profit. Last year it was Rs 50 odd crore, and this year it has gone up to Rs 90 crore. But in the equipment financing profits have come down because of the construction companies still facing the stress. But our PAT has remained the same. We had recorded Rs 130 crore of PAT last year, and this year it is about Rs 129 crore. So more or less it has remained the same.
ET Now: What is the update on the Viom listing or the stake sale? Can you give us fresh updates there?
Hemant Kanoria: I can only say that it is still a work in progress because there are certain options that we have been evaluating both from the perspective of some strategic sale and also from the IPO perspective, and we have not closed on any of them and both options are on. Therefore, as the market recovers, there will be renewed interest in the infrastructure space, especially in the telecom sector.
ET Now: You have been assessing these options for quite a while. Last time you said things were at an advanced stage. By when can we expect a decision?
Hemant Kanoria: Yes, we could have closed on something, but as I said, it is not only evaluation but there has been advanced discussion, etc, which is taking place. To be very frank, in the infrastructure space, it is still very difficult to say with certainty that this is exactly what we are going to do because it does take time. Infrastructure is not something where you can take decision very quickly. I hope we could have done that.
ET Now: Taking us through your result highlights, tell us what led to the profit growth despite the lower top line -- both on the QoQ and YoY basis?
Hemant Kanoria: The infrastructure sector, with the new government coming in last year, has seen a lot of hope. The government is taking actions, but it does take time for the infrastructure sector to bounce back. Therefore, we have still not seen those signs of dramatic improvement, whether in the power sector or in the road sector. A lot of things are being done, action is being taken. So we hope that things will start improving from this particular financial year.
Last year, there was stress all across infrastructure space – from construction companies, contractors, and infrastructure players to bankers also -- and there has not been much of relaxation in the interest rates also because although the RBI reduced rates this year, but the pass through by banks has still not taken place fully.
If we actually look at our company, we have had a substantial increase in the profit. Last year it was Rs 50 odd crore, and this year it has gone up to Rs 90 crore. But in the equipment financing profits have come down because of the construction companies still facing the stress. But our PAT has remained the same. We had recorded Rs 130 crore of PAT last year, and this year it is about Rs 129 crore. So more or less it has remained the same.
ET Now: What is the update on the Viom listing or the stake sale? Can you give us fresh updates there?
Hemant Kanoria: I can only say that it is still a work in progress because there are certain options that we have been evaluating both from the perspective of some strategic sale and also from the IPO perspective, and we have not closed on any of them and both options are on. Therefore, as the market recovers, there will be renewed interest in the infrastructure space, especially in the telecom sector.
ET Now: You have been assessing these options for quite a while. Last time you said things were at an advanced stage. By when can we expect a decision?
Hemant Kanoria: Yes, we could have closed on something, but as I said, it is not only evaluation but there has been advanced discussion, etc, which is taking place. To be very frank, in the infrastructure space, it is still very difficult to say with certainty that this is exactly what we are going to do because it does take time. Infrastructure is not something where you can take decision very quickly. I hope we could have done that.
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