National Buildings Construction Corporation (NBCC), set up under the Ministry of Urban Development, has come a long way since its formation. Despite the real estate sector facing huge inventory pileup, Anoop Kumar Mittal, CMD of NBCC in a conversation with Prashant Mukherjee of Sunday Express shares how he has managed to grow the corporation four-fold in the last couple of years.
Excerpts:
NBCC stock has increased more than three folds in the last one year. What are the reasons that stakeholders have been betting big on NBCC?
The basic reason is when the overall market is not doing well and one company is doing well, then definitely investors are attracted towards it. In NBCC, we have enormous potential, and that has not been used by the company and management earlier. Hence, in last 3-4 years, we have entirely changed our structure and put more emphasis on cleaning up our balance sheet. Our major shift was when we started taking redevelopment jobs on self revenue generation basis.
We started the redevelopment model in 2008 when the US sub-prime crisis took place and hence there was no competition in market in that segment. In Indian context, the government market is still considered as the safest bet. Our 80-85 per cent of the revenues come from project management consultation verticle of the business. All redevelopment projects also fall under this category. This is the area where we are receiving our maximum revenue and maximum growth.
Is going green the theme line for your project?
Our focus is to be environmental friendly. We have used solar panels to power street lights and use LED lights. We are also using smart automation system. At these projects, the entire water treatment facility is provided. Supply of water is uninterrupted. In fact, solid garbage is also being treated and recycled there. In fact, demolition and construction waste is treated there and are reused.
Tell us about the corporation’s current order book position.
Our current order book stands at Rs.35,000 crore and investment is not an issue as company gets funds from the government. The company doesn’t have any debt - on the contrary we have cash surplus - this surplus we use for our real estate business, which is 10-15 per cent of our overall portfolio.
When do you see the real estate sector reviving?
The bad days in the sector are over and in the next couple of months, you will see things will start looking up as market sentiment has started changing. The correction in rates has already bottomed out.
What is your growth projections for NBCC?
In next 5 years time, we plan to at least grow at 25 per cent CAGR in the top line and around 20 per cent growth in the bottom line.
Do you like travelling and if so what is your favourite destination?
I enjoy travelling. Mostly business trips but sometimes I take my wife also. The southern part of the country is very beautiful. I definitely like to travel to Goa. I love sea food. I like fish - prawns, pomphret and lobster.
How do you spend your weekends?
I enjoy my weekends with my family, hang around in eateries and catch the latest movie in theatre. Recently, I saw Ki-Ka. But, the recent movies of Akshay Kumar- Gabbar, Baby, Holiday, Airlift are amazing.
What inspires you a lot?
The smile that my work brings on my employees’ face inspires me a lot. This actually drives me and the company as well. And as far as my message for the youth is concerned, there is no shortcut to success than hard work and sincerity.