Don't see need to raise fresh debts: GMR Infra

GMR Infrastructure has announced its fourth quarter results. The company's net profit was up at Rs 50 crore versus Rs 21.9 crore. Its net sales were up at 885.3 crore from Rs 620 crore. Its other income Rs 19.9 crore.

Ashutosh Agarwala, CFO - Strategic Finance, GMR Group said that decision on various options for raising money in GMR Energy will be taken in the next two weeks. On the other hand, Delhi SS will be operational from March 2010. He also added that extra expenditure incurred on new business had impacted margins in Q4. But any need to raise fresh debts is not seen, he said.

Excerpts from CNBC-TV18's exclusive interview with Ashutosh Agarwala:

Q: Could you walk us through this quarter in terms of what you have booked in each one of your projects?

A: Our gross revenue’s gone up by 42% to Rs 1,000 crore during the quarter and during the financial year 2008, we have Rs 2,697 crore of gross revenue, which is again up by 37%. The profit after tax has gone up by 128%, to Rs 50 crore during this quarter while the profit after tax for the whole year financial 2008 has gone up by 20% to Rs 210 crore, which has been quite a substantial improvement for the last year.

Q: Just one word on the margins for the quarter because while your sales have come in significantly above our estimates, the profit figure in spite of the other income has come in a tad lower than our estimates, what have been the margins in this quarter, have you maintained them or has there been some kind of a slippage?

A: Basically during the quarter there have been some extra expenses on account of certain businesses which has been booked into this leading to certain drop of lesser profits for the airport, that has impacted the overall margins the last quarter.

Q: Since you touched upon the airport, after the recent fallout in terms of the funding arrangements, the last time we heard from GMR on this issue was that they will probably debt for funding the airport construction and all the partners’ involved in the project will fund in equity in the proportionate manner, what is the update on that?

A: As of now we are dealing the airport construction from the real estate issue, because our prime consideration is to take the airport project forward and complete it on time in March 2010. So pending the settlement of the real estate issue, we will make sure that all the partners contribute funds to the extent of the leased rentals from their own account in proportion from their share holding. But going forward in a few weeks time, we expect a solution to the real estate matter and everything will be taken up according to that.

Q: So you are saying that there is no need to raise fresh debt at this point in time, there will only be equity infusion from the partners?

A: There is absolutely no need to raise fresh debt and at the interim measure, we will all raise funds required as deposit from our own sources. But going forward as real estate gets resolved, we will go according to the solution which if found out, will be a win-win solution for all the parties involved.

Q: Since you spoke about airports, one word on the international front, after the QIP that you raised, you had mentioned that you were actively looking at some kind of other international projects besides the Turkey Airport that you bagged and we need to expect some kind of announcement in the near future, anything on the anvil?

A: As you are aware we have formally established an office in London, the main aim of this office is to look for global opportunities and they are in the process of scripting a detailed international strategy for the GMR group as a whole. Going forward you will have some news on that but right now we are not in a position to comment because our strategy has not been yet finalized for the international business. But if you ask me whether we are interested in a global presence, yes we are, but we will definitely be reverting back with concrete details in the near future.

Q: A picture back on the quarter that just went by, there is some kind of an extra expenditure on the airport business that actually led to the depression in the margins - is this something that can be expected to continue because the analyst community as a whole is very bullish on the margins of GMR Infra with their execution coming in. Do you believe that the margins for the current quarter and also for the foreseeable future would be under some kind of pressure because of the extra expenditures or it’s a one off?

A: No these are non-recurring expenses charged on a one-time basis of around Rs 50 crore. Going forward these expenses would not be there and the airport and the EBDITA margins whatever expectations would be there, when the access becomes fully operational in Delhi from March 2010, then only you will see the profits from that business and the EBDITA margins coming into the picture.

Q: A lot of these power companies that have held back the IPO plans are now coming out, I need some kind of a timeline on the likeliness of the GMR Energy IPO hitting the markets?

A: We have a lot of power projects, we are definitely in the process of implementing those projects. We will require funds for these projects as we go forward and we will be definitely looking at various avenues for raising these funds. We are looking at various options in next few weeks time; we will come to some sort of decision, including if it is an IPO or we would be going for some sort of other mode of financing for this project. But definitely in few weeks time, we will come to a concrete decision on this matter.