Tata Projects, the engineering, procurement, and construction (EPC) arm of Tata Group, expects to hit profitability in the next 18 to 24 months as a result of improved project execution and other factors, according to its Managing Director Vinayak Pai. In FY21–22, the infrastructure major, which has consistently delivered strong top-line growth, reported revenues of ₹13,531 crore.
The bottomline
According to Pai, bottom-line growth is important — even more important than top-line growth. “The first step is to strengthen our project delivery capabilities, and the second is to try to be specific about which industries to focus on, and to be balanced when taking risks. These factors together will undoubtedly boost the bottom line.”
He added, “As the company enters into the whole transformation, with the stabilisation of the value chain being initiated, we expect project delivery improvements to be visible in 6 to 12 months. Consequently, it will take 18 to 24 months to reach at least the top quartile in the industry, and we expect to see our progress in that direction.”
Most revenue from government
Tata Projects generates 80 per cent of its business from the government sector, while about 9-10 per cent comes from it other companies such as Tata Steel, Tata Chemicals, and more.
“Our focus on the government sector has been a big part of our revenue, but we want to balance it with private-sector investments. So, we intend to increase contribution from the in-house company, along with more private-sector opportunities,” said Pai.
Market conditions
The EPC market continues to be strong as more manufacturing continues to shift to the private sector in India due to global supply chain issues, said the company.
Apart from the power sector, Tata Projects said it has developed strong expertise in the hydrocarbon part of the energy markets. “We expect significant investments coming up in the hydrocarbon segment and opportunities opening up. At this point, we are doing three big units for the HRL refinery in Barmer, Rajasthan.”
Tata Projects directly employs around 11,000 people across its businesses and offers services including engineering, procurement, construction, commissioning, inspection and expediting, operations, repairs & maintenance, and shutdown service.