Revenue mix of Punj Lloyd will be 70% from India by next fiscal: Atul Punj
Punj Lloyd is all set to scale back its global operations and redeploy its resources in the domestic market. The Chairman of Punj Lloyd, Atul Punj mentions that the organisation will gain back its stability by the end of FY2016-17 and refocus on its post significant growth afterwards.
On asking the way out of the stressed market situation, that is standing like a mammoth in front of big groups, with no option of bailout, Atul Punj put some stress on finding out the overall structural issues, from acknowledging the same to finding out the reason behind their constant rise along with resolving them as soon as possible.
A concerned media authority asked about the biggest challenge in the construction industry, to which Atul Punj replied, “The problem that is affecting the sector is non-realisation of our receivables. You have a huge amount of arbitration. Almost all the award of arbitration is being appealed in the courts and the win rate in the appeal process by the appealing parties is around 1% statistically. Let us say you want to stretch it to 2 %. That means 98% of the arbitration is upheld in the court, but after eight years. In the meantime, contractors end up paying 12% interest. All you need to do is to pass or issue an instruction that if you lose in arbitration, please pay the contractor. If you win the appeal in the court, the contractor will pay you back.”
The Punj Lloyd Chairman also talked about India and foreign entities’ revenue mix, where companies overseas were contributing 70% but now, both are equally contributing. Atul Punj also showed his optimism regarding times to come, where 70% revenue will be generated from India and 30% from overseas. Rapid growth in Indian and saturation of other markets, have been considered one of the main reasons behind shifting back to the home turf by the Chairman.
Punj Lloyd has also invested Rs 200 crore in defence over the last five years, established a high-end machine shop near Gwalior, organising programmes like Tier I bidders and looking forward to obtaining the licence to export its manufactured components to Israel as the construction contractor has entered a joint venture with Israel Weapon Industries.
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