April 2015 | Jai Madan
New areas of business, new opportunities
Tata Projects steps out of its comfort zone to venture into spheres such as urban infrastructure and civil construction to meet the market challenges. Excerpts from an interview with managing director Vinayak Deshpande.
The infrastructure segment has been looking up of late. What kind of opportunities can Tata Project expect in this scenario?
During the last two years we have added many new segments to our portfolio and Tata Projects is now present in various infrastructure sectors. We expect opportunities in civil construction, power generation and transmission, the railways, metals and minerals, water, and in oil and gas. In addition, the company has diversified into urban infrastructure, one of the fastest-growing sectors in the country.
What is the nature and extent of the challenges confronting the company in the year ahead? How prepared is Tata Projects to face these?
Our short-term challenge is to take our profitability to a much higher level and to improve our cash flow. Due to the downturn in the construction industry, new business is hard to secure and profit margins are low due to aggressive bidding. Also, payment cycles are hugely stretched.
In the long term, the challenges that we face are basically technology oriented, from international competition and in execution. On the technology front, we have entered into relationships with leading technology companies. The increasing international competition within India has been an opportunity for us to look for options in our bidding strategies and to build synergies that are at par with those of our foreign competitors. Execution, as always, remains the key to unlock our growth; this has to be dealt with through efficient project management and through quality performance.
The company has been spreading its wings to reach foreign markets and customers. Has this internationalisation been smooth?
Our international foray has seen a reasonable progression, though a lot still remains to be done. Kenya, South Africa and the United Arab Emirates are the places where we have some projects and the revenues from these are growing slowly and steadily. As for the future, we are optimistic about Southeast Asia, Africa and the Middle East.