Moreover, with RBI going in for the repo rate cut last week, its interest burden will come down to some extent. The interest forms a major part of any project and a small fluctuation, can affect the net operating margins of any infrastructure company.
The sources, said, that earlier they used to get the loans at around 8.5 % per year but now they are getting at around 12.5% per year, which though is affecting their margin but a downward interest rate trajectory, is positive for the infrastructure companies.
Once the working capital requirements are fulfilled, then the company would be able to service it huge order book of around Rs.22, 500 Cr (twenty two thousand five hundred crore), which is 3.64 times the FY12 earnings. The company is working out to get some loans from banks, according to the sources. The company is talking all steps to revive the company and hence I am expecting the share to touch Rs.31-32 (50 DSMA) in the next 3-4 months time frame. The Q4FY13, results of the company are expected to be better than Q3FY13.