Corporate Report

Published: Jan 31, 2022
Updated: Jan 31, 2022

Om Infra Ltd. - Sticking to its hydro-mech expertise

Despite its half-century track record, Om Infra was stuck in a growth rut. Its sales turnover hovered around Rs 200-crore mark. But its fortunes are sure to change for the better as the company has decided to focus on its core strength of hydro-mechanical works for hydro projects under the dynamic leadership of the new Managing Director and CEO Vikas Kothari. Having made a mark domestically, Om Infra is now looking overseas and has already bagged lucrative irrigation projects in Ghana and Rwanda. Its apetitie, whetted by African success stories, the company is now eyeing the lucrative Far East and Middle East markets. At the outset, Mr. Kothari aims at achieving a sales turnover of Rs. 500 crore during the next 3 years.

Om Infra Ltd, formerly known as Om Metals Infraprojects, is undergoing a massive transformation. The a half-century-old company has moved at a very slow pace, with the sales turnover not reaching even the Rs 200-crore mark. But having come out of unrelated businesses like entertainment and hospitality, the company is now striving to emerge as a leading hydro-mechanic infrastructure development company and embrace its core competence on a path towards a fast growing dynamic corporate entity

Driving the transformation is Vikas Kothari, the company’s new Managing Director and CEO, a dynamic farsighted men and materials manager. To begin with, he changed the name of the company from Om Metals & Infrastructure Ltd to Om Infra Ltd, with the objective of making it a prominent player in water, irrigation and hydro-electric projects and turnkey solutions from design-drawing to commissioning of an infrastructure project.

Having graduated in engineering specialization in project engineering and design and after studying management (PGDIFBM) from Indian Institute of Management, Bangalore Vikas joined Om Metals, his family company which was a slow-moving company. To begin with Mr. Kothari streamlined the administration to completely transform the company in market, a leading entity in the space of hydro-mechanical projects implementation. All the concerned departments are now geared to implement projects with speed, efficiency and excellence. The mission now is rapid and sustained growth of the company so as to take its sales turnover to the Rs 500- crore level within the next 3 to 4 years.

The company’s pace of growth so far has been sluggish. During the last five years, its sales turnover has moved in a narrow groove, declining fractionally from Rs 189.05 crore in fiscal 2016 to Rs 187.07 crore in fiscal 2020, with the profit at net level modestly improving from Rs 11.15 crore to Rs 17.85 crore.

FINANCIAL BLUES

Laments an ambitious and far-sighted Mr. Kothari “No doubt, our track record in executing turnkey contracts, involving design, manufacture, supply, installation, testing and commissioning of hydro mechanical works of similar nature and magnitude for major hydro-electric and multi-purpose projects, has been exemplary, as evidenced from successful competition of these works on schedule, and even mostly ahead of schedule. But the company’s financial performance is far from inspiring.” Mr Kothari feels that a sales turnover of Rs 185 crore after almost half a century of existence of the company is not an ambitious show. However, he notes, “The operational performance of this leading ISO 9002 company is highly creditable. We have, for example, completed the Kurichu HE project in Bhutan much ahead of schedule and got bonus and incentives of Rs 6.05 crore for its speedy completion. Also, we have executed the Upper Krishna Project’s Almatti dam ahead of schedule.”

Mr Kothari is confident that “things will now change for the better,” and adds, “We are now concentrating on developing and shaping Om Infra as a numero uno hydro-mechanical projects implementation company.” According to him, the company has successfully executed more than 60 prestigious hydro-mechanical contracts for hydro-power and irrigation projects across the country. Subsequently, it has received a letter of intent (LoI) for similar contracts aggregating Rs 38.54 crore.

Having established a prestigious and coveted position in the domestic market for hydro-mechanical infrastructure, the company has entered the overseas markets also. In Africa, it has started bidding for important hydro-mechanical and EPC contracts for hydropower and irrigation projects. In fact, it recently secured irrigation and watershed development irrigation projects in Rwanda and Ghana.

AFRICA CALLING

Notes Mr Kothari, “We have won a couple of projects in Africa and are actively bidding for projects worth $ 100 million there. As part of our overseas expansion plans, we are also looking at entering the Far East and Middle East markets, which offer enormous potential for our expertise in infrastructure, water and irrigation.” The company has bagged an order worth $ 32 million for rehabilitation and completion of the Kpong Left Bank Irrigation Project in Ghana. The World Bank-funded project is expected to be completed very shortly. The company is also engaged in a 1,000-hectare irrigation project worth $ 17 milllion in Rwanda. This Indian government-funded project is expected to be completed in the next 12-18 months

On a closing, Mr Kothari adds that the company’s bid for the Rs 621-crore Shahpur Kandi Power House project is LI (lowest) in competitive bidding and we are positively awaiting for LoI from the government of Punjab, on merits for this tender.