India's mounting pile of bad loans will hurt infrastructure players if the problem is not resolved fast, according to ITD Cementation India Ltd.'s Prasad Patwardhan.
“The concern largely stems from the banking sector, which is undergoing stress,” Patwardhan, senior executive vice-president and chief financial officer of the construction company, told BloombergQuint in an interview. A credit squeeze, if not resolved quickly, could hurt these companies in the future, he said. “Our requirement is not in terms of cash funding, but we need more guarantee limits.”
The rising cases of non-performing assets in the telecom sector could further stress the banking situation, thereby impacting infrastructure players like ITD Cementation, Patwardhan said. The Supreme Court last month ruled that India's telecom operators will have to include non-core revenue to calculate levies, dealing a crippling blow to the bruised industry that stares at dues and penalties worth thousands of crores.
The steady flow of orders and increased volume of operations will help the company going forward, Patwardhan said. “The execution of this order book is likely to happen in about three years' time,” he said, adding that the company expects to maintain 15 percent growth in top line for FY20.
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