To be able to achieve this growth, the company is expanding its presence across India by setting up offices in Ahmedabad, Chennai, Bangalore and also Delhi. At present it has presence in western Maharashtra—Pune, Maharatshtra, and Nagpur.
Mitcon is among the few small and medium enterprises that went through an initial public offering last year on the national Stock Exchange’s NSE Emerge Exchange. The company had raised about Rs 25 crore through the IPO.
“Though we launched our IPO in a difficult time, with our revenues also down due to the economic slowdown, our investors have remained with us. With about 87 per cent of our equity with financial institutions and FII,” said Pradeep Bavadekar, managing director, Mitcon.
Mitcon founded in 1982 was promoted by financial institutions like ICICI, IDBI, IFCI and state development corporations such as State Industrial & Investment Corporation of Maharashtra (SICOM). Madhav Oak, company secretary, Mitcon said that the SICOM continues to hold its stake in the company and its valuation have gone up from Rs 200,000 to Rs 4 crore.
Bavadekar also added that after seeing the slowdown they realized having a pan-India presence would have help mitigate risks to growth in some way. For FY14 the company’s revenue declined 13.2 per cent y-o-y to Rs 40.5 crore against Rs 46.7 crore in FY13. EBITDA margin contracted 501 bps to 23.9 per cent as lower top-line led to un-absorption of fixed costs.
According to a latest Crisil Research report, owing to weak economic growth and muted investment spending from both private and public sectors, many of Mitcon’s key clients operating in cyclical industries (especially those in the power and infrastructure industries) faced growth challenges which, in turn, led to a 13 per cent y-o-y decline in the company’s top-line.
Mitcon has two sources of revenue—consulting and training. Consulting contributes about 60 per cent to the revenue of the company, and this is where it sees future growth as well. For FY14 the company had a total client base of 350-400 of which 150 were repeat clients.
“We provide end-to-end consulting for projects in both private and public sector. Even the Big4 do not give full services. Besides with an IPO I have gone a step ahead of them,” said Bavadekar. Mitcon provides consulting services to 11 verticals with key focus area being power projects, environment engineering and cluster development.
The company has undertaken consultancy for several power generation projects in Maharashtra, Karnataka, MP and Tamil Nadu. The company provides services like project feasibility studies, assistance for getting approvals, detailed appraisal reports, financial syndication, pre-contract engineering services, and post-contract project management services. Along with this Mitcon also cater to the entrepreneurial requirements of SMEs.
"SMEs approach us in a big way. They are a major contributor to our revenues. So far we have taken part in setting up of 15 clusters of MSMEs," said Bavadekar.
He also believes that Mitcon due to its connect and past projects has a good chance of growth. "There is a market for our kind of services. Last year many projects got shelved and hence we were impacted. But now we have seen activity come back," added Bavadekar.
Though the company has been witnessing tough times over the last 12 months, the management is hopeful that with the new government and the upcoming budget will bring in good time for infrastructure spends.
"Given that the economy is expected to recover in FY15, leading to higher investment spending, we have revised our revenue estimates upwards by 6 per cent and 3 per cent for FY15 and FY16, respectively," said the Crisil report.