Business Today

Opportunity in Adversity

Angelique International earns a large part of its revenue from emerging economies in Africa and Asia where doing business is challenging.
twitter-logo Anilesh S Mahajan        Print Edition: Nov 23, 2014
Angelique International's Ajay Krishna Goyal
Powering ahead: Angelique International's Ajay Krishna Goyal at his office in Noida (Photo: Vivan Mehra)

CATEGORY: Global Business Excellence (Large Companies)

Ajay Krishna Goyal is betting heavily on Africa. The Managing Director of engineering company Angelique International says he is eyeing more projects in countries such as Rwanda, where a joint venture between his company and state-run Bharat Heavy Electricals just finished building the 28-MW Nyabarongo hydropower project. It is Rwanda's biggest power generation plant. Africa contributes roughly 60 per cent to Angelique's revenues. But isn't it difficult to operate there? "Over the years, we have learnt how to do business in Africa," he says. "Every continent has its own way of working. This continent [Africa] doesn't work with emails and faxes. It runs with relations. We have learnt this trick."

Set up in 1996 by DK Goyal, Ajay's father, with only 25 employees, Angelique has grown at a quick pace over the years. In 1998/99, it posted revenue of about Rs 30 crore. It hopes to close 2014/15 with a top line of Rs 1,800 crore. Talking about the 30 per cent compounded annual growth rate, Ajay says it's because of the company's focus on emerging markets. Angelique gets 70 per cent of its revenue from power projects and the remaining from water, irrigation, agriculture, industrial and social infrastructure projects. Angelique is also a debt-free company, and has an order book of $1.2 billion.

Angelique operates in 45 countries, mainly in Africa, West Asia and South-east Asia, besides Afghanistan. Many of these countries are politically unstable and torn with civil wars. "As a policy, we have decided not to take exposure of more than 10 to 15 per cent in one country," says Ajay. The advantage of operating in these countries is that there is little competition. Also, if the company manages to gain the trust of the local establishment, it can get additional work, although getting trained manpower in these countries is a difficult task.

Ajay is, surprisingly, not too gung-ho about India. He says the company let go several opportunities in India earlier, as it was not comfortable with the investment environment. Agrees Pankaj Goyal, Chief Financial Officer of Angelique. "In India, you require huge working capital. The competition is unfair. Earlier, no one was ready to take decisions, the decision-making was too bureaucratic. It was better for us to get into other emerging markets and make our capital earn better yield," says Goyal.

However, Ajay feels the new Narendra Modi -led NDA government might be able to revive the investment cycle in the next two to three years. "There are few opportunities at the moment. It might take some years to materialise. We will surely plunge back and evaluate those opportunities. We are a conservative company, and we are not driven by market movement," he says. But he adds: "We have not completely withdrawn from the Indian market. We are evaluating projects in the railway and power sectors."

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