We in the infrastructure industry feel happy to have a stable andcontinuing government at the centre. Uncertainties prevailing in the economy in the lastyear or so before the general elections are left behind. We look forward to a resurgentIndia with inclusive growth and prosperity for all. There would be policy continuity atthe centre on a long-term basis towards all sectors especially infrastructure andconstruction sector. The real GDP growth is estimated to be lower at 6.8% in 2018-19compared to 7.2% in the previous year mainly due to election-related uncertainties tightcredit conditions volatile crude oil prices and unpredictable currency fluctuations.Further debacle of a few large NBFCs in India has also constrained the economy to grow atthe expected rate. Infrastructure and construction sector was worst affected. Growth wasalso adversely affected due to global headwinds such as Brexit intensification of tradewar between the US and China geo-political risks arising out of economic sanctionsagainst a few countries etc.
The credit conditions of the economy are looking up following earlysigns of improvement in the non-performing assets (NPAs) of the commercial banks.According to the latest RBI circular on resolution of stressed assets banks have beengiven freedom to resolve repayment problem of each company in the best possible mannerinstead of sticking to single set of guidelines issued earlier. India now stands at 77thposition in the World Bank's Ease of Doing Business Index. With various measures beingintroduced by the government the said position is poised to improve further.Infrastructure growth continues to remain the key focus area of the
government. After the success of Make-in-India and Swatch BharatAbhiyaan the Government has planned several other schemes such as rural electrificationaffordable housing piped water supply to all households to push overall growth of thecountry in general and rural landscape in particular. These initiatives in theinfrastructure sector will give the required boost to the economy to grow at a faster rategoing forward. India has been the fastest- growing major economy in the world duringrecent years lifting millions of Indians out of poverty. The authorities have initiatedimportant structural reforms to spur India's growth and to improve living standards forall. The major reforms initiatives such as inflation-targeting monetary policy frameworkthe Insolvency and Bankruptcy Code (IBC) the Goods and Services Tax (GST) and RealEstate (Regulation and Development) Act (RERA) taken earlier shall continue. Inaddition the Union budget 2019-20 has proposed several new initiatives such as furtheropening up of the economy digital push empowerment of the Micro Small and MediumEnterprises (MSMEs) and capital market reforms to improve the investment climate.
Your company will also gain from various upcoming projects. As you areaware your company is one of the few success stories where debt restructuring schemeshave been successfully implemented.
The company has shown stability and resilience post such event byoutperforming other players in the industry on both financial and business fronts. Sinceimplementation of S4A your company has already received fresh orders of more than Rs4000 crore. The order book of the company as on March 31 2019 is Rs 10215 crore whichgives us a strong revenue visibility over the next few years. Non-fund based limits areavailable for upcoming project requirements which will ensure smooth execution of newprojects in a timely manner with needed support from lenders. Company has been biddingwisely & selectively and expects at least 50-60% growth in order book in comingfinancial year with diversification in its project portfolios which have smallergestation periods and quicker turnarounds. Hence from here onwards your company will seemassive growth acceleration while surpassing challenging situations that are common in thelife of the company.
The financial year 2018-19 (henceforth FY 19) has been very stablefollowing focused decisions taken continuously by the management for retirement of debtwhich inter alia include the following:
a) Monetization of non-core land assets; and
b) Receipt of funds under Niti Aayog Guidelines against ArbitrationAwards for one of the projects executed by the company.
The performance of the FY 19 is as follows:
On a consolidated basis
- Revenue from operations increased by 3.9% to Rs 2362.20 crore in FY19 from Rs 2274.55 crore in FY 18 reflecting stable performance that the company hasachieved post implementation of major restructuring exercise in FY 2018.
- Net Profit has increased from Rs 95.91 crore in FY 18 to Rs 148.73crore in FY19.
On a standalone basis
- Revenue from operations increased from Rs 2038.90 crore in FY18 toRs 2069.89 crore in FY 19.
- Net profit for the FY19 increased by 46% to Rs 83.03 crore ascompared to Rs 56.88 crore in the previous year.
The cost of finance for FY 19 was lower by 39.86% over the previousyear as total debt of the company on a standalone basis declined drastically from Rs4474 crore in FY 17 to Rs 2403 crore in FY 18 and further to Rs 2215 crore in FY 19.
The company shall continue to focus on monetization of noncore assetsto reduce debt and further increase liquidity for the company. Our strategy for the nextfew years would be to concentrate on adding selected projects that are self-sustainableand get steady growth. The hassles faced by the economy in FY 19 may spill over to FY 20.However the economic and business environment is expected to improve in second half of FY20 as soon as the government settles down and the prospect of infrastructure industrybrightens. Further monetary and other public policy decisions may have a positive impacton the infrastructure industry.
The Company has already started witnessing growth wherein the orderbooks have increased significantly. Your company has come out as a winner under all odds.You will be glad to know that Lower Solu Hydro Project executed by the company in Nepalwas awarded the Hydro Project of the Year 2019 on top of an award for Tuirial Project inMizoram received in the previous year. With the urge to grow and stand out strong I asChairman and Managing Director of your company am confident that the positives are at thedoor step.
Thank you all shareholders for your much needed support andcooperation.
Chairman & Managing Director