How are construction cos managing operations at sites?
CW speaks to leading contractors to understand challenges and measures... June 2020
PNC Infratech is an integrated infrastructure company with expertise in the successful execution of expressways, highways, bridges, flyovers and airport runways and the development of industrial areas across several states in the country. The company is currently executing 20 expressway, highway and airport runway projects of over Rs 140 billion on EPC model. It is also implementing seven highway projects on HAM at an aggregate cost of over Rs 90 billion. Consistently profit making since inception, the company has a healthy balance sheet with over Rs 21 billion net worth as on March 31, 2019. Yogesh Kumar Jain, Managing Director, PNC Infratech, shares more….
Name one major challenge faced in FY2018-19. How did the company approach the same?
During FY17 and FY18, although the company had a substantial amount of unexecuted order book and was geared up to commence execution of projects, its hands were virtually tied to move ahead, primarily owing to non-availability of required land and other impediments totally beyond its control and jurisdiction. Given the challenge, the company took widespread proactive measures, adopted multipronged strategies and assumed higher responsibilities than envisaged in the contracts, to support the authorities in expediting the process of land acquisition and removal of encumbrances across projects. These concerted efforts resulted in the declaration of appointed dates and commencement of execution for most awarded projects in the later part of FY18 and FY19,resulting in a quantum jump in both the company’s topline and bottomline in FY19. Revenue, EBITDA and PAT steeply increased by 67 per cent, 43 per cent and 29 per cent in FY19over FY18 on a standalone (EPC) basis. The consolidated revenue, EBITDA and PAT also grew significantly in FY19 over FY18.
Also, with rising NPAs in this sector, the majority of banks and financial institutions refrain from making any fresh commitments of term loans to projects. In such a challenging situation, PNC Infratech achieved financial closure for three of its HAM highway development projects for an aggregate cost of Rs 45 billion in FY19 ahead of schedule, owing to the company’s consistently healthy balance sheet and impressive credit rating.
What is one decision you consider the biggest contributor to the company’s growth in FY2018-19?
Despite persistent delays in making vacant land available for construction by project proponents, the company was never discouraged and spared no efforts to mobilise resources, including positioning men, machinery and materials with operational readiness to commence execution immediately upon the removal of hindrances without any lead time, and accelerate progress. The company’s positive approach with enduring courage, even in challenging circumstances, has been the biggest contributor to its growth in FY19.
Name a single factor that you avoided, which could otherwise have impacted the company’s topline and bottomline.
With EPC in the roads and highways sector being the company’s core strength, we avoided venturing into new sectors where we did not find synergy with our expertise and competency
Going forward, what are your plans for the company’s growth in FY2019-20?
With over Rs 120 billion unexecuted order book at the beginning of FY20, well-progressing physical execution across projects, a large fleet of construction plant and machinery, a workforce of more than 9,000 with proven abilities and excellent financial health, the company is poised to scale new heights in terms of overall growth in FY20, both on a standalone (EPC) and consolidated basis. We expect to complete some ongoing projects successfully and secure certain new project orders during the reaming period of FY20.
Read on the CW Top Challengers selection criteria and methodology at https://www.constructionworld.in/articles/beststories/CW-identifies-the-Top-Challengers-of-FY2019/21687