Construction Companies

31 Oct 2017 CW Team

CW profiles the top companies in this category... Largest Construction Company Larsen & Toubro (L&T) Constant innovation and a strong management bandwidth together have insulated L&T from the threats of economic troughs and helped it maintain its growth trajectory. The company is present across various segments of infrastructure like heavy civil, transportation, railways, power transmission and distribution, water and urban infrastructure, hydrocarbon and other process industries. L&T plans to sharpen its focus in critical sectors such as defence, nuclear power and shipbuilding and is overall well-placed to significantly enhance its overall revenue in the next three to five years. The L&T Group has achieved an order inflow of Rs 142,995 crore during the fiscal 2016-17, growing at 5.1 per cent over the previous one. Domestic order grew by 9.5 per cent while international order inflow declined 4.3 per cent YoY. International orders at Rs 41,507 crore constituted 29 per cent of the total order inflow during the fiscal. L&T continues to carry a robust order book of Rs 261,341 crore as of March 31, 2017, which is higher by 4.9 per cent as compared to the previous fiscal, which gives L&T a multi-year revenue and margin visibility. As for financials, on a consolidated basis, the company has posted a revenue of Rs 110,011 crore as against Rs 101,975.34 crore in FY16. Net profit for the fourth quarter stood at Rs 6,485.5 crore as against Rs 4,544.70 crore in FY16. Fastest Growing Construction Company - Large Category 1st Rank Dilip Buildcon (DBL) Dilip Buildcon (DBL) is one of the leading private sector road-focused EPC contractors in India. With a large fleet of over 8,700 construction vehicles and equipment, DBL has emerged as the largest road EPC player and is one of the best project executors in the country. Having successfully completed almost 90 per cent of its projects before time, the company has managed to garner a sizeable Rs 316.90 crore early completion bonus in the preceding five years. Apart from roads, it has also developed EPC capabilities in bridges and flyovers, irrigation, mining and urban development. It also owns a portfolio of 24 BOT projects (14 completed and 10 under construction). And, the company's 14 completed road projects are consistently generating positive cash flow. A major factor distinguishing DBL from other infrastructure companies in India is its prudent bidding strategy and tight execution to complete projects before schedule. In FY17, the government's contribution to the company's order book was 95 per cent, which offers higher safety in terms of revenue recognition and receivables management. The consolidated revenue from operations in FY17 amounted to Rs 5,331.4 crore as against Rs 4,316 crore in FY16, registering a growth of 23.69 per cent. The consolidated operating profit-before-tax for FY17 amounted to Rs 372.12 crore as against Rs 277.26 crore in FY16. The consolidated net profit-after-tax amounted to Rs 357.68 crore against Rs 229.77 crore. As of March 31, 2017, the company had an order book of Rs 17,568.27 crore (up by 65 per cent), consisting of 37 third party road EPC projects, 10 of its own road BOT or hybrid projects on EPC basis, two irrigation projects, three urban development projects, three mining projects and one cable-stayed bridge project. 2st Rank Afcons Infrastructure A part of Shapoorji Pallonji group, Afcons Infrastructure is currently the second largest engineering and construction group in India. With its extensive experience and execution capabilities, the company has managed consistent growth over the years. In FY2016-17, Afcons bagged orders worth Rs 13,939 crore. Notably, its order inflow sustained even though there was an increase in the level of competitive intensity in the sectors. The pending order book position of the company as on March 31, 2017, was Rs 19,173 crore. Also, the contribution of international orders to the order book witnessed an improvement over the previous year. While the company's order book is strong at about three times of its top-line, going forward, it aims to increase the order book size. The growth of the company has been well diversified across different segments and geographies on the desired line and focus. All the segments are well-balanced and there is no over dependence on any one sector or geography and it remains present in all segments with reasonable participation. On the financial front, Afcons has achieved a total income of Rs 6,405.72 crore for FY17 as compared to Rs 4,474.18 crore in FY16, posting an increase of 43.17 per cent. The EBIDTA for FY17 was Rs 646.71 crore compared to Rs 550.66 crore in FY16, resulting in an increase of 17.44 per cent. The consolidated profit-before-tax for the year was Rs 206.85 crore compared to Rs 147.82 crore in the previous year, an increase of 39.93 per cent. The consolidated profit-after-tax for the year was Rs 152.70 crore compared to Rs 77.87 crore in the previous year. 3rd Rank Tata Projects Tata Projects operates through its business units - EPC, transmission and distribution, transportation, construction and environment, urban infrastructure and quality services. The company provides turnkey end-to-end solutions to set up power generation plants, power transmission and distribution systems, fully integrated rail and metro systems, commercial buildings and airports, chemical process plants, water and wastewater management solutions, complete mining and metal purification systems. Engineering excellence, supply chain expertise and construction management are its key strengths. The company is driven to deliver projects on-time using world-class project management techniques and has uncompromising standards of safety and sustainability. In terms of financial performance, Tata Projects' total income aggregated to Rs 6,086 crore in FY17 as compared to Rs 4,417 crore in FY16. The quality services revenue during the year was Rs 168 crore as compared to Rs 147 crore in the preceding year. The company's operating profit for FY17 was Rs 401 crore as compared to Rs 290 crore in FY16. This resulted in a profit-before-tax of Rs 183 crore as compared to Rs 112 crore in FY16. Net profit for FY17 stood at Rs 135.47 crore against Rs 61.85 core posted in FY16. In FY17, the company's order book aggregated to Rs 20,269 crore as compared to Rs 9,669 crore in FY16. At present, the total order backlog is at Rs 29,210 crore. What's more, the company secured L1 position for an order worth Rs 3,368 crore. As oil prices continue to remain low and capex plans deferred in the oil and gas sector, opportunities have been limited. Tata Projects is therefore evaluating other avenues such as opportunities with ISRO, new business segments like coal bed methane and oil asset upgradation projects. Fastest Growing Construction Company - Medium Category 1st Rank Ashoka Buildcon A major road developer and contractor in India, Ashoka Buildcon started with its first BOT project in FY1997, and today, the company has built a robust portfolio of BOT assets, focused on industrial and mining traffic. In addition to the roads space, the company undertakes EPC projects in the power T&D space, where it is involved in the construction of substations, transformers and distribution transformers. With six projects on NH-6 passing through mineral-rich states, elasticity of traffic growth following economic recovery will be substantial for the company. Commercial vehicles constitute majority traffic on the company's roads (approximately 80 per cent), placing it in a sweet spot to gain from industrial revival. On a consolidated basis, the company posted a total income from operations of Rs 2,979.35 crore in FY17 as against Rs 2,614.49 crore posted in FY16. EBITDA for FY17 stood at Rs 1,014.92 core as against Rs 824.24 core in FY16. The bottom-line was affected on account of higher interest out go in FY17. The company's EPC order book at Rs 6,400 crore provides a strong 23 per cent revenue CAGR visibility over FY17-19E. The management expects NHAI and MoRTH to award majority of projects in H2FY18, once the land issue is settled. It targets at winning fresh orders worth Rs 4,000-5,000 crore in FY18. 2st Rank KNR Constructions KNR offers EPC services across sectors such as roads, highways, irrigation and urban water infrastructure management. Its project execution strength primarily is in road transportation engineering projects. Initially, the company executed several projects via JVs, and later went on to undertake projects on a standalone basis. That said, today, KNR owns a formidable reputation of quality and timely execution. A conservative bidding strategy, unwavering execution focus, impressive asset base, backward integration and tight working capital control has paid rich dividends. Furthermore, before-scheduling project completion, high operating profitability and impressive return ratios make the company even more impressive. The limited BOT exposure provides comfort on the balance sheet health. At present, the company's order book has declined from Rs 4,257 crore as on Q1FY17-end to Rs 3,338 crore, leading to the book-to-bill falling to 1.9x. It is targetting incremental order inflows of Rs 2,000-2,500 crore over the forthcoming quarters. While focussing on the transportation space, KNR has attempted to de-risk its business model by ensuring that its order book is geographically well spread and spreading its wings to the irrigation sector, multilevel flyovers and bridges across rivers. For FY17, the company posted revenues to the tune of Rs 1,679.59 crore as against Rs 1191.68 crore in FY16. EBITDA for FY17 stood at Rs 297 crore as compared to Rs 214.75 crore in FY16. 3rd Rank Montecarlo Montecarlo (MCL) is one of the largest private sector construction companies of India that specialises in large-scale civil construction and energy networks by formulating new age construction technologies. It is a diversified conglomerate offering services in the areas of transport (roads and railways); water (irrigation and pipeline); mining (coal and lignite); energy (transmission, distribution and substation works); building and factory. The company operates across 15 states in the country. Founded in 1995, Montecarlo has grown steadily on the pillars of expert engineering skills, innovative project management approach and abiding faith in people and their abilities. The company's fleet of construction equipment owned is more than 1,200. It has around Rs 432 crore total of gross block, of which, Rs 210 crore is for plant and machinery. Of its several ongoing projects, the company is executing 13 projects in transportation, five in mining, two in power, one in water and eight in the building segment. The company has grown at a CAGR of 32 per cent in the past five years, and is expecting a turnover of around Rs 2,500 crore by March 2018, considering the two HAM projects it has recently bagged. In FY2016-17, Montecarlo's revenue stood at Rs 1,958.27 crore with a PAT margin of about 6 per cent. Its current net order book stands at Rs 6,500 crore. Montecarlo has also recently restructured its business to clear its shareholding structure; it is looking at launching an IPO size of around Rs 500-600 crore next year. Fastest Growing Construction Company - Small Category 1st Rank Ahluwalia Contracts (India) Ahluwalia Contracts has carved a niche for itself as a specialised building contractor. Major segments it caters to include high-end hotels, commercial, institutional, health, industrial facilities, infrastructure and housing construction. It is an integrated construction company with more than five decades of experience in offering turnkey solutions in all types of building space. Singed by exposure to slow-moving but fixed price contracts from private sector clients during FY2012-14, the company prudently sharpened focus on escalation clause-based orders from the Central Government and public sector undertakings This was beneficial as government projects ensured margin stability, payment security and greater confidence in execution timelines, de-risking the company's business model. Lean order inflows in the past three to four quarters has seen the company's order book declining from Rs 4,360 crore at H1FY2017-end to Rs 3,040 crore as on Q1FY2018-end. Considering the Rs 1,200-1,400 crore order intake guidance for the current fiscal, one can expect book-to-bill as on FY18-end to be around 1.8x. The company expects labour issues to settle down, going forward in the era of mechanisation, following which, EBITDA margin for the year would be higher by around 200 basis points. On the financial front, it has posted a topline of Rs 1,426.52 crore in FY17 as against Rs 1,249.58 crore posted in FY16. For FY17 it posted an EBITDA of Rs 181.45 crore as against Rs 174.94 crore. PAT at Rs 86.00 crore was marginally up against Rs 84.41 crore in FY16. 2st Rank J Kumar Infraprojects J Kumar Infraprojects (JKIL) is a civil engineering and infrastructure development company with primary focus on development of roads, flyovers and bridges. With over two decades of experience, it has established a track record of efficient project management and execution. JKIL, primarily present in the transportation space, has been on a high growth trajectory, posting a revenue and PAT CAGR of 12.06 per cent and 10.83 per cent each over FY14-FY17. Strong revenue visibility and diversification into new segments and geographies has been the springboard of stable growth in the company. A healthy order book and lean balance sheet is expected to support long-term growth. However, execution has been impacted in the interim due to raw material unavailability or utility shifting issues. The company's operating margins, leverage and working capital are among some of the best in the industry, and so are its return ratios (RoE upwards of 16 per cent). The reason behind the company's high margins is its strategy of not sub-contracting work to smaller contractors. The balance sheet remains healthy with a debt at Rs 470 crore and the net debt/equity is among the lowest in the industry at 0.03x. The company is steering clear of BOT projects, as it aims to keep its balance sheet light. On the financial front, for FY17, the company posted a top-line of Rs 1,437.50 crore as against Rs 1,408.63 crore in FY16. For FY2017, PAT stood at Rs 105.51 crore as compared to Rs 103.16 crore in FY16. 3rd Rank Welspun Enterprises Welspun Enterprises (formerly known as Welspun Projects) is a part of the Welspun Group. The company develops and operates PPP projects across various sectors such as roads, water and urban infrastructure. In the highway sector alone, it has successfully completed six BOT (Toll) road projects with a total length of over 500 km. In FY17, the company unlocked value from its investments in the energy business. It also bought back 15.49 per cent of its share capital in order to streamline its capital structure. Welspun Enterprises operates in the infrastructure space with investments in the oil and gas space. The company is unique in the Indian infrastructure space as it has a significant net cash balance of around Rs 900 crore, unlike most other companies (in the space) that are burdened with a high debt amount. As for its infrastructure business, the company's focus during the year was the Delhi-Meerut Expressway Project Package-1, which it bagged in January 2016. The project was one of the first to be awarded under the hybrid annuity model. In the oil and gas business, the JV company (Adani Welspun Exploration), where Welspun owns 35 per cent stake, was awarded one of the gas-rich clusters in Mumbai High (B-9 cluster) under the Discovered Small Field bidding process (DSF 2016) in March 2017. On the financial front, the company posted a top-line of Rs 327.68 crore and bottom-line of Rs 43.27 crore in FY17 as compared to Rs 184.85 crore and Rs 32.82 crore, respectively, posted in FY16.