Roads: Order book to execution ratio
ROADS & HIGHWAYS

Roads: Order book to execution ratio

Reports reveal that the order book for 66 construction companies is three times their current revenue. Is there an ideal ratio to be followed?
According to Vijay Agrawal, Executive Director, Equirus Capital, “Generally, the ideal order book to execution ratio should be between three to four times of revenue. A good visibility of the next three-year order book gives comfort to investors.” Rajeshwar Burla, Assistant Vice-President & Associate Head - Corporate Ratings, ICRA, says, “The thumb rule is that the ratio should be close to the average execution period of the segment the contractor is operating in.”
Now, time for a reality check!

KNR’s existing EPC road projects amount to Rs 12.104 billion and HAM projects in the EPC mode to Rs 39.75 billion, taking the company’s total road EPC order book to Rs 51.854 billion. The company’s current order book to execution ratio is 2.5:1. 

“At Dilip Buildcon, our order book to execution ratio is 2 to 2.5 times the current revenue,” says Devendra Jain, CEO & Executive Director, Dilip Buildcon. The company’s total order book is Rs 230 billion. This includes Rs 130 billion worth of HAM projects and Rs 100 billion of EPC works. EPC works include roads as well as urban development, rails and metro, and mining.

The EPC order book of PNC Infratech as on December 31, 2018, was around Rs 80 billion. The company has seven highway projects on HAM with an aggregate bid project cost of over Rs 95 billion. “Four are already in the construction phase; for three projects, we have achieved financial closure and appointed dates for the same are awaited from NHAI,” says Yogesh Kumar Jain, Managing Director, PNC Infratech. The company has seven BOT toll and BOT annuity projects, which are already operational.

As on 31 December, 2018, out of the total Balance Order Book of 95 Billion, Ashoka Buildcon the order book in the road sector for own BOT projects is of Rs 48.93 billion. This primarily constitutes HAM projects worth Rs 47.75 billion, with the balance Rs 1.18 billion consisting of orders of certain annuity projects (not HAM). “These include seven HAM projects,” says Paresh Mehta, CFO, Ashoka Buildcon. “While two have been under execution for more than one-and-a-half years, five are recent additions.”

SHRIYAL SETHUMADHAVAN

Reports reveal that the order book for 66 construction companies is three times their current revenue. Is there an ideal ratio to be followed?According to Vijay Agrawal, Executive Director, Equirus Capital, “Generally, the ideal order book to execution ratio should be between three to four times of revenue. A good visibility of the next three-year order book gives comfort to investors.” Rajeshwar Burla, Assistant Vice-President & Associate Head - Corporate Ratings, ICRA, says, “The thumb rule is that the ratio should be close to the average execution period of the segment the contractor is operating in.”Now, time for a reality check!KNR’s existing EPC road projects amount to Rs 12.104 billion and HAM projects in the EPC mode to Rs 39.75 billion, taking the company’s total road EPC order book to Rs 51.854 billion. The company’s current order book to execution ratio is 2.5:1. “At Dilip Buildcon, our order book to execution ratio is 2 to 2.5 times the current revenue,” says Devendra Jain, CEO & Executive Director, Dilip Buildcon. The company’s total order book is Rs 230 billion. This includes Rs 130 billion worth of HAM projects and Rs 100 billion of EPC works. EPC works include roads as well as urban development, rails and metro, and mining.The EPC order book of PNC Infratech as on December 31, 2018, was around Rs 80 billion. The company has seven highway projects on HAM with an aggregate bid project cost of over Rs 95 billion. “Four are already in the construction phase; for three projects, we have achieved financial closure and appointed dates for the same are awaited from NHAI,” says Yogesh Kumar Jain, Managing Director, PNC Infratech. The company has seven BOT toll and BOT annuity projects, which are already operational.As on 31 December, 2018, out of the total Balance Order Book of 95 Billion, Ashoka Buildcon the order book in the road sector for own BOT projects is of Rs 48.93 billion. This primarily constitutes HAM projects worth Rs 47.75 billion, with the balance Rs 1.18 billion consisting of orders of certain annuity projects (not HAM). “These include seven HAM projects,” says Paresh Mehta, CFO, Ashoka Buildcon. “While two have been under execution for more than one-and-a-half years, five are recent additions.”SHRIYAL SETHUMADHAVAN

Related Stories

Gold Stories

Next Story
Products

Koemmerling opens Navi Mumbai experience centre

Koemmerling, a brand of the profine Group, has expanded its presence in the Mumbai metropolitan region with the opening of a new experience centre in Navi Mumbai and launched its Allure S46 minimal sliding door system for the Indian market.Located in CBD Belapur, the facility was inaugurated by Peter Mrosik, Owner and CEO, profine Group, along with Farid Khan, Chairman and Managing Director, profine India, and Kamal Bajaj, CEO, profine India.The company said the new centre will showcase its portfolio of uPVC and aluminium window and door systems to architects, developers and homeowners.The ina..

Next Story
Products

India's waterproofing market nears Rs 150 bn milestone

India's waterproofing industry is approaching a market size of Rs 150 billion and is expected to surpass the $2 billion milestone, according to speakers at the 2nd India International Waterproofers Conference & Expo 2026 organised by the Waterproofers Association of India (WAI) in New Delhi.The two-day event brought together more than 20 speakers, 55 international delegates and 53 exhibition booths, with discussions focusing on climate-resilient construction, advanced waterproofing technologies and international collaboration.Inaugurating the event, Durga Shanker Mishra, former Secretary, ..

Next Story
Real Estate

Dilip Buildcon Q1 FY27 Revenue at Rs 23.78 billion

Dilip Buildcon Limited reported consolidated revenue from operations of Rs 2,378 crore in Q1 FY27, along with EBITDA of Rs 429 crore and profit after tax of Rs 128 crore.Consolidated EBITDA margin stood at 18.1%, improving from 17.1% in Q4 FY26. On a standalone basis, revenue from operations was Rs 1,930 crore, EBITDA stood at Rs 199 crore and PAT was Rs 39 crore, with an EBITDA margin of 10.3%.The company’s order book stood at Rs 27,691 crore as of 30 June 2026, compared with Rs 28,830 crore as of 31 March 2026. Roads and highways accounted for 17.1% of the order book, irrigation and water ..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement