Key takeaways of the call

Traffic growth of all operational projects of the company on blended basis for FY18 was about 6.6-6.7%. The traffic growth in Q4FY18 was about 8.2% and in Q3FY18 was about 11.7% albeit on a low base of demonetization. The company expects this momentum to continue in H1FY19 due to low base and pickup in economic activity.

Of the 12 HAM projects in the portfolio of the company six HAM projects are under construction/implementation and for one project the company is waiting for appointed date having completed financial closure (FC). And for balance 5 projects it is discussion with banker for FC.

Of the six HAM projects under implementation, the company has completed construction to the extent of 31% for Rampur Kathgodam (in Uttarakhand) Package 1 and is in the process of applying for second grant having already received the first grant. As far as Rampur Kathgodam Package 2 the company has completed construction for 11%. The company has completed 26% in case of Bhavnagar Talaja (in Gujarat) and has already received first grant. The company has completed construction to the extent of 30% in case of Uno Kodinar (in Gujarat). The company has completed 17% of construction for Bangalore project (BRT Tiger Reserve Boundry-Bangalore) and Udaipur Byepass.

As far as Waranga-Mahagaon the company concluded FC in November 2018 and is in the process of getting possession of the land and appointed date is expected soon by end of May 2018 and posts which the construction to commence.

Of the balance 5 projects that were won during Q3 & Q4 of FY2018 the company is in the process of completing financial closure. The company in nearly close to conclude FC for Jodhpur Ring Road project and the company is in negotiation with Bankers for FC of other four projects.

Bidding activity picked up since Jan 2018 and this is expected to continue going into FY2019. About 47 projects with a length of 2183km worth about 44604 crore are under tendering and for which bids are to be submitted before end of June 2018.

Toll hike - In case of 7 NHAI toll projects it was about 4-4.5% hike in toll. In case of Non NHAI projects there was 18% hike in toll in case of Maharashtra Border Check post and there is no hike in toll in case of Ahmadabad Ring Road and Aurangabad Jalna projects. But toll hike is due for ARR effective from Sep 1, 2018

Revenue from operation under construction projects will go up from Rs 511.978 crore in FY18 as more and more projects get into construction phase from current six projects.

Consolidated debt as end of March 31, 2018 was about Rs 6971 crore; SIPL standalone debt was Rs 1329 crore. Debt in the books of under construction SPV was Rs 439 crore.

From April 1, 2018 completed impact of refinance will get reflected in the financials of the company. The company expects an interest cost reduction of about Rs 40 crore for FY19. Once the bond issue is completed the interest cost will go down further.

Arbitration – Arbitration award for Rohtak-Panipat was already issued and NHAI will release payment of 75% of claim against bank guarantee soon even though it chooses to go for appeal. In case of arbitration relating to Nagpur Seoni project, the hearing is over and order is expected by August 2018. In case of Mumbai Nashik Expressway where the claim amount is higher at Rs 400 crore, the arguments were over and award is expected soon. In case of Dhule-Palesner the arguments are going on and expect award by Sep 2018. So the company expects award in all of the arbitration proceedings by Sep/Oct 2018.

Revenue guidance for SIPL standalone was Rs 400-425 crore for FY19 and EBITDA margin was about 65-67%. Guidance for toll collection excluding Mysore Bellary for FY19 was about Rs 1200-1225 and cash EBITDA margin was expected at 85%.

SIPL order book as end of March 31, 2018 was Rs 900 crore including routine maintenance contract of Rs 760 crore. The major maintenance order is towards Bijapur Hungund and Hyderabad Yadgiri. Majority of it will be exhausted in FY2019 and FY2020.

Maharashtra Border Check post (MBC) - Out of the operational 18 check post the company collects a toll of about Rs 66 lakh/day plus applicable GST. By Q3FY19 revenue from 3 check post and by all 23 will be operational by end of FY2018. It can reach 83-84 lakh/day of toll. Debt outstanding in MBC SPV was RS 1020 crore.

Post implementation of eWay bill, the tax authorities are doing random checking sitting in MBC check posts. So in a way MBC has become part of the GST network.

Equity requirement for first 7 HAM project is Rs 428 crore and for balance 5 HAM projects was about Rs 600 crore.

Strong double digit growth in traffic in case of Rohtak-Panipat and Rohtak Hisar has powered the blended traffic growth for the quarter. Traffic growth of Rohtak-Panipat and Rohtak Hisar stood at strong 26% and 12% respectively. Traffic growth in Hyderabad Yadgiri was 7.1%, PCPNL was 7.83%, Bijapur-Hungund was 5%, Dhule Palesner was 2% and Bhilwara-Rajsamad was 2%.