Key takeaways of the call

Order backlog as end of Sep 2015 was Rs 4444 crore road of which about Rs 3083 crore (69%) and Power T&D Rs 1362 crore. So far in fiscal bagged projects worth Rs 2242 crore spread over 7 projects (of which 5 are EPC and 2 BOT/annuity projects).

Sales for the quarter ended Sep 2015 was up by 52% to Rs 663 crore of which revenue of EPC division was Rs 450 crore (Revenue mix: Power Rs 380 crore & balance roads), that of BOT division was Rs 240 crore (of which toll revenue is Rs 162 crore and income from associates is Rs 78 crore) and Rs 50.9 crore from sales of land and TDR. EBITDA margin of EPC was 15.6% and that of toll business (excluding associate income) is 64.3%. Revenue, EBITDA and tax of sales of land transaction is Rs 50.9 crore, Rs 44.3 crore and Rs 9.0 crore respectively.

The company expects another R 1500-2000 crore worth of orders are expected in balance period of current fiscal. The company is already placed L1 in orders worth of Rs 450 crore for which the company expects to receive LOA in a month.

Expects EPC revenue of Rs 2000-2100 crore in FY16. Typically second half sales will be about 1.3 and 1.4 times of H1. Power order book is also substantial so both Roads and Power will drive the EPC growth. Going forward overall EPC business EBITDA margins expected is about 14%. Power T&D business EBIDTA margin will typically be about 10.5%.

The company had a land bank of 270 odd acres in the SPVs with a book value of Rs 235 crore. The company invested in parcel of lands close to the projects executed so as to maximize the profit. The company will monetize these land parcels once it gets substantial premium to its investments.

Monetisation of land: In Q2FY16 the company sold a land parcel in SPV of Dewas Bypass BOT project. The land parcel is sold at Rs 50.9 crore and the book value of which was Rs 6.6 crore. Investment in sold land is made in 2010.

The value of Maldives project is Rs 110 crore order and to be executed in 18 months. The equipments have to be mobilized from India. The partner is already having a working relationship with Maldives government and so we partnered with him. Apart from Maldives, Africa and Mauritius are the other geographies the company looks at for expansion.

NHAI's tendering pipeline is about 8000-9000 km and of which about 30% are BOT projects and balance are EPC. So far in FY16, NHAI awarded about Rs 40000 crore (worth 4000 km) of road projects.

Consolidated Average cost of debt has come down to 11.4% as the company has refinanced some of the projects (Durg and Bhandara projects) as well as rate cut by banks. Expect average debt cost to go down by another 70-80 bps as the company is in the process of refinancing some more projects.

NHAI's Hybrid projects: Biding not started yet. Bidding for first set of projects is expected this month.

BOT project currently under execution are Chennai ORR, Dhankuni-Kharagpur and KSHIP-2 and of which the first is 80% completed, second is 91% completed and last is 50% completed. By April 16 both Chennai ORR and Dhankuni-Kharagpur project should get completed.

Of the 2 annuity projects recently won annuity payment per year is Rs 70 crore. Concession period is 10 year for these 2 projects of which construction period is 2 years. Of the project cost of Rs 600 crore excluding grant the net equity requirement is Rs 110-120 crore.