Key takeaways of the call

Order backlog as end of Mar 31, 2016 was Rs 4110.6 crore (down from Rs 4186 crore as end of Dec 2015) and of which roads was about Rs 3300 crore (including Rs 2600 crore of EPC orders) and Power T&D Rs 800 crore. In addition the company is L1 in one NHAI project worth Rs 486 crore in Jharkhand.

Order intake in FY16 was about Rs 2821.9 crore with entire order intake being road projects. Order intake in Q4FY2016 includes the Govindpur road project in Jharkhand and Arunachal road projects.

Lower EPC revenue in Q4FY16 is largely due to challenges in land possession. Execution of Eastern Peripheral Expressway project as well as JNPT Port road project has delayed due to land possession issues there by suffering the execution Q4FY16 compared to planned execution schedule. By May 2016 the execution of these two projects commenced as the land possession/acquisition issues resolved. Hence the Q1FY17 execution is to pick up relatively. Though NHAI has already acquired land to the extent of 80%, there is resistance in taking possession of the land due to coming into existence of new land acquisition act, which has now been sorted out.

Continue to witness consistent growth of 7-8% in traffic for the BOT road projects of the company. The traffic growth was to the tune of about 15% in some stretches in MP roads.

Order Intake target for FY17 is about Rs 4000-5000 crore. This includes T&D order intake target of Rs 500-800 crore and balance are road projects.

The company currently has 2 projects under construction and of which Chennai ORR is completed to the extent of 95% and the Modhul-Nephani (KSHIP 2) project is completed to the extent of 85%. KSHIP project the target completion is Dec 2016 and for Chennai ORR is Sep 2016. These two projects will be expected to be completed within this time.

Budgetary allocation for roads in Union Budget for 2016-17 is about Rs 97k crore which is large compared to last 2 year. Road project orders for 10000 km under pipeline. NHAI targets to award 9000 KM plus in FY17 compared to 3760 km in 2013-14 and 4300 in 15-16.

Together by MORTH and NHAI the awarding will be about 4000 km in Q1FY17 alone. So far in Q1FY17 orders for 1000 km is already done and for another 2300 km is expected from NHAI in balance period of current quarter.

As of now barring Islampur Bypass project, no other EPC project in the order book of the company witness land issues. Work on Badami, Madhugiri, Arunachal Pradesh has already started. The work in case of Jharkhand projects of Dumka and Govindpur will commence in a month's time. In case of Islampur project the land issue still needs to be solved.

Assure the above proceedings (IT raid in offices of the company) not to affect regular working of company. The company is conducting its operations in all conformity within all legal provisions of the country.

PNG Tollway, an associate company has terminated the service concession agreement after giving notice to NHAI and has claimed compensation from NHAI. The exposure of the company to this associate includes Equity investment, loans, project receivables, interest receivables and construction work in progress. In view of uncertainty in receiving claim the company has made provision / written off. The total amount written off is Rs 144.30 crore.

As far as recent orders bagged, about 85% of land acquisition completed in case of NHAI project and mobilization will be in next 45 days. In case of two Jharkhand state Road projects i.e. Dumka and Govindpur, funded by ADB no significant land acquisition problem is foreseen.

In case of Sambalpur the revenue should go up by 15% due to toll revision alone not considering traffic growth