Key takeaways of the conference call

Revenue for the fiscal ended March 2010 was higher by 61% to Rs 1013.09 crore and the PAT was higher by 80% to Rs 90.08 crore. The revenue for the fourth quarter was higher by 23% to Rs 403.17 crore and the net profit was Rs 40.12 crore, up 35%.

Until bill is raised the WIP and raw materials in sites is accounted as RMC and WIP.

Order backlog currently stood at Rs 3500 crore which is to be executed in 18-24 months. The order mix is about 45% road; 50% railways and balance 5% is others.

All orders are well covered with price escalation clause.

The company has submitted bids for about Rs 6000 crore worth of orders.

The company expects 70-90% growth in revenue for FY2011 and the growth of FY 10 will be sustained at bottom-line level.

The EBITDA margin of railway contracts will be about 22-25% and that of roads is 14-16% and the blended will be about 18-20%. In terms of public and private sector orders the blended EBITDA will be around 20%. But with the share of private sector increasing the EBITDA will go upto 30%.

Cash on hand is Rs 54 lakh. Debt on books is Rs 78.61 crore. Gross block Rs 286 crore.

Higher margin is largely on account of timely execution as the company has its own vehicles. Moreover completion before timeline also brings in incentive that adds to margin. Secondly the railway contracts are highly skilled job and place of work will always be rural/ remote area and more over it has very few competitors in Eastern region for this jobs. In railways the mines determines the margin. Owning mines thus means better margin. The company owns about 10-12 mines for aggregates and this is crucial as it brings down the costs.

Average size of orders is 100-200 crore. The strike rate will be 80% in eastern region and across India it will be 40%.

No major captive capex and will be only some maintenance capex.

Not comfortable with BOT projects unless otherwise it is viable. The company has quoted only for EPC part of BOT projects.

Drop in margin in the fourth quarter - Due to unforeseen developments the company has to procure material from outside so as to complete the project before time deadline and make eligible for 2% incentive. The company has to take a call if it procured the aggregates outside it will hurt the margin but will get profit boost with incentive kick in first quarter of FY2011. The company decided to take the hit in Q4FY10.

The company which plan to have a JV with Kalindee Rail Nirman has dropped that plan.

The company will not work if the project/ work that offers a EBITDA of less than 20%.