DSIJ.in JULY 10 - 23 , 2017 I DALAL STREET INVESTMENT JOURNAL (^15)
Communication Feature
Please throw some light on the
order book from Rail Vikas Nigam.
GPT won 217 crore order from Rail Vikas Nigam Ltd in the final quarter of FY17. The contract is for the construction of major steel girder bridges, with foundation, substructure and related protection works in connection with Mathura-Jhansi third line in Agra and Jhansi division of North Central Railway in Uttar Pradesh, Madhya Pradesh and Rajasthan. This is the largest ever infrastructure order in the name of the company without any joint venture. The company’s technical credentials and ability to successfully handle complex and large scale projects in the past helped us secure this order in our own name. The execution of this project will enable us to participate in and bid for larger projects. Apart from this, GPT bagged another contract from Rail Vikas Nigam for an amount of64 crore in the fourth
quarter. The work is related to the
construction of major bridges over river
Chanderbagha, ROB and RUB with
approaches in Rishikesh-Karanprayag
new BG rail line project in Uttarakhand.
What are the challenges faced by
your company to achieve your
growth targets?
For 2017, GPT generated PAT of 16 crore,up by 24.4 per cent, on revenue of 513 crore, which was marginally up 2
per cent over last fiscal. Though the
numbers came in below our expectation,
we are happy to report the improvement
in the face of one of the most challenging
environments we witnessed last year.
The demonetization of specified bank
currency announced last November
slowed down construction activity. It
resulted in tremendous absenteeism and
We will continue to explore
opportunities in India
GPT INFRA
impacted availability of manpower for
deployment across various projects. This,
in turn, impacted the projected revenue
flow from these projects.
Besides, some of the company’s orders in
Manipur faced execution challenges due
to elections in the state. The economic
activity was halted during the last
quarter. However, the projects were back
on track at the fag end of the fourth
quar ter.
In addition, the company was expecting
to recognize revenue from its sleeper
factories set up in Uttar Pradesh for DFC
in the second half of FY17. But both the
manufacturing facilities saw delay in
RDSO approval for commercial
production.
It should be noted, though, this is only a
deferment of revenue to the current
financial year and involves no loss.
Activities have picked up in the two
facilities, one of which started production
in March and the other in June.
What are the fundraising plans of
the company this fiscal?To what
purpose will the funds raised be
utilised?
The Board has recommended raising of
funds up to 100 crore by way of equity shares and/or other securities. The funds are to be utilized for working capital requirements, investments by way of equity and/or loan in the company’s existing and new subsidiaries, normal capital expenditure, new business initiatives and general corporate purpose. What are your expansion plans this fiscal?Are you also looking to expand overseas? For the infrastructure segment, we will continue to explore opportunities in India where the focus on railway infrastructure is increasing. The railways’ capex for 2017-18 is1.3 trillion, which is
the highest ever capital outlay. We
currently plan to tap the Indian market
that offers massive prospects for growth.
However, as far as the sleeper segment is
concerned, DFCC continues to be a
focus area for us and we expect to bag
new orders as there would be sleeper
requirement for the new corridors. We
are also focusing on requirements for
concrete sleepers in ASEAN and SADC
markets, where we are working presently
and expecting an uptick in economic
activity.
How is your business growing in the
overseas markets and what
percentage of your revenues are
earned from overseas?
Revenue from the infrastructure segment
entirely comes from our civil and
construction contracts in India. Revenue
from concrete sleepers comes from our
sleeper facility in India(which also
includes exports to neighboring
countries such as Bangladesh and Sri
Lanka) and our overseas operations in
Namibia and South Africa.
Approximately 17 per cent of the revenue
from concrete sleepers came from
exports to Bangladesh and Sri Lanka in
FY17. We expect the export market to be
in our favour during the current financial
year with rising infrastructure demand,
particularly in Bangladesh where most of
the supplies are expected to flow from
West Bengal.Our strategically located
concrete sleeper factory in Panagarh,
West Bengal, places us in an
advantageous position to win contracts
and build our export orders.The factories
in Africa, i.e. South Africa and Namibia,
are also seeing an uptick in demand and
we expect them to grow almost 30 per
cent this year.
Atul Tantia, Executive Director, GPT INFRA
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