Some highlights for me
Not cooperating with credit rating agencies, while they will need significant funds for working capital.
Due to not cooperating, we can see that interest costs are also high due to the high costing unsecured borrowings, these loans are all above 15% roi.
Tunneling they got a contract/order without any past history in the segment, shows their recognition and capability from the customer’s perspective.
Tunneling will bring a lot of stability to the biz, due to long term contracts,
although this would also need significant investments, especially in the beginning for mobilization etc.
This can be seen from the other expenses in 2023 Specialised Construction expenses- 59.3cr, which was nil in PY and is due to the tunneling segment.
Also it is higher margin.
Breakeven should take a lot of time in this segment.
Since this was the first project, they took it at a lesser margin, maybe to prove their mettle to the industry.
Cost plus basis mitigates rm risk, leads to stable margins.
Thus i believe to show growth they need continuous inflow of orders as there is not much opt lvg possible in the biz.
One interesting point is that they don’t need to be L1 to win orders.
Customers require quality, experience and lastly credentials, these giants/foreign funds wont trust a new upcoming player to handle their projects, they need a reliable firm.
Need to understand more about the airport potential, they had done a project in 2018 for the ahmedabad airport.
Need to understand the Repairs & Maintenance cost under other expenses- 104.5cr (PY- 56.4cr)
Performance guarantee and dlp has never been invoked, proves the quality of work.
Jan 27, 2023, right issue was announced, didnt go thru due to lack of interest from investors.
The promoters do not have nay lineage in the biz
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