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Institutional Equities
Financial snapshot
Revenue growth CAGR at 16%
During FY05-08, the company’s revenue showed a CAGR of 23%, driven by timely execution of projects,
robust order inflow and easy source of finance. Despite robust order book, during FY09-11 net sales
witnessed a CAGR of 7% due to slower execution of orders, delay in payments, higher working capital and
regulatory issues. We believe the growth would improve from a CAGR of 7% over FY09-11 to 16% over FY11-
13, driven by traction in two large projects - West Bengal road project and Kishanganga HEP. However, the
growth momentum is getting restrained due to working capital requirement at an alarming level.
Exhibit 16: Projects in active execution
Rsmn
Hindalco Packages 7,060
RAPP-7&8 8,880
Mumbai Metro - VAG Corridor 1,450
DGNP Dry Dock 6,080
Padur Rock Cavern 3,750
Sainj HEP 4,310
NH-34 Road Packages 28,600
Kishanganga HEP 27,250
Total 87,380
Source: Company, Nirmal Bang Institutional Equities Research
Exhibit 17: Revenue growth trend
(Rsbn) (%)
60
55.3 45
50
47.4
40
40.9
35
40
36.4
33.1
30.8
30
30
23.6
25
20
19.9
14.9
20
15
10
10
-
5
FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12E FY13E
Revenue (Rsbn)
Growth (%) (RHS)
Source: Bloomberg, Nirmal Bang Institutional Equities Research
Slight pressure on EBITDA margin
During FY11, the company reported EBITDA margin of 13.2% on account of higher contribution from the
power sector in revenue. Going ahead, we expect EBITDA margin to be marginally under pressure due to
rising contribution of lower margin road projects in revenue and increase in sub-contracting to boost revenue
growth. We expect the company to report EBITDA margin of 12.5% and 12.6% for FY12 and FY13,
respectively.
Exhibit 18: EBITDA margin trend
(%)
15
14
13
12
11
10
9
8
7
6
5
13.6
13.0
13.2
11.9
12.2
12.5 12.6
10.5
9.2 9.1
FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12E FY13E
Source: Company, Nirmal Bang Institutional Equities Research
75 HCC