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A2Z Infra Engineering Ltd.

BSE: 533292 Sector: Engineering
NSE: A2ZINFRA ISIN Code: INE619I01012
BSE 16:01 | 25 Apr 27.15 -0.55
(-1.99%)
OPEN

27.45

HIGH

27.85

LOW

27.00

NSE 15:54 | 25 Apr 27.10 -0.65
(-2.34%)
OPEN

27.65

HIGH

27.90

LOW

27.00

OPEN 27.45
PREVIOUS CLOSE 27.70
VOLUME 69511
52-Week high 52.70
52-Week low 25.35
P/E
Mkt Cap.(Rs cr) 478
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 27.45
CLOSE 27.70
VOLUME 69511
52-Week high 52.70
52-Week low 25.35
P/E
Mkt Cap.(Rs cr) 478
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

A2Z Infra Engineering Ltd. (A2ZINFRA) - Chairman Speech

Company chairman speech

Dear Shareholders

I am pleased to share with you the annual report for the fiscal year 2016-17 when yourCompany has stayed the course on a difficult path to long-term sustainability. We havemade significant progress in improving business viability by focusing on completingexisting projects and taking up only profitable projects.I welcome you to read through thedetails of our performance and our prospects which remain bright.

In 2016 the world economy continued to be affected by the investment slowdown and wasfurther impacted by declining trade in the face of growing protectionism. Hence recoveryin commodity prices and buoyant financial markets during the year did not result in anyacceleration of growth momentum. The growth in economic output in 2016 stayed stagnant at3.1% same as 2015. However the tide has started turning since the last quarter of 2016and outlook for global economy in 2017 was positive. International Monetary Fund (IMF) hasforecast a 3.4% growth with the acceleration of both organized and developing economies.The Indian economy is also expected to do better in FY18 than the 7.1% GDP growth in FY17and will remain as the fastest growing large economy in the world.

FY17 saw the Indian government pushing the envelope hard on the reforms front with thepassage of Goods & Services Tax Act Insolvency and Bankruptcy Code enforcement ofReal Estate (Regulation and Development) Act liberalization of Foreign Direct Investmentnorms in many sectors and further increase in investments in the infrastructure sectors.However the one initiative that gathered most attention was demonetization of high valuecurrency notes that amounted to nearly 80% of the value of cash in the economy.Demonetization did affect the growth momentum in the third and fourth quarter of thefiscal year thus slowing down the growth to 7.1% in FY17. The overall sound macroeconomicconditions reform push improving global economy and underlying resilience of the economymeant that the growth momentum returned by the first quarter of FY18. This is likely tofurther gather steam with the predicted good monsoon and expected reduction in interestrates by the Reserve Bank.

Overall economic growth and especially reform push by the Government are expected topositively impact the sectors in which your Company operates. Overall increase in thebudget outlays for the infrastructure sector will also boost the opportunities for EPCplayers for e.g. allocations under the Integrated Power Development Scheme (IPDS) andDeen Dayal Upadhyaya Gram Jyoti Yojana (DDUGJY) were increased by 35% to Rs 10635 Crorein Budget 2017 from the revised estimate of Rs. 7874 Crore in FY17. Recently the centralgovernment has declared a budget of Rs. 75000 to 78000 Crore for building PAN IndiaOptical Fibre Cable Network specially to reach each Gram Panchayat of India. Howevergiven the anemic credit growth due to NPA issues faced by banks the recovery in capitalinvestment will continue to be slower than the economic potential. Telecom sector is goingto see consolidation going forward because of the disruption brought about by launch ofReliance Jio in September 2016 as seen from the proposed Airtel Telenor and Vodafone Ideamergers that were announced recently. The Government has also kept the 5G launch target of2022 intact in spite of the debt overhang on the sector from spectrum purchases. Thesefactors point to continued investment by the industry majors to retain their marketshares. Focus on urbanization and improvement in urban infrastructure and sanitation bythe Government is pushing municipal bodies across the country to adopt modern wastemanagement techniques and outsourcing to specialized private players. Commercial RealEstate segment has been a lone bright spot in the real estate market in the last fewyears. With the launch of Real Estate Investment Trusts (REITs) and 100% FDI in readyprojects institutional investment in the sector will see a huge spurt in turn leading tomore Grade 'A' properties in the country. Hence all these factors put together allow usto conclude that the Group's businesses have a bright future ahead.

The strategic realignment that we embarked upon few years back is not yet complete andis yet to help us achieve turn around. During the year we posted a higher loss as comparedto previous year however in addition to the declining revenue we were also hit by one-offitems such as impairment of project assets and deferred tax exposure. These results arebut a temporary setback which have not undermined our confidence in the steps that weimplemented and continue to push to achieve long term sustainability.

On the positive side the Company has executed most of the old EPC projectssuccessfully which has generated enough confidence in customers and banks. This would bea key factor in getting new business for the Company since most of the InfrastructureCompanies have struggled and could not survive in recent difficult times. Very fewcompanies could survive and are on revival path and your Company is one of those fewcompanies. Since the Government is increasing the spending on infrastructure to overcomethe investment deficit and accelerate growth this gives your Company a good opportunityto benefit from as it is fully geared to take up new projects in times to come.

Your Company has a promising future because of its contribution to nation building inkey sectors of the world's fastest growing large economy. We are working hard on realizingthis potential with a well-crafted strategy. I would like to thank our shareholderscustomers investors suppliers the exchequer and employees for their continued trust inus and our long-term success story.

Best regards
Surender Kumar Tuteja
Chairman