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Ahluwalia Contracts (India) Ltd.

BSE: 532811 Sector: Infrastructure
NSE: AHLUCONT ISIN Code: INE758C01029
BSE LIVE 11:16 | 29 Jun 323.75 0.10
(0.03%)
OPEN

325.00

HIGH

326.35

LOW

318.90

NSE 10:55 | 29 Jun 323.15 1.20
(0.37%)
OPEN

317.25

HIGH

326.50

LOW

317.25

OPEN 325.00
PREVIOUS CLOSE 323.65
VOLUME 1575
52-Week high 409.00
52-Week low 240.00
P/E 25.21
Mkt Cap.(Rs cr) 2,169
Buy Price 324.00
Buy Qty 20.00
Sell Price 325.00
Sell Qty 44.00
OPEN 325.00
CLOSE 323.65
VOLUME 1575
52-Week high 409.00
52-Week low 240.00
P/E 25.21
Mkt Cap.(Rs cr) 2,169
Buy Price 324.00
Buy Qty 20.00
Sell Price 325.00
Sell Qty 44.00

Ahluwalia Contracts (India) Ltd. (AHLUCONT) - Chairman Speech

Company chairman speech

Chairman's Message

Our goals are clearly defined - to get smarter and bigger as we take on the hugeopportunity challenge resulting from the transformation that is visible on the Indianlandscape

Dear Stakeholders

I write you at a very important juncture in our journey. Having successfullybounced back into the profitability zone after two tough years of battling adepressed economic environment we are now at the threshold of a new wave ofgrowth. Our goals are clearly defined – to get smarter and bigger as we takeon the huge opportunity challenge resulting from the transformation that isvisible on the Indian landscape.

A nation in the grip of urbanisation

The inflection point in our journey coincides with the urbanisation wave that issweeping the nation. Just a few weeks back the new Government unveiled a plethora ofinitiatives in the Union Budget to boost infrastructure development in the urban areas ofthe country. On the anvil are a series of measures to boost investment easepolicy norms relax FDI regulations build new-age affordable housing andhigh-profile educational institutions and generally create an environmentfavourable for the enhancement of urban life.

The mood in the construction industry which is directly linked to growth inurban infrastructure is positive. After a period of de-growth resulting from a policyparalysis and slow rate of project approval things are finally beginning to lookup on the construction front. And as a leading integrated construction player we standat the helm of this change ready to take on the multitude of opportunities thrown up bythe transforming industry and business environment.

An endorsement of our intrinsic strengths

After 40 years of consistent growth your Company suddenly found itself plunged intogloom two years back. The last two years proved to be detrimental to our operational andfinancial performance as we battled a spate of challenges including volatility in theglobal environment slowdown in domestic reforms and hurdles to sectoral growth arisingfrom regulatory decisions and poor sentiment. The consequential inflation low GDP growthand high interest rate regime that prevailed in the market threw us into despair causingprofitability to dip and decline in sales.

What helped us come out of this challenging situation was a series of strategicinterventions that ensured that we were back on the track for growth. The Board approvedinfusion of around Rs. 50 Crores through Preferential Allotment and we also went in forcompletion of loss contracts/ withdrawal from contracts with estimated loss. Sale ofnon-core assets to increase the Company’s cash flow streamlining of the contractingpolicy installation of a high-level committee to regularly review and monitor projectscoupled with manpower planning and cost control measures enabled us to pull back out ofthe red.

Unlike many of our peers we chose not to go in for CDR – a decision that stood usin good stead as it led to a churning which saw reduced competition and improvement in ourmargins.

In a strategic shift we have also reduced exposure to the more risk-prone privatesector contracts which shall help us deliver on our promise to grow faster and betterthrough a smarter approach and business model.

The numbers get bigger

A Rs. 320829 lacs order book (as of 15th July 2014) stands testimony to the successof our growth strategy. With 48% of this coming from the public sector in line with ourrestructured approach and greater focus on high margin projects we expect higher EBIDTAand PAT margins to flow in over the next two years. The margins stood at6.18% and 2.26% respectively for FY 2013-14 with a total growth of 31% over theprevious fiscal.

Moving ahead smartly

The tough times are definitely behind us and what lies ahead is a period of gettingsmarter and bigger as we move towards garnering a bigger chunk of the growth potentialunleashed by the ongoing urbanisation drive. The opportunities are humungous and backedby the vision of our promoters the support of our stakeholders and partners and thecommitment of our people we are confident of making the most of the same. The US$ 1trillion investment in infrastructure targeted in 12th FYP 50% of it from the privatesector opens up wide vistas for our growth going forward.

With strong growth drivers in place in the economy and the push that theinfrastructure sector has got in the budget proposals the construction industry is on theway to expand and grow in a big way in the coming years.

For ACIL this offers opportunities of the kind not envisaged before. The two toughyears that we faced inspired us to learn the smart way of approaching growth andaddressing opportunities. It has taught us the ideal approach to reinforce our presenceacross diverse sectors while foraying into new areas of growth.

With our eyes firmly fixed on becoming the industry leader and focus clearly on highmargin Government projects we are set to create new benchmarks in excellence and qualityby building new-age infrastructure that will transform the face of India.

Affordable housing shall be high on our growth agenda and we plan to introducehigh-tech precast construction Russian Technologies for affordable and mass housing forwhich we have already established a strong technical collaboration.

The government plans to set up more IITs and IIMs is another opportunity area that weshall explore aggressively as we chart our future growth.

On a concluding note

While this may be the conclusion of my message let me assure you that what we arelooking at is actually the beginning of an exciting new chapter in our growth odyssey.With the continuing support of all our stakeholders to whom we owe much of the success ofour strategy and guided by our visionary promoters we have embarked on the next phase ofprogress and expansion which shall lay the foundation for your Company to get biggerand of course smarter.

Yours Sincerely

Bikramjit Ahluwalia

Chairman & Managing Director