Gayatri Projects eyes 30% top-line growth in 3-4 years on strong order flow

Order book at Rs 13,000 cr 2016-17 from Rs 9,000 cr a year ago; firm hopes to sustain 15% operating margin

Driven by strong order flow from the construction sector, Hyderabad-based infrastructure company Gayatri Projects Limited is hoping to sustain a 30 per cent top-line growth over the next 3-4 years.

The company's order book touched close to Rs 13,000 crore in the year 2016-17 from little over Rs 9,000 crore in the previous year. The company's appetite to further increase the size of order book is evident from a pipeline of Rs 2,300 crore new bids for the next two months, while the order book at the end of the sixth month of the current financial year stood at close to Rs 12,000 crore.

"Total revenue booking from the large new order book built in the last 24 months has been only Rs 1,000 crore. This growth should be much stronger near-term as we have already mobilised at most of new construction sites,"the company said.

Besides anticipating a 30 per cent top-line growth in coming years, the company is also hopeful maintaining its operating margin in 15 per cent range even as its EBITDA margin improved to 18 percent in the quarter ended September, 2017 as compared to 16 per cent in the corresponding previous quarter.

The company revenues stood at Rs 1,075 crore for the first half of the current financial year, representing a 37 per cent year-on-year growth.

One of the leading players in road EPC, which accounts for 52 per cent of its total order book, Gayatri sees huge opportunities arising out of the infrastructure spend proposed by the Centre via newly announced programmes such as Bharat Mala.

Gayatri has recently de-merged the BOT road assets into a separate company covering four annuity based projects and three toll based road assets with a total length of around 530 kms.'

While the company believes that the de-merger will increase the shareholders' value, the move will also help keep the group's flagship company focused purely on EPC business.

Though, Gayatri is also in power generation business by being a junior partner in Sembcorp controlled coal-fired power projects of 2,600 mw installed capacity, it is not looking at any fresh exposure in this segment. This helps Gayatri to further focus its energies on the EPC business.

Irrigation projects account for 32 percent of the total order book of the company while mining, land development and railways contribute 16 percent of the order book. The company's ongoing EPC projects are located in Karnataka, Odisha, UP, Bihar and Telangana. It is also doing a land development contract worth Rs 699 crore for the upcoming Navi Mumbai Airport.