NCC Limited targets Rs 12,000 cr worth of fresh orders in FY17

Company had posted consolidated revenue of Rs 9,584 crore in 2015-16; eyes 10% growth in top line in current fiscal

Hyderabad-based construction company NCC Limited is aiming at new orders worth of Rs 12,000 crore in the current year as it plans to ramp up the order-to-bill ratio from the present 2:1 level.

The company had reported a consolidated revenue of Rs 9,584 crore in the year 2015-16 and is expecting to register a 10 per cent growth in top line during the current year. The company order book stood at Rs 17,655 crore as at the end of March, 2016.Buildings and roads account for Rs 8,376 crore or 47 per cent of this total order book.

According to Y D Murthy, executive vice president-finance of NCC Limited, the board of directors of the company discussed at length the new opportunities being created on the back of renewed infrastructure push from the Centre as well as in the states and took a decision to this effect.

The target of Rs 12,000 crore in fresh order accretion in the current year is over 60 per cent higher than Rs 7,399 crore worth of new orders the company had received in last year. The company expects most of these orders to come from the road sector both as EPC projects and in hybrid model annuity-based projects.

NCC was one of the few Hyderabad-based infrastructure companies that had quickly come out of the slowdown impact marked by project delays and mounting interest costs. Last year the company sold its interests in a couple of power projects besides divesting its equity in toll projects to bring down the interest costs last year without making any big loss on that count.

The company, which has a debt of Rs 1,888 crore, hopes to bring down the finance costs by a further Rs 100 crore to Rs 400 crore in the current year.

Murthy said in a recent analyst conference that financially the company was in a better position to handle the upcoming road projects. Also there was a less competitive intensity in bidding of the new road projects, according to him.

The hybrid model also reduces the risk as National Highway Authority of India (NHAI) now brings 40 per cent funding while there was no traffic risk because of the annuity system, the company says.

So far in this year NCC has bagged Rs 3,000 worth of orders. These include a Rs 1,380 crore water project contract from Telangana government.