India is arguably the most attractive road building destination in the world.
WHAT MAKES THE SECTOR ATTRACTIVE IS THE LARGEST PIPELINE OF ROAD BUILDING PROJECTSANNOUNCED BY THE GOVERNMENT A SECTORAL SHAKEOUT IN THE LAST FEW YEARS THAT HAS MODERATEDAGGRESSIVE BIDDING FOR CONTRACTS AN IMPROVEMENT IN OVERALL MARGINS FACILITATINGREINVESTMENT IN CAPABILITIES AS WELL AS THE GOVERNMENT'S FOCUS IN REMOVING PROJECTIMPLEMENTATION OBSTACLES.
The biggest catalyst in the transformation of the country's road building sector hasbeen the role of the Indian government. Between 2014-15 and 2018-19 the overall budgetaryallocation to the highways sector increased from H32000 crores to H71000 crores. Thehighlight of this sectoral development has been the announcement of the H692000 croresBharatmala project which is the largest infrastructure project happening in the countryscheduled for completion in 2022. This has opened up a plethora of opportunities for theroad concession companies possessing relatively under-borrowed balance sheets aknowledgeable employee pool and access to cutting-edge technologies.
At Bharat Road Network Limited we expect to leverage on the encouraging performance ofthe company and capitalize on this unprecedented growth opportunity in ways possible.
Last year has been momentous for our company as we reached out to the public market inSeptember to support infrastructure creation under the Public Private Partnership (PPP)model. We are immensely thankful to the investors who reposed their faith in our businessmodel as asset aggregators in BOT platform which has been quite different from theconventional infrastructure development companies.
Following the successful listing of equity shares in the stock exchanges BRNLcontinued its focus on improving operational efficiency through enhancing servicesautomation and adopting a prudent project delivery mechanism to expedite execution of theexisting under construction asset.
These steps resulted in a healthy growth of the Average Daily Revenue (ADR) across allthe operational projects which increased by 22% to H163 lakhs in Financial Year201718 from H133 lakhs in Financial Year 201617. The toll revenue is expectedto improve further and stabilize with increased economic activities across the high growthindustrial corridors along the project stretch. Furthermore in the coming year we areexpecting a further spurt in the toll revenues as our Solapur project is nearingcompletion. This would essentially mean that all our existing assets would be generatingcash flows.
Riding high on the demonstrative capabilities across our areas of operations we arenow aiming for the next wave of growth by adopting more focused business growth strategy.
One the company will seek to buy out assets from financially-stressed companiesengaged in building roads across attractive circuits of the country. The Company possessesa strong Balance Sheet as well as a listed status which should enhance its visibility andhelp in accessing not just the required funding to address these opportunities but also ata cost that would strengthen business viability.
Two we intend to enrich our knowledge and experience pool through constantstrengthening of competencies related to road concessions tolling and related supportfunctions. We intend to develop and monetize on our project management capabilitydedicated services to a number of road builders for their projects under implementation.Besides we are committed to liaise deeper on behalf of our SPVs with NHAI generatingenhanced effectiveness out of the centralized Group activity.
At BRNL our vision is to constantly strengthen the quality of our portfolio throughexpansion consolidation and value accretion.
With relentless focus on expanding our presence across the transportationinfrastructure sector in the foreseeable future we expect to retain our position asIndia's premier pure-play road concession company.