our Company is steadily on track and focused on leveraging industry opportunities tobegin its forward journey on a path of unprecedented growth
India continues to be one of the world's fastest growing major economies and is poisedto touch
US$5 trillion in five years and US$10 trillion in eight years thereafter(Source: Budget 2019).
India is now the world's fifth largest economy and has seen a major transformation inrecent years. The most important among them is the successful roll-out of the Goods andServices Tax (GST) Make in India initiative the Insolvency and Bankruptcy Code (IBC) andthe Real Estate Regulatory Authority (RERA).
These reforms address some of the intrinsic challenges that the country was facing evenfive years ago.
The reform measures and other initiatives by the Government of India and stategovernments have helped India improve its rank considerably from 100 to 77 in the WorldBank's Ease of Doing Business 2019 report.
The ranking provides useful input to influence investment decisions of global anddomestic investors.
I am pleased to report that your Company reported consolidated revenues of Rs. 592crores in FY 2018-19 which is a 10% increase over the previous fiscal.
The infrastructure division accounted for ~77% of the total revenue stream the restwas contributed by our sleeper division. There have been changes in the accountingpolicies due to GST and Ind-AS implementation and the first quarter revenues for FY2018-19 are lower by 10% in comparison to the previous year. But due to input tax creditavailability earnings were not impacted in any major way.
We reported profitable growth in the year under review.
On the infrastructure front there was a definite up-tick in both order inflow as wellas execution.
We achieved a major milestone this year. In August 2018 we received the single largestorder in our history. The contract we bagged was worth Rs. 362 crores from the Rail VikasNigam Limited (RVNL) Varanasi for rail cum road bridge works at Ghazipur and the projectwork is going on smoothly. Given our strong order book and order pipeline
I expect continuous improvement in performance of infrastructure contracts even in thenext fiscal.
This year your Company also saw significant improvement in the sleeper business. OurSouth Africa business experienced a significant pick-up in project execution especiallyin the second half of fiscal 2018-19 due to the rise in mining activities in the country.With the rise in project execution we expect higher returns on our investment in theSouth African subsidiary. Similarly our Indian sleeper business too should benefit thisyear on the back of strong order book.
Your Company enjoys attractive revenue visibility. Our total order intake was Rs. 586crores in FY 2018-19 which resulted in a net unexecuted order book of Rs. 1836 crores(excluding L1 orders). The EPC order book accounted for ~87% share of the total order bookand the sleeper manufacturing business accounted for the rest.
We are very optimistic about our business prospects for the coming year. The ongoinggrowth of the infrastructure segment especially in the Indian Railways is expected tosignificantly benefit us. The pick-up in railway capex will lead to increased orderintake leading to improved profitability.
Once we successfully complete the RVNL order we will be eligible to bid for singleorders of approximately Rs. 1000 crores in our own name.
Additionally our focus on profitability would continue with our efforts of maintainingan EBITDA hurdle rate of 13-14% coupled with better working capital cycle therebyenhancing our overall profitability. There is a drop in EBITDA margin primarily on accountof one time provision of some expenses and the drop is due to forex translation.
Favourable government reforms and strong macroeconomic policy framework is expected tolead India to achieve robust economic growth. With our resilient business model and yearsof expertise in the infrastructure segment we are all set to use our experience and movesteadily forward to achieve the next level of growth.
Dwarika Prasad Tantia