It gives me great pleasure in reporting another year of commendable and holisticperformance by the Company. Though various developments impacted the growth of theconstruction industry it was a strong push by the Government to pace-up infrastructuralprojects that positively influenced our performance. We reported strong earnings andcommendable growth in both volume and market share.
FY 2017-18 can be rightly summed as a year of creating sustainable growth and investingin the future. While for many companies in the industry it was a year to get back on thetrack for JMC it meant:
Moving Faster Growing Bigger Getting Stronger
FY 2017-18 saw us execute a record ` 2756 crore of projects. The performance wasdriven by our persistent efforts towards operational improvement and consolidation as weprudently invested in better technologies and IT infrastructure. While on one hand wekept improving internal competencies on the other we kept exploring new opportunitiesand extending operations both vertically and horizontally.
We strengthened presence in the strategic sectors of highways urban infrastructurecomplex buildings and industrial units and extended in the areas of water supply andirrigation. We strategically enhanced capabilities to undertake MEP (MechanicalElectrical and Plumbing) jobs. We continued to consolidate presence in both Indian andinternational market on the back of strong track record of project deliveries.
In line with our strategy to strengthen IT we successfully implemented the latestSAP-based transformation project Optimus' which will greatly improve our processefficiencies. We are in the stage of adopting Critical Chain Project Management to bolsterexecution abilities. Further we have developed deeper customer-centric approach tobetter understand clients respond faster to the changing industry trends and matchexpectations.
With this we have considerably strengthened our competencies. We are now amulti-geography multi-sector player having the ability to offer integrated one-stopsolutions and handle complex projects.
I believe these are interesting times for the industry. The macro is positive with GDPexpected to grow at 7.4% in FY 2018-19 compared to 6.7% achieved in FY 2017-18.Construction and infrastructure sectors being directly correlated to the economic growthwill be in for some positive movement. Besides the implementation of RERA and GST thatwitnessed initial challenges are beginning to show signs of stabilization which willeventually lead to an improved real estate and trade scenario.
Infrastructure development is one area that will create huge opportunities for theconstruction sector. I am happy to state here that the Government has significantlyenhanced its impetus to the sector in the recent years. Apart from easing policies andfast-tracking projects the budgetary allocation to the sector has been increased to `5.97 lakh crores of which ` 71000 crores will be towards National Highways construction.Various flagship projects like Housing for All by 2022 ModiCare Sagarmala BharatmalaUDAN Smart City and development of infrastructure-linked real estate and industrialcorridors have also been envisaged which will boost construction growth. Furtherlarge-scale investments have been planned for developing infrastructure for water andirrigation railways and urban commuting systems
Overall the outlook for the construction sector is positive and favorable. We areconfident of capitalizing on these opportunities. With our strong presence across most ofthese segments in-depth industry knowledge technical expertise and improved operationalefficiency we are confident of a sustainable growth going forward.
During the year JMC reported a 18% increase in revenues and a 82% increase in itsprofit after tax. The growth was driven by our efforts to improve project managementoptimize costs enhance operational efficiency and implement superior constructiontechnology.
We leveraged our innovative marketing strategy deep domain knowledge andcustomer-centric approach to sustain competition. This enabled us to win new orders of `3339 crores in FY 2017-18 with our order book reaching ` 7616 crores at the end ofMarch 2018.
We also undertook several cost optimization initiatives by scrutinizing each cost itemthoroughly moderating wasteful expenditure and using technologies to reduce costs.
With this our EBITDA margins grew from 9.1% in FY 2016-17 to 10.3% in FY 2017-18.
We continued reviewing our construction process flow and practices to the minutestdetail and have undertaken improvement measures wherever possible. We recognized that anyimprovement would translate into a quicker project turnaround generating a quicker cashflow and moderate daily overheads. As a result our PAT has grown by 82% in FY2017-18 to reach ` 106.1 crores.
Highlights FY 2017-18
Successfully implemented Optimus' our flagship SAP-led business transformationproject Garnered healthy margins further optimized the debt-equity ratio andsubstantially enhanced all other major financial parameters Successfully extendedofferings to the water segment Received two international RoSPA awards for safetynumerous CIDC awards for safety quality and performance and got recognition for variousretention strategies and learning initiatives Achieved the status of a "LiveEnterprise" and got rewarded by the SAP Ace Award 2018 for real-time running of LiveEnterprise
At JMC we have outlined a strategy to leverage our competitiveness and capitalize onemerging opportunities.
One we will continue with geographic expansion focus to widen presence and offeringsin the Asian and African markets where infrastructure-related investments are on therise. We target to secure new orders in the Building and Factories and Infrastructuresegments here.
Two we have evolved our focus from the high-end residential to the affordable housingmetro corridors and Smart City segments. We are proactively working on securingmore of design and build composite projects infrastructure projects (Water PipelineIrrigation Highways Elevated Corridors Metros Housing) Institutional and CommercialBuildings Factory and Plant Projects.
Three we will undertake further measures to increase our operational efficiency andoperating margins and minimize finance cost to generate more cash.
Four we will make sustained investments towards strengthening IT infrastructure andautomation technologies.
Five we will continue to work towards improving performance of our Road BOT projectsand will evaluate an appropriate strategy.
Looking ahead we are confident that the combination of these initiatives will enablethe Company to sustain its revenue momentum enhance margins and create attractivevalue in the hands of all our stakeholders.
I thank all stakeholders for their unwavering support. A special thanks to ouremployees who continue to put in sincere efforts and without whom our success would nothave been possible. I assure you we will continue Staying Ahead of the LearningCurve. Finally I am grateful to all our shareholders for their continued belief in us.
Shailendra Kumar Tripathi
CEO and Deputy Managing Director