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RPP Infra Projects Ltd.

BSE: 533284 Sector: Infrastructure
NSE: RPPINFRA ISIN Code: INE324L01013
BSE 15:41 | 25 Jun 224.00 -0.55
(-0.24%)
OPEN

224.95

HIGH

231.50

LOW

221.70

NSE 15:31 | 25 Jun 220.20 -5.70
(-2.52%)
OPEN

225.70

HIGH

227.05

LOW

218.30

OPEN 224.95
PREVIOUS CLOSE 224.55
VOLUME 2421
52-Week high 325.30
52-Week low 206.10
P/E 37.58
Mkt Cap.(Rs cr) 506
Buy Price 0.00
Buy Qty 0.00
Sell Price 221.00
Sell Qty 65.00
OPEN 224.95
CLOSE 224.55
VOLUME 2421
52-Week high 325.30
52-Week low 206.10
P/E 37.58
Mkt Cap.(Rs cr) 506
Buy Price 0.00
Buy Qty 0.00
Sell Price 221.00
Sell Qty 65.00

RPP Infra Projects Ltd. (RPPINFRA) - Chairman Speech

Company chairman speech

THE 2016-17 RESULTS DEMONSTRATE OUR UNIQUE POSITIONINGAS ONE OF INDIA'S MOST PROFITABLE RURAL INFRASTRUCTURE COMPANIES AND ALSO SHOWCASE THATOUR STRATEGIES ARE DELIVERING VALUE WHICH GIVES ME THE CONFIDENCE THAT WE HAVE A SOLIDFOUNDATION FOR FUTURE PROFITABLE GROWTH.

Overview

At RPP Infra by focusing on our selected markets wehave been winning new business on improved terms and have maintained one of the strongestbalance sheets in the sector.

The Indian government has articulated its commitmentto significant additional investments to create and improve core infrastructure and isempowering states with increasing delegation of the spending. With the states allocatinglarger funds for the development of core infrastructural assets where we possess a deeplyentrenched presence paired with the fact that our strengths are now underpinned byimproved project controls we are looking at the future with optimism and confidence.

Performance

RPP Infra has maintained its disciplined approach tobidding for and winning new business. This ensures that the work we take up is of the typewe want to engage in and in the markets that we have chosen to concentrate on. In effectwe focused on bidding for long-term profitable work rather than tracking mere revenuegrowth.

As a result the underlying business was anchored onprofitability -evident in the 2016-17 performance where revenue growth of about 16% wasalmost commensurate with net profit growth that was in excess of 15%. We ended the yearwith an EBIDTA margin of 14.4% among the highest in the Indian construction industry. Ournet operating cash stood at a positive C34.24 crore during the year from a positive C34.78crore during 2015-16. Besides our year-end order book of C786.25 crore witnessed ahealthy 8% growth over the previous year's closing order book.

So together what this indicates is that the businessis able to drive substantive order book growth out of which we are able to achieve ourstated margin and cash flow objectives.

Markets

The strengthening of our business in 2016-17 andbrightening prospects of the sector coincide with the governments in our markets layingout plans for wide-scale investments in improving infrastructure.

For instance the Andhra Pradesh government hasearmarked a mammoth C73000 crore for setting up a smart

industrial township across 10000 hectares even as thenewly carved-out state builds a new capital in Amaravati. Besides the centralgovernment's allocation of about C50000 crore in Pradhan Mantri Krishi Sinchayee YojanaC27000 crore for road development under Pradhan Mantri Gram Sadak Yojana in 2017-18 andC90000 crore in Smart City and urban rejuvenation projects over the next five years willprovide us with growing opportunities in institutional projects enabling us toincreasingly partner with the government in nationbuilding.

Over the past three years on a macro-level theIndian economic landscape has changed significantly because the country is progressivelyfocusing on productivity gains and efficient use of resources. Be it larger measures likethe introduction of the Insolvency and Bankruptcy Code or the implementation of the GST orthe quicker arbitration settlement directive for disputed construction awards or smallermeasures like easing the number of approvals required or single-window clearances theseare together targeted at ease of doing business and enabling the country to unleash thepower of productivity and efficiency.

Protected business prospects

Right from the start we were clear in buildingexpertise in those sectors that would comprise core infrastructure the development ofwhich would require a reasonably high civil engineering component. Over the years thisemphasis has protected our business and growth prospects in several ways.

One we have created a robust competence pool inproviding integrated construction and development services across building projectsirrigation and water supply projects and infrastructure and road contracts. A controlacross the project lifecycle has enabled us to achieve our target margins and alsocomplete projects within schedule.

Two by virtue of our presence across this projectportfolio we are among the direct beneficiaries of government infrastructure investmentsin these sectors. As these investments grow over the years we are placed in a favourableposition also because of our track record in project execution and multi-yearinstitutional relationships.

Three 100% of our order book comprises government orgovernment-backed projects that provide greater business visibility and higher revenuesecurity with sheltered and predictable receivables.

Four our project portfolio is concentrated acrosssome of the fastest-growing states of south India including Tamil Nadu

Karnataka Andhra Pradesh and Telangana. Thisstrategic market presence opens up our Bad debts as a potential to bid for andbag

Five with demonstrated construction and executioncompetence we have now extended our presence to the state of Madhya Pradesh bysuccessfully bagging prestigious projects in the roads lift irrigation and pipelinespaces. We are also working on a High Commission of India-awarded USD-10.36 millionproject in Jaffna Sri Lanka that includes the construction of a cultural centre.

Six we entered into alliances with two large globalcompanies to strengthen our pre-qualification capabilitiesenabling us to bid for largerand more complex projects deepen our vertical footprint and widen our geographicpresence.

People

As seen from the progress that has been made by theCompany I am proud of the hard work commitment enthusiasm and dedication of so many ofour colleagues as they strive to deliver world-class projects for our clients.

Working on construction sites it is crucial that atevery level in our business we look to understand and mitigate risks and our objective isto reduce accidents to zero and ensure that everyone is kept safe. We have the highestregards for safety compliances and our teams adhere to these rigorously and withoutdeviations.

Dividend

This year demonstrated continued progress in ourbusiness. As a result the Board committed to a progressive dividend policy hasrecommended a full-year dividend of C0.50 (C0.50 disbursed in 2015-16). Conservingfinancial resources to be able to achieve stronger financial growth in the future isimportant giving us the platform to create sustainable longterm value for ourshareholders.

Outlook

Given the size and quality of our order book andpipeline of contract opportunities our customer-focused culture and integrated businessmodel we have a good platform from which to develop the business in 2017-18. We willaccelerate our business growth into markets and sectors where we can win high-qualitycontracts and achieve our targets for margin and cash flows while actively focusing oncompleting our existing work pipeline.

P. Arulsundaram

Chairman and Managing Director