It gives me pleasure to welcome you to our Annual Report for the financial year 2018-19. I am happy to report yet another year of strong performance of the Company bolstering our position as a niche regional infrastructure development enterprise that is set to scale.
The financial year 2018-19 was not among the best for the Indian construction sector despite continued government thrust on infrastructure development. The national elections which were due in the first quarter of the current financial year created a somewhat uncertain political environment which partially impacted the sector during the last two quarters of fiscal 2019. India's economic growth slowed to around 7% in 2018-19. Furthermore the liquidity crunch ensuing debt default by a NBFC major also significantly impacted the overall market sentiment during the year.
However the formation of the central government with a decisive mandate for the second time has infused optimism in the market and the industry. The country is also on the path to stabilisation post the disruptive impact of the twin major financial and taxation reforms of demonetisation and GST. Moreover the Government's initiatives towards resolution of stressed businesses under the Insolvency & Bankruptcy Code (IBC) and stringent NPA provisions bank recapitalisation has also started giving favourable impetus to the economy.
We believe that the strong political leadership at the centre will yet again re-ignite and propel the country's economic growth and prosperity through laying significant emphasis on the infrastructure sector. This can be inferred from the speech made during the presentation of the interim budget. While presenting it Mr. Piyush Goyal quoted Infrastructure is the backbone of any nation's development and quality of life.
In tune with the promise of bringing forth revolutionary infrastructural changes the interim Budget allocated a sum of C4.56 lakh cr for roadways railways shipping and aviation.
The roadways sector was allocated an increased sum of C83015 cr with the Government renewing its pledge to bring connectivity to every unconnected village. Furthermore an upgraded allocation of C19000 cr was earmarked for rural roads development under the ambit of the Pradhan Mantri Gram Sadak Yojana (PMGSY).
Your Company is poised to significantly benefit from the various opportunities available in its areas of operations owing to the importance accorded by the centre to all the core infrastructure sectors. As of now your Company is present in 10 States and three countries with an order book consisting of 100% government orders. The order book value stood atRs 1944 cr at the end of the financial year under report.
Your Company achieved yet another year of outstanding performance meeting the revenue guidance it had set.
Given the last year of the elected central government and national elections during the first quarter of 2019-20 the economy was subdued especially during the last quarter of 2018-19. Besides due to the code of conduct coming into effect from the time of notification of the elections the Company operating predominantly under direct government contracts faced a challenging time during the intervening period.
However reinforcing its competitive advantage your Company continues to be driven by its set strategy of being in the fastest growing spaces with the safest customer. I am happy to state that your Company achieved its revenue guidance target despite a challenging business environment.
Your Company posted total revenues of C581 cr in 2018-19 as compared to '499 cr in 2017-18 registering an increase of 16.30%. EBITDA for the year stood at C62 cr as compared to C66 cr recorded in 2017-18 reflecting a reduction of 6%. Profit before tax for 2018-19 stood at C41 cr as compared to C47 cr achieved in 2017-18. Profit after tax stood at C24 cr for the year under review as compared to C32 cr in 2017-18 not taking cognisance of the special adjustment of tax expenses of C18 cr to resolve pending IT disputes from financial years 2010 to 2016 booked in financial year 2017-18. The reduction in EBITDA PBT and PAT was largely owing to an alteration in the billing pattern during the year to stage-wise completion vis-a-vis item-wise completion followed in the earlier years. The impact comprised additional cost booking to the extent of C14 cr during the year without consequent revenue booking.
On the operational side I am happy to inform that your Company made an entry into the states of Jharkhand and Gujarat. The Company is widening its footprint and increasing its presence in Maharashtra while also focusing on Madhya Pradesh for achieving greater geographic diversification. Your Company is focused on targeting new geographies for future growth and at present it has a presence in 10 States apart from international presence in Sri Lanka and Bangladesh.
During the year your Company continued pursuing its strategy of being a pure-play EPC enterprise with a sole focus on government projects and the current order book comprises only public sector contracts.
Your Company continues to have a diversified presence in highways roads and bridges and civil construction in water management irrigation and power projects. The Company also continues to be driven by the strategy of focusing on small government projects with short tenures with its superior project execution skills providing strong revenue visibility. Achieving fast project turnaround remains the core guiding principle of your Company.
The year 2018-19 saw the Indian economy yielding the benefits of structural reforms viz. GST demonetisation and IBC. The new government received a resounding mandate in the general elections. With the uncertainties now behind us the country can re-focus on its primary goal of building a new inclusive future for all its citizens. We look forward with optimism to the new political leadership which has a clear vision maturity and the resolve to achieve sustainable growth and prosperity.
Announcing a large corpus in the interim Budget to signal seriousness in the development of infrastructure the government has prioritised its focus on the sector. Furthermore rural road development has also become an area of emphasis. Also the government's aggressive focus on affordable housing river inter-linking and on irrigation provides huge foreseeable opportunities for your Company.
A growing economy with urbanisation at its core is attuned to support the country's infrastructure and construction sectors. This is aided in no small measure by favourable structural policies. Besides legacy and legal reforms by streamlining and easing environment and green clearance approvals along with new arbitration guidelines framed to assist in the speedy resolution of pending claims is bound to speed up project execution thereby improving cash inflows.
Your Company continues to be a pure EPC project developer and its focus remains on the three segments of building water management and roads and bridges/infrastructure with infrastructure constituting over 43% of the order book.
Your Company will continue to remain focused on enhancing operational efficiencies utilising all established norms. We continue to follow the cycle of bagging small ticket projects with stringent onsite operational controls which accelerates project completion thereby enabling raising milestone bills faster to enhance liquidity. Your Company also utilises its large talent pool along with cutting-edge IT tools and strategic sub-contracting to achieve efficiency in operations.
Furthermore your Company continues to identify and utilise appropriate geographical locations which results in strong delivery even in tough environments. Similarly a focused approach towards projects results in stable performance even amid tight liquidity.
Before I conclude I wish to sincerely thank our shareholders lenders vendors and all other stakeholders for their continued confidence and trust in the Company. I also acknowledge and thank fellow Board members and employees too for their invaluable support.
Your cooperation and confidence continues to motivate us to outperform every year.
Thank you for your continued support.
Chairman & Managing Director
29th May 2019