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Infra major NCC expects a strong growth momentum with external environment becoming more favourable, balance-sheet getting stronger with debt reduction and order book swelling to over ₹22,000 crore.
The Hyderabad-based company , which had successfully divested two power projects and two BOT road assets and raised ₹600 crore through a rights issue, is now looking at sustained growth with clear business visibility for over 30 months.
YD Murthy, Executive Vice-President, Finance, NCC, told BusinessLine , “The order addition of over ₹6,000 crore in the first quarter, as against the targeted addition of ₹10,000 crore for this fiscal, has been extremely positive. This reflects the positivity in the country’s infrastructure sector.”
The order book addition of ₹6,059 crore as of June 30, 2017 includes ₹2,000 crore which the company bagged for an affordable housing project in Andhra Pradesh to be executed within 15 months. “Of the State Government’s affordable housing order, which entails construction of over 33,000 dwellings, a big chunk would be executed this year as land is available and we just have to construct,” Murthy said.
NCC had closed last fiscal with revenues of ₹8,032 crore and profit of ₹225 crore. It expects over 10 per cent growth in topline and about 15 per cent in profit during 2017-18.
“Both the Central and State Governments realise the importance of infrastructure in the growth of the country and are willing to extend support. This has begun to yield positive results in project implementation,” he said.
Asked about the current debt on the books, Murthy said it was about ₹1,700 crore on standalone basis and the company hopes to bring it down further.
The company’s effort to bring down debt from 2014-levels has paid off. “We started with a rights issue where we raised about ₹600 crore in a tough market by convincing some of the investors which included Blackstone, Chrysalis Capital and Rakesh Jhunjhunwala,” he explained.
“In addition, we divested stake in two power projects and two road assets, bringing down debt. We are also planning to further divest some of the land parcels held by NCC Urban. This will ease up about ₹100 crore extended by the parent,” he said.
With the Centre keen to push the growth of infra sector, a number of projects will come up for bidding. The company is keen to bid for upcoming hybrid road projects, he explained.
“Gradual reduction in debt and good performance has helped NCC get a rating of A Minus. This is expected to help us get loans at lower interest rate,” he said.
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