Corporate Development

Published: Mar 15, 2022
Updated: Mar 15, 2022

Rs 16k crore order book fast-tracks growth pace

ITD Cementation India

ITD Cementation India (ITD-CI) is a listed arm of infrastructure major Italian-Thai Development Public Company Ltd whose operations in India are nine decades old.

This leading EPC player is sitting on a healthy order book of Rs 16,372.50 crore, including new orders of Rs 7,500 crore secured during the current FY22, which translates into multi- year revenue visibility.

Recent orders include modification and refurbishment of two terminals of Ahmedabad airport (Rs 496 crore), the Sikkim University building on an EPC basis (Rs 309 crore), the Chennai UG metro line’s four stations and tunnels (Rs 3,955 crore), and IOC’s captive POL and LPG marine jetty at Kamarajar Port in Chennai (Rs 710 crore), to mention a few.

The order book could be broadly classified into six categories — urban Infrastructure, MRTS and airports 30.2%, marine 27.1%, hydro, dams, tunnels and irrigation 16.3%, industrial structures and buildings 15.9%, water and waste water 7.1% and the remaining 3.4% towards foundation and specialist engineering, highways, bridges and flyovers.

INFRA EXCELLENCE

“Our very special execution capabilities, strong pre-qualification credentials and the drive to excel enable us to build complex structures that are testaments of pride in nation building,” informs Jayanta Basu, Managing Director of the company.

The company’s diversified order book minimises the risk from slowdown in any particular segment. Importantly, a major thrust by the government on infrastructure capex augurs well for a seasoned player like ITD-CI. The GoI’s national infrastructure pipeline along with national monetization pipeline opportunities, backed by ‘Gati Shakti Master Plan’ (GSMP) to boost the infrastructure sector in India could fuel added growth avenues for important EPC players, and ITD Cementation is one of them.

Currently, the major projects under execution include underground tunneling and stations for the metro rail in Mumbai, Bengaluru and Kolkata, constructing a new terminal building at Trichy, integrating the terminal building and reconstructing the old terminal building at Pune airport, modifying and refurbishing the terminal building of Ahmedabad airport,a LNG jetty at Krishnapatnam, a container terminal in Yangon, Myanmar, piers and landside tunnels and buildings in Karwar, Karnataka, railway tunnels in West Bengal and Sikkim, sewerage and drainage systems in West Bengal, micro tunneling for the Ahmedabad Municipal Corporation, an aerospace museum at Air Force Station in Delhi, and six-laning of the Pune-Satara road.

During the first three quarters of the current FY22, ITD-CI has achieved revenues of Rs 2,635.2 crore from operations and profit after tax of Rs 50.6 crore, against Rs 2727.7 crore and Rs 18.4 crore respectively in the full twelve months of the previous FY21. So far, the EBITDA has remained at Rs 244.60 crore (@ 9.3%) in the current year vis-à-vis Rs 258.3 crore (9.5%) in the full FY21.

The company has a relatively small equity capital of Rs. 17.18 crore and net worth of Rs 1,117.2 crore as of December 2021, which gives a book value of Rs 65 (face value Re 1). Its current market price of Rs 63.50 translates into a market capitalization of Rs 1,091 crore. Promoter group ITD holds 46.64%, FIIs and mutual funds combined hold 25%, and about 26% is with the Indian public.

BIZ DIVERSITY

“We continue to increase our business diversity with a varied range of infrastructure projects, client base and geographies in our proud roster. We deliver quality infrastructure and best solutions to create long-term value for our stakeholders,” explains Mr Basu.

In addition to a healthy and diversified current order book of Rs 16,372.50 crore, the company also has a strong bidding pipeline to fuel its future growth. Further, its debt of Rs 556.4 crore (mainly towards working capital) looks reasonable considering its nature of industry. The credit rating of ‘A’-with stable outlook given by CARE and ICRA agencies endorse company’s stable financial health. However, meticulous execution of projects and efficient working capital management will be the key drivers of real growth for the company. Likewise, reasonably good operating margins are also equally important. Hence, there is huge potential for ITD-CI to take its revenue and profits to new heights, which would obviously reflect positively in its stock price in the future.