For the financial year the company secured new business of
Rs 1438 Cr which is around 89% higher than last year and most of it (Rs 1296
Cr) has been in consultancy segment.
Company seems to concentrate more on the consultancy segment going
forward. This is high margin segment
unlike the turnkey which is low margin. Company’s mainstay continues to be
Hydro Carbon followed by Chemicals and
Fertilizers. Overseas consultancy
contribution is around 12% of the total consultancy contribution. Company has come out with a new project
execution solution called Open Book Estimate which is beneficial to both
customers and contractors. They have
secured some orders based on this mode.
Only time will tell if this is beneficial as the impact could not be
understood. As per company most of the
competitors are introducing many business models and any core competencies are
imitable and competitive advantage is short lived. There is really no moat in these
businesses. Company was granted one
patent and has applied for another one.
Company currently has 13 live patents and 17 are in pending approval.
When one looks at the last 10 year performance of the
business, it is difficult to predict anything.
The margins, ROCE, RONW and debtor turns everything has fluctuated. Current year metrics is definitely better
than what was in first year and by a big margin but there has been a lot of
fluctuation.
Company has made reentry into Fertilizer segment this year.
There has been some successful completion of some assignments and the company
is considering an investment in JV for
revival of one project.
In the infrastructure and waste and water management the
company may get into other modes of project management like BOO or BOOT. Company is diversifying into Fertilizer,
Nuclear, Solar and waste and water management which is showing encouraging
signs as per company. They are positive
that this competency can be leveraged to
expand business in overseas as well.
While the profit has reduced a bit compared to last year the
cash flow has increased by 200 Cr due to huge reduction in the loans and
advances which may be due to change in revenue mix which has increasing
contribution from consultancy. Company
increased the dividend payment compared to last year. Consultancy projects have increased while the
turnkey projects have reduced. It would
be great in the coming years if the consultancy projects continue to increase
at a healthy rate as it did last year which was done during a tough year.
No comments:
Post a Comment