We are optimistic on the road ahead with our comfortable order book position, strong revenue visibility, healthy operating margin, comfortable balance sheet position, controlled working capital cycle and strong return profile would like to take this opportunity to thank and show my gratitude for all our employees for their hard work and continued support and to all our stakeholders for their continued trust in us.
I hope you and your families are keeping safe during these challenging times. We were faced with an unprecedented once in a century event in terms of the Covid-19 led pandemic, disrupting social and economic activities across the world. During the year, India witnessed one of the strictest lockdowns disrupting the economic activities during the first half of the year. However, despite being faced with several challenges, I am pleased to convey the exceptional performance our team has delivered with their committed zeal to achieve the highest ever recorded revenues. We have been able to maintain our momentum and our strong efficiency, which has led to a complete rebound in execution post the tough initial quarters.
Infrastructure plays an important role in graduating India to the next phase of growth. The government focus on infrastructure spending to put the economy back on track resulted in the sector’s growth during the year under review. The NHAI awarded 141 projects (4,788 km) worth Rs 1.71 lakh crore in 2020-21. The share of engineering procurement and construction (EPC) in the awards last fiscal was 51% followed by hybrid annuity model (HAM) at 49%.
The announcement in Budget 2021 further reflects the Central Government’s commitment towards transforming the country’s infrastructure sector with a significant increase in allocation with the objective of connecting cities and towns and facilitating urban development across the nation.
The gross budgetary support towards capital expenditure has been increased significantly to Rs 5.54 lakh crore in 2021-22 BE (up 34 percent from 2020-21 BE, and 26 percent from 2020-21 RE) with higher allocation towards the infrastructure sector (roads, railways, among others). The government also provided for additional allocation towards the National Investment and Infrastructure Fund (NIIF) and the setting up of a new development finance institution (DFI) to bolster the financing avenues for the infrastructure sector and can pave the way for increased private participation thereby supporting the overall infrastructure investment.
Despite the challenging external environment, we showed resilience and reported one of our strongest performances in the recent years. Through our relentless focus we managed to recover the deficit in the last 2 quarters and achieved our goal of surpassing last year’s performance.
We reported revenues of Rs 25,275 million a growth of 15% over the last year. We grew at 20% at the EBIDTA level to reach Rs 4,107 million, while the EBIDTA margin grew and continued to remain robust at 16.2%. We were also able to improve PAT from Rs 1,657 million to Rs 2,110 million and PAT Margin improved from 7.5% to 8.3%.
We have been able to maintain a highly deleveraged balance sheet with debt-equity strengthening from 0.45 times in 2019-20 to 0.28 times in 2020-21 and have witnessed good improvement in our working capital to a net of 33 days. We continued to win orders with the addition of 4 new projects with a total epc value of Rs 19,333 Mn and ended the year with our order book standing at Rs 70,400 Mn.
Charting Our Growth Path
As we move forward, we have prioritized our strategies around three broad areas – continued focus on EPC and HAM in the road sector, move up in the value chain and diversify into other sectors within the infrastructure space and maintain a steady growth without stretching the balance sheet
Core Focus On Road EPC & HAM
We will continue focus on EPC Projects and timely execution with strong discipline in order selection. We will opt for selective HAM projects with a goal of maintaining healthy IRR and continue to explore opportunities to monetize HAM projects and free up equity. We plan to de-risk our business by expanding into sectors like Railways (track laying), Water lnfra (pipeline laying) and Airports (runways/taxiways). We will continue to maintain financial discipline, and we will continue to focus on projects with desirable levels of EBITDA Margins/ IRR. We are maintaining strict cost controls to improve profitability and deleverage balance sheet. One of our key success factors remains our continued focus on working capital management and cash generation.
While the economy started gradual recovery, the situation has been further disrupted by the second wave of the pandemic sweeping across the country. However, with a strong vaccination program in place, we expect that the situation will improve for better from the second quarter of FY21-22.
With the government push on infrastructure development, we see high potential on infra spending and awarding activity. With strong sectoral opportunities and our gradual pan-Indian expansion, we are expected to drive growth in the coming years.
Additionally, leveraging our expertise, we will continue to look at opportunities beyond road in sectors like railways, metro and airports to diversify our order book. India’s infrastructure plans in these sectors are well defined and there is a lot of project scope available. Towards this, we have further strengthened our business development team with the induction of senior resources who have vast experience in these sectors. Our focus is to explore and tap into these new sector opportunities that will contribute to the topline of our business in the coming years.
We are leveraging digitalization to enhance efficiency in our process and expect that as one of the key drivers of business in the next few years. Our continued focus on a disciplined approach in selecting and executing orders will translate into robust margins and return profile.
We are optimistic on the road ahead with our comfortable order book position, strong revenue visibility, healthy operating margin, comfortable balance sheet position, controlled working capital cycle and strong return period would like to take this opportunity to thank and show my gratitude for all our employees for their hard work and continued support and to all our stakeholders for their continued trust in us.
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