Infra Sector

SECTOR THEMATIC
INFRASTRUCTURE
Betting on
Conservatism
Bid criteria
Competitive intensity
FI's limited understanding of risks
Equity requirement >

cash profits
Equity requirement >

net worth
High cost of
debt
NHAI ordering
Asset monetisation
Commodity prices
cooling-off
Infrastructure
Despite strong ordering momentum, we are seeing emergence of headwinds to the
Indian highways program. Substantial dilution of bid qualification has exposed the
sector to low quality, inadequately funded developers taking large order inflow
market share. This has the potential of de-railing the NH program, creation of sub
quality infrastructure, time and cost overruns and eventually higher cost to
completion and defaults. Financial institutions are playing at the party with reckless
sector lending, benchmarking the developer’s risks under the garb of NHAI AAA
rating. We remain cautiously optimistic as HAM projects are being bid like EPC
projects, which shall lead to equity shortfall and execution delays. EPC players with
strong balance sheets, conservative bidding stance, and secured funding stand to
outperform as the dust settles.
Parikshit Kandpal, CFA Nikhil Kanodia Manoj Rawat

parikshitd.kandpal@hdfcsec.com nikhil.kanodia@hdfcsec.com manoj.rawat@hdfcsec.com
+91-22-6171-7317 +91-22-6171-7362 +91-22-6171-7358
23 August 2022 Sector Thematic
Infrastructure
Betting on conservatism Capital Goods: Recommendation
Summary
Despite strong ordering momentum, we are seeing emergence of headwinds to CMP TP
Company Reco.
the Indian highways program. Substantial dilution of bid qualification has (INR/sh) (INR/sh)
Larsen &
exposed the sector to low quality, inadequately funded developers taking large 1,881 BUY 2,135
Toubro
order inflow market share. This has the potential of de-railing the NH program, Siemens 2,876 ADD 2,882
creation of sub quality infrastructure, time and cost overruns and eventually
ABB India 2,870 REDUCE 2,420
higher cost to completion and defaults. Financial institutions are playing at the Cummins
1,202 BUY 1,503
party with reckless sector lending, benchmarking the developer’s risks under India
the garb of NHAI AAA rating. We remain cautiously optimistic as HAM KEC
401 REDUCE 375
International
projects are being bid like EPC projects, which shall lead to equity shortfall and Kalpataru
361 BUY 471
execution delays. EPC players with strong balance sheets, conservative bidding Power
stance, and secured funding stand to outperform as the dust settles. Source: HSIE Research
Substantial dilution in bid qualification poses systemic risk Infrastructure: Recommendation

Post COVID-19, we have seen substantial dilution in the NH bidding norms; Summary
whilst this was initially done to support developers, the same has not been rolled CMP TP
Company Reco.
back. This resulted in smaller developers with limited understanding of risks (INR/sh) (INR/sh)
taking up higher market share of orders awarded. Our analysis shows some of GR Infra 1,364 BUY 2,266
these developers have net worth lower than the cumulative HAM equity HG Infra 554 BUY 980
requirement, whilst a few don’t even have capital for upfront equity infusion and KNR
251 BUY 350
Constructions
are in the market to raise NCDs to fund equity. This poses a strong challenge to
PNC Infratech 252 BUY 407
project execution and may result in cost escalation and delays/defaults. IRB Infra
242 ADD 284
Developers
Financial institutions joining party, limited understanding on pricing risks
NCC 66 BUY 108
may squeeze sectoral funding in mid term
Ashoka
Flush liquidity, low cost of funding, and limited avenues for credit growth have 77 BUY 140
Buildcon
led to PSU banks stepping up lending to the sector, irrespective of developer Ahluwalia
427 BUY 542
Contracts
quality. Decentralized decision making, absence of in-house project finance
JMC Projects 87 BUY 142
teams, lackadaisical approach to risk have made it easy for developers to raise
PSP Projects 572 BUY 705
HAM debt. It has become L1’s market and there is limited 40-50bps rate
ITD
differentiation between best and middling developer. Tier 1 private banks have Cementation
94 BUY 126
become cautious, seeing aggressive bidding, high inflation, and rising interest Dilip Buildcon 235 BUY 369
rates. J. Kumar
300 ADD 364
Infraprojects
Asset monetisation, robust awarding and strong tier-1 balance sheet are some Source: HSIE Research
of the tailwinds
Government’s intention of expanding highway programs augurs well for project
awarding. With debt embargo on NHAI (Capex to be funded by budgetary
support), we expect its balance sheet to improve. Asset monetisation may further
strengthen NHAI balance sheet as sovereign funds have shown strong interest in
recent NHAI and private road projects. Tier-1 developers continue to remain
cautious and seem to be choosing balance sheet over growth. This augurs well for Parikshit D Kandpal, CFA
long term rerating and asset creation. parikshitd.kandpal@hdfcsec.com
Valuation multiple near trough, rerating contingent on reduction in +91-22-6171-7317
competitive intensity
Tier-1 infrastructure developers are trading at ~8.5x 1-yr forward valuation. The Nikhil Kanodia
recent correction presents an attractive entry point for strong balance sheet nikhil.kanodia@hdfcsec.com
players. We expect competitive intensity to reduce as middling players’ order +91-22-6171-7362
books are full and in recent bids we are seeing that fewer companies and bids are
Manoj Rawat
below cost. Infrastructure asset creation is top priority of the current government,
which may lead to robust ordering over the next decade. TOP PICKS: GR Infra, manoj.rawat@hdfcsec.com
KNR, PNC Infra, HG Infra and NCC. Within the Capital Goods: L&T, Cummins +91-22-6171-7358
India and Kalpataru are our preferred picks.
HSIE Research is also available on Bloomberg ERH HDF <GO> & Thomson Reuters
Sector Thematic: Hybrid Annuity Method
Focus charts
Exhibit 1: Market share of infra developers in HAM projects
Total Listed (%) Total Unlisted (%)
80
65.22 67.27
70
60 54.41 53.13
50 40.41
40
59.59 45.59
30 46.87
34.78 32.73
20
10
0
FY18 FY19 FY20 FY21 FY22
Source: HSIE Research
Exhibit 2: L1 to NHAI cost spread – all companies Exhibit 3: L1 to NHAI cost spread of top-12 companies
Average NHAI Cost Average L1 cost Spread - RHS Average NHAI Cost Average L1 cost Spread - RHS
1,400 23.2% 25.0% 1,200 30.0%

25.5%
1,200 18.8% 18.7% 22.4% 25.0%
20.0% 1,000 19.9%
20.0%
1,000
15.0% 800
9.9% 15.0%
800
10.0% 600 7.7% 10.0%
600
5.0%
5.0% 400
400 0.0%
-2.6% -5.4%
200 0.0% 200
-5.0%
0 -5.0% 0 -10.0%
FY18 FY19 FY20 FY21 FY22 FY18 FY19 FY20 FY21 FY22
Source: HSIE Research Source: HSIE Research
Exhibit 4: L1 to NHAI cost spread of top-6 listed Exhibit 5: L1 to NHAI cost spread of top-6 unlisted
companies companies
Average NHAI Cost Average L1 cost Spread Average NHAI Cost Average L1 cost Spread
500 17.8% 17.1% 0.2 700 0.4

18.0%
0.15 600 29.4% 32.7%
400 0.3
6.8% 500
0.1 22.2%
300 400 11.5% 0.2
0.05
200 300 0.1
0
200
100 -6.5% -2.9% 0
-0.05 100
0 -0.1 0 -0.1
Page | 2
Exhibit 6: L1 vs. NHAI cost of companies based on their net worth

Companies <INR 5bn INR 5bn<companies<INR 10bn
INR 10bn<companies<INR 15bn INR 15bn<companies<INR 20bn
INR 20bn<companies<INR 25bn Companies >INR 25bn
75%
50%
25%
0%
-25%
Exhibit 7: Average Diesel price in Mumbai, Delhi, Exhibit 8: Bitumen (VG40 grade - INR per tonne) price (-
Chennai and Kolkata 6%/-11%/+25% MoM/QoQ/YoY in Jul’22)
(INR/Litre) Avg Diesel price (daily)
60,000
Trailing 3-month Avg price
110 55,000
100 50,000
90 45,000
40,000
80
35,000
70
30,000
60 25,000
50 20,000
Dec-20
Dec-21
Apr-22
Aug-20
Apr-21
Aug-21
Oct-20
Oct-21
Aug-17
May-18
Aug-18
May-19
Aug-19
May-20
Aug-20
May-21
Aug-21
May-22
Aug-22
Jun-20
Jun-21
Jun-22
Nov-20
Nov-21
Feb-21
Nov-17
Nov-18
Nov-19
Feb-22
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
Exhibit 9: Cement price were range bound over the Exhibit 10: Hot-rolled coils (HRC) & sheets, including
last year (INR per bag) narrow strip price – INR per tonne (-5%/+6% QoQ/YoY in
Jun’22)
380 HRC price % Growth (QoQ) RHS
370 90,000 20.0%

80,000
360 15.0%
70,000
350 60,000 10.0%
50,000
340 5.0%
40,000
330 30,000 0.0%
20,000
320 -5.0%
10,000
310 0 -10.0%
Sep-16
Mar-17
Sep-17
Mar-18
Mar-19
Sep-19
Mar-20
Sep-20
Mar-21
Sep-21
Mar-22
Sep-18
Dec-16
Dec-18
Dec-19
Dec-21
Dec-17
Dec-20
Dec-20
Dec-21
Apr-21
Aug-20
Aug-21
Apr-22
Aug-22
Jun-16
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Jul-22
Oct-20
Oct-21
Jun-21
Jun-22
Feb-22
Feb-21
Page | 3
Contents
Focus Charts ............................................................................................................................ 2
Is HAM really a viable option in the long run? .............................................................. 5
Viability concerns……………………………………………………………………….8
Rising commodity prices……………………………………………………………...11
Story so far ............................................................................................................................ 14
Large portion of awarding to unlisted companies .................................................. 17
Value unlocking through InVIT .................................................................................. 20
Bidding Analysis ................................................................................................................. 21
Region-specific bids too much comfort may prove to be growth dilutive ............ 28
Bid-win ratio: Decent success in domiciled regions .................................................. 29
Credit rating at investment grade; outlook positive ..................................................... 31
NIP program–expansion of infra pipeline beneficial for larger Tier-1 Infra
companies .............................................................................................................................. 34
Shortfall in CRIF shall be met by additional source of funding ................................ 37
Company Section ................................................................................................................. 38
Key financials of companies based on the net worth ................................................ 38
Unlisted companies remain fundamentally strong – with robust profitability .... 39
Coverage companies ............................................................................................................ 40
Composite Valuation Summary ................................................................................. 41
Key strengths of HAM model............................................................................................ 43
Key Risks ............................................................................................................................... 44
Key takeaways from interaction with NHAI .................................................................. 45
Key Financials ..................................................................................................................... 47
Page | 4
Is HAM really a viable option in the long run?

Post COVID-19, there has been substantial dilution in the NH bidding norms,
whilst this was initially done to support developers, the same has not been rolled
back completely. This resulted in smaller developers with limited understanding of
risks taking up higher market share of orders awarded.
Exhibit 11: Recent policy changes announced by NHAI/MoRTH as relaxation due to COVID
Sr. Notification
Criteria Relaxation Notification Link
No. Date
To be released in proportion of the work
Release of Retention Money
already executed
3-6 months extension depending on site
Extension of Time (EoT)
condition
Monthly payments in proportion of the
Relaxation in Schedule H
work done and accepted as per the Atmanirbhar Bharat: Relief for
payments
contract specifications contractors/developers of road
Direct payment to approved sector
sub-contractor through Escrow
1 03-Jun-20 A/c https://morth.nic.in/sites/default/fil
Waiver of penalty for delay in es/circulars_document/Covid%20re
submission of PBG lief%20atmanirbhar%20Order%200
i. Extension of concession period for a 30620.pdf
period of 3-6 months
For BOT/TOT concessionaires:
ii. Loss in collection of fee to be
i. EoTs
compensated as per the terms of CA till
ii. Loss of collection of user fee
the time daily toll collection is below 90%
of the average daily fee
Linked to average of one year MCLR of
Interest annuities for upcoming top five scheduled commercial banks +
HAM projects 125 bps as against bank rate +300 bps
linked interest annuities
To be released in ten tranches of 4% each
Construction Annuities
as against five tranches of 8% each
Allowing 100% change of ownership post
six months from COD as against earlier
lock-in period of two years from COD. Changes in model HAM
Change of ownership This shall help deleveraging the balance concession agreement
2 10-Nov-20 sheet and freeing-up the equity which
shall lead to increased investments in the https://morth.gov.in/sites/default/fi
road sector. les/mca%20for%20ham.pdf
Lowered to 15% from 25% and accepting
bids from companies with wide range of
Net Worth condition experience of executing work in hospitals,
hotels, smart cities, warehouses and oil
and gas
Eight equal instalments instead of four,
Deduction for mobilization earlier with interest to be recovered in
advance from construction grant ninth and tenth instalment equally instead
of one instalment earlier
Atmanirbhar Bharat: Relief for
contractors/developers of road
sector
3 31-Dec-20 Extended till June 30, 2021
payments
https://morth.nic.in/sites/default/fil
es/circulars_document/Atamnirbha
r%20Bharat%20(1).pdf
Page | 5
Sr. Notification Criteria Relaxation Notification Link

No. Date
4 26-Aug-21 Relaxation in Schedule H Extended till September 30, 2021 Relief for contractors/developers of
payments road sector in view of Covid-19
Direct payment to approved Extended till September 30, 2021 second wave
sub-contractor through Escrow
A/c https://morth.nic.in/sites/default/fil
Reduction in Performance Reduced to 3% from 5-10% of the contract es/circulars_document/Covid-
security value 19%20pandemic%20regarding.pdf
Extension to achieve financial Extension of one month from the due date
closure
Extension of concession period Concessionaires to be compensated as per

for BOT/TOT concessionaires provisions of CA for any reduction in
collection of user fee
Relief for contractors/developers of
Extended till December 31, 2021 road sector in view of Covid-19
payments
second wave
5 08-Oct-21
Direct payment to approved
https://morth.nic.in/sites/default/fil
sub-contractor through Escrow Extended till December 31, 2021
es/circulars_document/Covid%2019
A/c
.pdf
Changes in model HAM
De-linking the O&M cost from evaluation concession agreement
O&M cost as a fixed percentage criteria and O&M annuities payable as
6 23-May-22
of BPC fixed percentage of BPC depending on the https://morth.nic.in/sites/default/fil
type of the project stretch and pavement. es/circulars_document/changes-
annx-in-ham.pdf
Source: MoRTH, NHAI, HSIE Research
Other changes introduced by the authority
 Government of India launched Gati Shakti-National Master Plan, which will help
lead a holistic and integrated development of infrastructure, generating numerous
employment opportunities in the country.
 In July, 2020 NHAI released SOP for de-scoping of the pending RoW, whereby
post the expiry of 20% of the construction period after achieving appointed date,
the pending RoW shall be removed from the project scope and BPC will be
adjusted accordingly.
 In October, 2020, MoRTH relaxed technical qualifications for bidders of HAM and
BOT projects:
o Core sector would be deemed to include civil construction cost of power
sector, SEZs, airports, industrial estates, logistic parks, pipelines, irrigation,
water supply, stadium, hospitals, hostels, smart city, warehouses, silos, oil and
gas and real estate development.
o The capital cost of the project should be more than 5% of the amount specified
as the estimated project cost.
 In September 2021, the NHAI issued a circular to clarify the GST implication on
the annuity payments in accordance with the CGST Circular 150/2021 issued by
the Central Board of Indirect Taxes and Customs (CBIC) on 17th June 2021. The
circular stated:
o The service of access to a road or a bridge on toll payment is exempt. So,
irrespective of consideration as toll or annuity, access to the road is tax-exempt.
Therefore, no GST is charged on the toll collected.
o However, the exemption does not cover the construction of road services,
whether or not payment is made via deferred payments or annuities. Private
Page | 6
developers raise invoices and receive annuity payments from the government
department, including GST, deposited with the tax authorities. GST, at 12%, is
chargeable on annuities paid to private developers, which they must deposit.
o It further clarified that NHAI will reimburse the concessionaire any additional
payable amount, which is the net impact on annuity after adjusting ITC for
project bids on or before 30th June 2017 and from 14th October 2017 to 16th
June 2021.
Expected changes in HAM model
Net worth criteria

 As HAM projects are getting traction, the authority is contemplating tightening the
minimum net worth criteria for bidders to ensure that successful bidders do not
Adjusting future equity falter on achieving financial closure and projects do not get stuck. The threshold
commitments for the under- financial capacity is 15% of the estimated project cost at the close of the preceding
construction HAM projects financial year. As per media report, NHAI wants the net worth threshold to be as
from net worth will help on the day before the opening of the financial bids by linking it to the balance
filter out developers who equity infusion in already awarded projects.
have already taken up excess
projects (more than what
 This step can materially reduce competition as many smaller developers would
become ineligible for bidding for incremental HAM projects. Companies with solid
they can execute)
equity base and robust profitability will benefit from this step.
O&M cost as a fixed percentage of BPC

 O&M is a critical activity in HAM projects as future annuities depend on proper
upkeep of the road as its failure will pose a serious risk for all the concerned parties
and quality of the project stretch.
De-linking the O&M cost
from evaluation criteria will  Projects were awarded to the bidder who has quoted the least cost (NPV of BPC
bring back sanctity in the during the construction phase and sum of discounted O&M costs during the
bidding process operational phase). Bidders have quoted abnormally low O&M costs to win the
project. This has led to aggressive bidding whereby developers have quoted a price
at a steep discount to the NHAI cost.
 In order to safeguard the viability of the HAM projects, MoRTH, via a circular
dated 23 May 2022, has done away with quoting O&M cost and the projects will
be awarded purely on the basis of BPC. For the maintenance obligation of the
concessionaire, the authority shall extend lump sum financial support in the form
of bi-annual payments which will a fixed percentage of BPC depending on the type
of the project stretch and pavement.
Reducing grant by half during construction period

NHAI is mulling a proposal
to cut the upfront payment to  In order to roll out a greater number of projects, NHAI is mulling a proposal to cut
highway developers to 20% the upfront payment to highway developers to 20%, from current 40%, during the
from current 40% during the construction period. As per media report , the change, if approved, will increase
construction period private investment in the sector as developers will put in more funds even during
the construction period.
 The proposal, if approved, will be applicable only to the new orders to be

awarded by NHAI. Since the change would require more equity contribution
from developers, it will reduce the competition as weaker/aggressive companies
will not bid for projects at higher equity commitment requirement.
Page | 7
Viability concerns
Concerns over easing the eligibility criteria…
Some of the smaller  After the NHAI reduced the eligibility criteria for HAM projects, many unlisted
developers have (1) net worth companies have bid for these projects. We classified the companies on the basis of
lower than the cumulative their net worth. There were 3/2/12/10 new companies with net worth up to INR
HAM equity requirement (2) 5bn in FY19/20/21/22. The average equity infusion required by these companies is
whilst few don’t even have INR c.41bn for FY22 (vs. INR c.25bn for FY21). With a net worth of INR 60bn as of
capital for upfront equity Mar-21, the HAM equity to net worth ratio has already crossed 0.7x, whereas the
infusion and are in market to HAM equity to cash profit ratio has already crossed 1.1x. With the order backlog
raise NCDs to fund equity. and new orders, the total equity requirement would already have exceeded the net
This poses strong challenge to worth. Going ahead, they might face issues in completing/maintaining the project
project execution and may stretch.
result in cost escalation and
delays/defaults. Exhibit 12: Number of new companies winning orders
Companies <Rs 500cr 500<companies<Rs 1000cr
1000<companies<Rs 1500cr 1500<companies<Rs 2000cr
2000<companies<Rs 2500cr Companies >Rs 2500cr
14
12
10
8
6
4
2
0
Exhibit 13: Equity requirement pool

Average
Equity Requirement* (INR mn) FY18 FY19 FY20 FY21 FY22
FY21-22
Companies <INR 5bn 26,862 9,942 14,714 34,299 47,978 41,138
5bn <Companies< INR 10bn 10,483 2,172 4,123 10,014 - 5,007
10bn <Companies< INR 15bn 1,844 790 - 9,183 2,967 6,075
15bn <Companies< INR 20bn 15,664 2,205 - - - -
20bn <Companies< INR 25bn 16,167 3,964 2,299 8,054 1,185 4,620
Companies > INR 25bn 8,056 1,442 9,480 39,132 24,029 31,580
Total 79,076 20,514 30,615 1,00,683 76,159 88,421
*The equity requirement amount to be infused in two years
Exhibit 14: Net worth pool

Net Worth* (INR mn) FY18 FY19 FY20 FY21
Companies <INR 5bn 59,105 62,362 61,068 59,852
5bn <Companies< INR 10bn 54,707 63,104 84,762 36,175
Companies > INR 25bn 1,81,669 2,49,427 3,59,665 4,31,833
Total 4,02,826 4,92,649 5,89,193 6,33,718
Page | 8
Exhibit 15: Cash profit pool

Cash Profit (INR mn) FY18 FY19 FY20 FY21
Companies <INR 5bn 19,519 18,271 20,189 15,612
10bn <Companies< INR 15bn 1,152 4,923 892 12,645
Companies > INR 25bn 48,179 61,921 62,998 63,323
Total 1,01,215 1,17,154 1,10,786 1,11,620
Exhibit 16: Equity required for HAM projects to net worth ratio
HAM equity/net worth* max (x) FY19 FY20 FY21 FY22
Companies <INR 5bn 0.15 0.24 0.50 0.78
5bn <Companies< INR 10bn 0.04 0.07 0.12 -
10bn <Companies< INR 15bn 0.07 - 0.87 0.06
15bn <Companies< INR 20bn 0.03 - 0.07 -
20bn <Companies< INR 25bn 0.16 0.04 0.33 0.11
Companies > INR 25bn 0.01 0.04 0.11 0.06
*HAM Equity requirement for the projects won in the current year and Net worth is as at end of immediately
preceding financial year. This is the max ratio which these companies will have to plan for whilst infusing
equity into projects as pending equity requirement from previous year may add to the overall equity
requirement
Exhibit 17: Equity required to cash profit ratio

Equity Requirement/Cash profits* FY18 FY19 FY20 FY21
Companies <INR 5bn 0.7 0.3 0.4 1.1
10bn <Companies< INR 15bn 0.8 0.1 - 0.4
15bn <Companies< INR 20bn 0.6 0.3 - -
Companies > INR 25bn 0.1 0.0 0.1 0.3
*The equity amount is to be infused in two years. The equity required to cash profit ratio is calculated
considering the required amount will be infused in two equal annual installments.
 The L1 and NHAI cost trend shows that, over FY20-22, smaller companies are
bidding more aggressively as compared to bigger/more stable companies. In FY22,
companies other than those with a net worth between INR 10bn and 15bn have bid
for NHAI HAM projects, with L1 lower than the NHAI cost (i.e. at discount).
Directionally, all categories have been aggressive in FY22.
Exhibit 18: L1 vs. NHAI cost
Companies <INR 5bn INR 5bn<companies<INR 10bn
INR 10bn<companies<INR 15bn INR 15bn<companies<INR 20bn
INR 20bn<companies<INR 25bn Companies >INR 25bn
75%
50%
25%
0%
-25%
Page | 9
 Due to lack of experience in constructing/maintaining road assets, the quality of

the project stretch might be suboptimal, which shall attract penalties to be
deducted from future annuities. This will impact the project viability adversely.
 Also, due to delay in achieving COD, there can be time as well as cost overruns in
the projects. If the developer is not able to achieve COD/PCOD, the project might
be terminated and the lenders might have to take a haircut.
 Weaker companies do not enjoy high credit rating from rating agencies, which
results in borrowing at a higher cost. The SPV’s rating is generally a notch or two
lower than the parent company’s ratings.
 Financial institutions are recklessly lending to the sector, benchmarking the
developer’s risks under the garb of NHAI AAA rating. Flush liquidity, low cost of
funding and limited avenues for credit growth have resulted in PSU banks
stepping up lending to the sector, irrespective of developer quality. Banks’
decentralized decision making, the absence of in-house project finance teams, and
the lackadaisical approach towards risk have made it easy for developers to raise
HAM debt.
 Going ahead, developers might face difficulties in achieving financial closure due
to aggressive bidding, delayed projects, and high equity requirement to net worth
ratio.
 All the construction/interest/operation and maintenance (O&M) annuities are
linked to price index multiple (PIM), which is the weighted average of wholesale
price index (WPI) and consumer price index (CPI) in the ratio of 7:3. However, this
might not compensate the concessionaire adequately as the inflation in the prices
of steel, cement, bitumen, etc. is higher. NHAI shall index the annuities with the
prices of a basket of good, which tracks the prices of inputs more accurately. Also,
NHAI may/should come up with a one-time compensation to the concessionaire
to offset the increased input prices of the under-construction assets.
Page | 10
Rising commodity prices may impact margins

Exhibit 19: Brent crude price (USD/bbl) on an uptrend (+42% YoY in Aug’22)
140
120
Crude prices directly impact 100
diesel and bitumen prices.
80
Commercial grade diesel is
60
costlier than the one available
at petrol pumps. Rising crude 40
prices will have an adverse 20

impact on margins. 0
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Dec-17
Dec-18
Dec-19
Dec-20
Dec-21
Aug-22
Jun-17
Jun-18
Jun-19
Jun-20
Jun-21
Jun-22
Source: Bloomberg, HSIE Research
Exhibit 20: Average Diesel price in Mumbai, Delhi, Chennai and Kolkata
(INR/Litre) Avg Diesel price (daily) Trailing 3-month Avg price
110
100
90
80
70
60
50
Aug-17
May-18
Aug-18
May-19
Aug-19
May-20
Aug-20
May-21
Aug-21
May-22
Aug-22
Nov-17
Nov-18
Nov-19
Nov-20
Nov-21
Feb-18
Feb-19
Feb-20
Feb-21
Feb-22
Exhibit 21: Bitumen (VG40 grade – INR per tonne) price (-6%/-11%/+25%
MoM/QoQ/YoY in Jul’22)
60,000
55,000
50,000
45,000
40,000
35,000
30,000
25,000
20,000
Sep-20
Sep-21
Aug-20
Dec-20
Aug-21
Dec-21
Apr-21
Apr-22
Jun-20
Jan-21
Jun-21
Jan-22
Jun-22
Nov-20
Mar-21
May-21
Nov-21
Mar-22
May-22
Oct-20
Oct-21
Jul-20
Feb-21
Jul-21
Feb-22
Jul-22
Page | 11
Exhibit 22: Cement price were range bound over the last year (INR per bag)
380
370
360
350
340
330
320
310
Sep-20
Dec-20
Sep-21
Dec-21
Aug-20
Apr-21
Apr-22
May-21
Jun-21
Aug-21
May-22
Jun-22
Aug-22
Nov-20
Jan-21
Nov-21
Jan-22
Oct-20
Feb-21
Mar-21
Jul-21
Oct-21
Feb-22
Mar-22
Jul-22
Exhibit 23: Hot-rolled coils (HRC) & sheets, including narrow strip price – INR per
tonne (-5%/+6% QoQ/YoY in Jun’22)
HRC price % Growth (QoQ) RHS
1,00,000 20.0%
80,000 15.0%
10.0%
60,000
5.0%
40,000
0.0%
20,000 -5.0%
0 -10.0%
Sep-16
Sep-17
Sep-18
Sep-19
Sep-20
Sep-21
Jun-16
Dec-16
Jun-17
Dec-17
Jun-18
Dec-18
Jun-19
Dec-19
Jun-20
Dec-20
Jun-21
Dec-21
Jun-22
Mar-17
Mar-18
Mar-19
Mar-20
Mar-21
Mar-22
Jul-22
Source: RBI, HSIE Research
Page | 12
Exhibit 24: Impact of raw material costs on margins

KNR
Particulars Ashoka Dilip Buildcon GR Infra HG Infra PNC Infra
Constructions
Break-up of raw material cost
Machinery 12-15% 12-15% 12-15% 10-12% 12-15% 10-12%
Labour 25-30% 12-13% 12-13% 10-11% 6-7% 10-11%
Diesel 10-12% 13-14% 13-14% 12-13% 12-14% 12-13%
Aggregates 6-7% 18-20% 18-20% 16-17% 11% 16-17%
Cement, Steel & Other Materials 3-4% 5-6% 5-6% 10-12% 10-14% 10-12%
Bitumen 12-13% 15% 15% 13-15% 13-14% 13-15%
Profit including Overheads 20% 18% 18% 20% 25% 20%
Total 100% 100% 100% 100% 100% 100%
Average Cost (on project worth INR 100)*

Diesel 11.0 13.5 14 11 13 12.5
Bitumen 12.5 15.0 15.0 12.5 13.5 14.0
Cement, Steel & Other Materials 3.5 5.5 5.0 11.0 12.0 11.0
Total Average Cost 27.0 34.0 34.0 34.5 38.5 37.5
Increased Cost (on project worth INR 100)#

Diesel 11.6 14.2 14.7 11.6 13.7 13.2
Bitumen 14.7 17.6 17.6 14.7 15.9 16.4
Total Increased Cost 30.0 37.7 37.7 38.1 42.4 41.4
Increase in Cost (on project worth INR 100)

Diesel 0.6 0.7 0.7 0.6 0.7 0.7
Bitumen 2.2 2.6 2.6 2.2 2.4 2.4
Total Increase in Cost 3.0 3.7 3.7 3.6 3.9 3.9
Assuming 20% significant diesel works would have
happened viz. Aggregate production, Earthwork
2.4 3.0 3.0 2.9 3.2 3.1
etc. Hence increase will impact balance 80% of
works
Escalation available about 5% average = 3% + 0.4X
WPI, WPI-Average 4.5%. Or 70% WPI + 30% CPI for 5.0 5.0 5.0 5.0 5.0 5.0
HAM. Ballpark it will come to 5-6% on an average
Net Impact -2.6 -2.0 -2.0 -2.1 -1.8 -1.9
Net Impact (bps) on EBITDA margins -258.5 -201.1 -202.1 -213.3 -184.9 -186.1
Source: RBI, HSIE Research
WPI index as on June 30, 2022
*Average range for the selected companies
#Multiplied escalation by 0.5x to factor in the averaging on costing as new orders would have won factoring higher commodities prices
Page | 13
Story so far…
Robust awarding; sluggish execution
In FY22, NHAI & MoRTH  In order to increase the interest of the private players in the public-private
awarded 12,731 kms partnership (PPP) model, GoI introduced the HAM model and NHAI started
awarding projects under HAM from 27 January 2016. In FY22, the NHAI and
EPC order constituted MoRTH have awarded as many as 127 projects spanning into 12,731 km (+21.6%
45%, with HAM at 44% YoY). Out of these 127 projects, 62 (49%) were HAM projects, while 63 (50%) were
and 1% of the OB was EPC projects and balance 1% were BOT projects. However, due to labour shortage
BOT orders and delayed payments from government and other funding issues, execution was
slower in the fiscal. The average road constructed in FY22 fell to 28.6 km per day
During the year, NHAI & vs. 36.4 km per day in FY21.
MoRTH constructed 10,457
kms, averaging 28.6km per
 The capacity of National Highways in terms of handling traffic (passenger and
goods) needs to keep pace with economic growth. India has the second-largest
day
road network in the world of about 6.2 million km (as of 31 March 2021) comprising
national and state highways and urban and rural roads. National highways
account for 2% of the total road network and carry over 40% of total traffic.
Ashoka, DBL, GR Infra,
HG Infra, KNR, and PNC  India has a well-developed framework for Public-Private-Partnerships (PPP) in the
stand to benefit from highway sector. The Asia Development Bank ranked India at the first spot in PPP
outlays on NH operational maturity and also designated India as a developed market for PPPs. In
the last seven years, the length of national highways for which the Ministry of Road
Transport & Highways, Government of India, is responsible has gone up by more
than 50%, from 91,287 km (2013-14) to around 1,41,000 km at present.
Exhibit 25: Total road (NHAI + MoRTH) awarding and completion trend – km
Km awarded Km completed Km/day
20,000 36.7 40.0

29.8 35.0
28.0 28.6
26.9
15,000 30.0
22.7
25.0
10,000 16.6 20.0
12.1 12.4
15.0
5,000 10.0
10,098
10,885
10,467
10,457
15,948
17,055
10,237
13,394
12,731
4,510
8,301
5,470
4,400
7,972
6,067
9,829
8,948
3,620
5.0
0 0.0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: PIB, MoRTH, HSIE Research
Exhibit 26: National Highways (Km in 000’s)

160
136 141
140 133 133
127
114
120
98 101
100 91
80
60
40
20
0
FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: PIB, MoRTH, HSIE Research
Page | 14
Exhibit 27: NHAI awarding and completion trend–km

Km awarded Km completed Km/day
In FY22, NHAI awarded
8,000 14.00
6,036 kms against the target 11.48 11.85
7,000 10.90 12.00
of ~5,500 kms
6,000 8.41 9.26
10.00
5,000 7.20
Surpassing its FY21 and 5.45 8.00
4,000
FY22 awarding targets, 5.21
6.00
3,000 4.11
NHAI is expected to achieve
4.00
its targets for coming years 2,000
1,726
1,901
3,067
1,501
4,344
1,988
4,335
2,628
7,396
3,071
2,222
3,380
3,211
3,979
4,788
4,192
6,306
4,325
as well 1,000 2.00
0 0.00
We estimate that NHAI will FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
award ~5,500-6,500 kms in Source: NHAI, MoRTH, HSIE Research

FY23
Exhibit 28: Historical NHAI awarding target vs. actual trend
Km awarded Target % awarded
16,000 140.0
114.7
14,000 106.4 120.0
12,000
100.0
78.6 82.0
10,000 74.0
80.0
8,000 53.5
60.0
6,000 37.0
28.9 40.0
4,000
15,000
10,000
3,900
4,344
5,300
4,335
7,396
6,000
3,211
6,000
4,788
4,500
6,306
5,500
3,067
2,000 2,222 20.0
0 0.0
FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22
Source: NHAI, HSIE Research
NHAI HAM orders

 After a muted start, the NHAI awards strongly picked up after the state election in
Mar-22 (INR 361bn project awards, Q4FY22 - INR 586bn, FY22 - INR 1.2trn (-8%
YoY). In FY22, NHAI awarded 62 HAM projects worth INR 644.6bn (L1) to 30
players. Of these 30 players, eight were listed, with total projects worth INR
294.1bn (L1), whereas the balance 22 players were unlisted, who won orders worth
INR 350.5bn (L1). This allowed EPC players to refill their order books and get
closer to the annual order inflow guidance. FY22 saw heightened competitive
intensity with unlisted companies dominating bid wins. Since the introduction of
HAM model/project awarding, bid cost vs. NHAI premium decreased in FY22,
indicating that HAM bidding is now moving closer to EPC bidding. With robust
ordering towards the end of Mar 2022, competitive intensity decreased with (1)
reduction in number of bidders and (2) narrowing of L1 and L2 bids. The NHAI’s
extension of monthly bill payment and lower bank guarantee relaxation until Oct-
22 end shall benefit the sector as a whole. Roads EPC players are largely insulated
from rising crude and commodities prices, owing to the cost pass-through nature
of projects.
Page | 15
Exhibit 29: State-wise FY22 NHAI large awards (L1)

States (INR bn) BOT EPC HAM Grand Total % Total
Punjab - 81.2 117.1 198.3 18%
Maharashtra 40.3 9.4 88.4 138.1 12%
Uttar Pradesh - 25.1 78.7 103.8 9%
Kerala - 30.7 67.3 98 9%
Tamil Nadu - 56.6 23.1 79.7 7%
Delhi - 72.3 - 72.3 7%
Chhattisgarh - - 56.2 56.2 5%
J&K - 25.1 17.1 42.2 4%
Gujarat - 31.1 10 41.1 4%
Karnataka - 24.7 14.4 39.1 4%
Andhra Pradesh - - 31.5 31.5 3%
Others - 68.1 140.8 208.9 19%
Grand Total 40.3 424.3 644.6 1109.2 100%
Total % 4% 38% 58% 100%
During Q1FY23, NHAI awarded nine HAM projects with a total length of 329.2 kms at
L1 cost of INR 105bn vs. NHAI cost of INR 98bn and one EPC project at L1 cost of INR
7.3bn vs. NHAI cost of INR 7.7bn.
NHAI is planning to award ~500 kms (8% of 6,500 km target) through the BOT mode.
It may also give a minimum toll revenue guarantee to make it easier for contractors to
bid for BOT projects.
The emphasis on BOT is aimed at reducing the authority’s burden on financing
highway projects, currently being built more on HAM and EPC. For BOT projects, the
government does not pay for the construction cost, the developer recoups investment
by collecting toll on the stretch for the entire concession period, typically 20-30 years.
For an attractive stretch, developers often offer premium to the authority as well.
Bid pipeline continues to remain strong

We may witness record awarding in FY23-24, after delay in BMP Phase-I
 In her budget speech for 2022-23, Finance Minister Nirmala Sitharaman said
national highways will be expanded by 25,000 kms in FY23. This target will be met
under the PM Gati Shakti National Master Plan, under which the government will
have to provide connectivity to all the economic nodes in the country.
 Furthermore, the government had, in October 2017, approved the phase-I of the
highway construction under the Bharatmala Pariyojana (BMP). The aggregate
length of 34,800 kms was proposed to be completed by FY22. This deadline now
stands extended to FY27 as only ~22% of target has been achieved until FY22.
 The delay was majorly attributable to disruptions caused by the COVID pandemic,
farmer agitation, and supply of labour.
 The intense bidding may also make up for the weak momentum over the past
years. We expect the Bharatmala Programme Phase 1 – 34,800km (BMP-1) to be
awarded by FY24 and completed by FY27.
 Government has already started working on BM-2 comprising 41,800 kms. Here,
the ordering may happen in smaller phases within BM-2, with BM-2-Phase 1 being
pegged at c.8,000km and INR 3.68trn project cost. Overall balance projects cost to
be awarded is INR 7.7trn. This will increase as more phases of BM-2 get
implemented. DPRs are being prepared and project by project approvals will be
taken. This is mostly covering the green field expressways.
Page | 16
Large portion of awarding to unlisted companies

Unlisted companies aggressive, listed remain conservative
Given the fact that a large number of companies remain privately held, unlisted
Unlisted players that bagged companies took away the lion’s share in FY22 with 53% market share for HAM
HAM orders in FY22 (53% projects. We have observed that bidding intensity has increased, with L1 to NHAI cost
market share) accounted for spread decreasing from 23.2% in FY20 to -2.6% in FY22. Furthermore, bids from the
67/65/54/40% market share in top-12 companies are 5.4% lower than the NHAI cost whereas bids from top-6 listed
FY21/20/19/18. New players companies are 6.5% lower than the NHAI cost, while bids from the top-6 unlisted
have steadily entered the companies are 2.9% lower than the NHAI cost. Time series data over FY18-22 shows
unlisted space as incumbents unlisted players’ bidding premium to NHAI cost has seen higher compression vs.
focus on execution of projects listed.
won
Diversified companies gain more
Although the NHAI ordering has been robust with EPC orders at INR 450bn, HAM
orders at INR 644bn+, and BOT orders at 37bn, unlisted companies gained traction due
to easing qualification criteria. Moreover, with increased competitive intensity and
increased number of companies, the success ratio for listed companies has gone down.
Further, EBITDA was impacted by 150-200bps on account of either projects completing
with a delay or on time, which reduced profitability.
The average order book to bill
ratio is ~3 years, providing Exhibit 30: Order inflow vs. guidance (INR bn)
good revenue visibility. OI
OI OI/Guidance OB as on FY22 Book to
Company Name guidance L1
FYTD23 (%) Jun'22* Revenue bill (x)
for FY23
Ashoka Buildcon 105 25 6 24% 154 46 3.3

Dilip Buildcon 120 61 - 51% 252 90 2.8
GR Infra 150 - 71 0% 176 79 2.2
HG Infra 100 50 - 50% 115 36 3.2
KNR 30 - 8 0% 94 33 2.9
PNC 100 - - 0% 205 63 3.2
Source: Company, HSIE Research
*The order book as on Jun’22 is inclusive of L1 orders
Enhanced competition among road developers

The NHAI made changes in the model concession agreement (CA), vide letter dated
10 November 2020, post which, there has been a surge in private player’s interest,
especially the mid-sized companies. After the NHAI reduced the bid eligibility criteria
like eased minimum net worth requirement, waiving of earnest money and bid
security, we observed the space becoming overcrowded with unlisted companies,
undercutting their listed peers. The number of companies winning the bids has
changed from 24 in FY18 to 15, 13, 36 and 30 for FY19, FY20, FY21 and FY22
respectively.
Page | 17
Exhibit 31: Market share of infra developers in HAM projects

Total Listed (%) Total Unlisted (%)
80
65.22 67.27
70
60 54.41 53.13
50 40.41
40
59.59 45.59
30 46.87
34.78 32.73
20
10
0
Exhibit 32: L1 to NHAI cost spread – all companies Exhibit 33: L1 to NHAI cost spread of top-12 companies
Average NHAI Cost Average L1 cost Spread - RHS Average NHAI Cost Average L1 cost Spread - RHS
1,400 23.2% 25.0% 1,200 30.0%

25.5%
1,200 18.8% 18.7% 22.4% 25.0%
20.0% 1,000 19.9%
20.0%
1,000
15.0% 800
9.9% 15.0%
800
10.0% 600 7.7% 10.0%
600
5.0%
5.0% 400
400 0.0%
-2.6% -5.4%
200 0.0% 200
-5.0%
0 -5.0% 0 -10.0%
Exhibit 34: L1 to NHAI cost spread of top-6 listed Exhibit 35: L1 to NHAI cost spread of top-6 unlisted
companies companies
Average NHAI Cost Average L1 cost Spread Average NHAI Cost Average L1 cost Spread
500 17.8% 17.1% 0.2 700 0.4

18.0%
0.15 600 29.4% 32.7%
400 0.3
6.8% 500
0.1 22.2%
300 400 11.5% 0.2
0.05
200 300 0.1
0
200
100 -6.5% -2.9% 0
-0.05 100
0 -0.1 0 -0.1
Page | 18
Exhibit 36: While listed companies contributed 47%...

Market Share (%) FY18 FY19 FY20 FY21 FY22 L1/Cost (%)
As we can see from exhibit,
Ashoka Buildcon 9.15 7.08 7.26 - 1.58 -15.5
the share of listed companies
DBL 19.72 6.80 - 16.68 6.47 -6.9
was substantially high in
KNR 5.94 4.75 - 4.60 1.52 13.0
FY22. A part of the reason is
PNC 1.66 6.09 17.97 1.49 11.37 -16.5
that one of the largest
GR Infra 4.43 5.54 7.63 5.46 12.79 -0.5
players, GR Infra, got listed
HG Infra 0.83 4.93 1.91 1.61 3.95 7.6
in FY22. Others 17.86 10.40 - 2.90 9.18
Total Listed (%) 59.59 45.59 34.78 32.73 46.87
Market share of unlisted Total Award (INR bn) 622 149 214 737 644 -
companies was substantially Source: HSIE Research
high as most players in the
sector are unlisted. Multiple Exhibit 37: Major unlisted companies took away lion’s share
unlisted companies can boast Market Share (%) FY18 FY19 FY20 FY21 FY22 L1/Cost (%)
of strong balance sheets, bid Adani 1.50 25.41 38.47 3.19 - -
appetite, and regional APCO 4.01 - - 4.19 - -
advantage Ceigall - - - 1.00 4.61 4.0
DRA 1.91 - 3.33 1.98 2.38 -11.9
Gawar 2.19 - - 7.67 0.80 -3.6
Megha - - 4.36 8.51 9.99 -3.4
Others 30.79 29.00 19.06 40.73 35.36
Total Unlisted (%) 40.41 54.41 65.22 67.27 53.13
Note: GR Infra got listed on July 19, 2021. With GR Infra classified as unlisted company till FY22, the
market share of unlisted companies would have been 63/63/40/61/66% for FY18/FY19/FY20/FY21/FY22
respectively.
Exhibit 38: Equity requirement as a % average net worth

L1 cost Avg. Equity Avg. Equity
Company Net Worth
FY22 FY21 Requirement requirement as a %
(INR mn) FY22
Some of the larger players in A B C = (A+B)/2*12% of Net worth
the unlisted space include ABL - 9,877 593 30,067 2.0%
Megha Engineering, Gawar APCO 36,675 - 2,201 14,514 15.2%
Infra, DRA, Monte Carlo, DBL 1,45,907 40,537 11,187 39,172 28.6%
Ceigall, etc. GR Infra 47,767 80,065 7,670 36,044 21.3%
HG Infra 14,048 24,727 2,326 10,322 22.5%
We believe most of these Gawar 67,115 4,993 4,326 22,095 19.6%
players have headroom on KNR 40,278 9,543 2,989 18,678 16.0%
their balance sheets to bid PNC 13,065 71,197 5,056 29,085 17.4%
Megha 74,497 62,552 8,223 1,59,369 5.2%
for more projects and are
Ceigall 8,748 28,837 2,255 3,048 74.0%
likely to see major wins on
DRA 17,290 14,888 1,931 7,770 24.8%
the back of a robust bid
pipeline in FY23/FY24
Page | 19
Value unlocking through InviTs

We have observed that, in FY22, developers within our coverage universe bid for
NHAI HAM projects at very competitive prices. Aggressive bids (lower O&M quote,
bid cost) may have to take a haircut. Refinancing of the projects may also be
challenging for some of the developers, as not all projects attract a premium valuation.
However, companies like GR Infra and DBL were very successful in monetising their
HAM assets in the past due to the quality and durability of the project stretches.
However, the structure of HAM is such that post achieving commercial operation date
(COD), most of the risks are mitigated, to a great extent. There is no project execution
risk, cash flow risk is minimal due to a strong counterparty–NHAI (rated AAA), and
interest rate risk mitigated to an extent due to inflows and debt repayments both linked
with MCLR. The attractiveness of higher yield/relatively lower risk of AAA backed
asset will not be a limiting factor for fund availability.
With NHAI ordering ramping up in FY23/24, we expect companies to execute the
awarded projects by FY25/26. Going ahead, we believe that select companies will
unlock value by monetisation of assets via the InviT route.
Exhibit 39: Recent deals (INR mn)

Total
Equity P/BV
Company Projects portfolio Investor Date/ Month Equity Debt Deal EV
Value (x)
Invested
KNR Shankarampet
KNR Constructions Cube Highways Dec-2021 1,268.1 1,462 1,461.7 1.61
Projects Private Ltd
KNR Tirumala Infra Pvt
KNR Constructions Cube Highways Dec-2021 1,616.8 - 1,929.8 1.19
Ltd
KNR Chidambaram Infra
KNR Constructions Cube Highways Feb-19 232.1 - 364.6 1.57
Private Ltd
KNR Srirangam Infra
KNR Constructions Cube Highways Jan-19 894.7 - 1,111.8 1.24
Private Ltd
80,000-
Welspun Group 6 road assets Actis Jan-22 - - - -
1,00,000
90,000-
Brookfield - CPPIB Apr-22 60,000 30,000-32,000 -
95,000
Ashoka Buildcon 5 BOT toll assets KKR Dec-21 - - - 13400 -
24.86%/16.94% stake in
IRB Infra Cintra/Bricklayers Dec-21 74,490 93,000 1,67,490 53,500 0.72
the company
5 toll road and 2 annuity
GIP KKR Jul-21 - - - - -
road assets
Ontario Teachers’
KKR 12 road assets Apr-22 - - - 13,300 -
Pension Plan Board
Dilip Buildcon 10 HAM Projects Shrem InviT Dec-21 2,550 40,349 - 6,165 2.42
Edelweiss Infrastructure
Larsen & Toubro Eight Operational Assets Jul-22 - - - 7,000 -
Yield Plus
Average 1.49
Source: VCC edge, HSIE Research
Page | 20
Bidding analysis
Ashoka Buildcon
In FY22, ASBL bagged one HAM project from the NHAI at a premium of -15.5% over
the NHAI cost. The OB stood at INR 137.3bn at the end of Mar-22; including order wins
of Q1FY23, OB stands at INR 146.3bn (3.2x FY22 revenue). ASBL has received INR 98bn
order inflow until now since the start of FY22. Order inflow in FY23 is expected to be
more than INR 100bn. In FY22, ASBL was not declared L2 for any projects.
Bidding Summary Bidding Analysis L1

L1 Premium on NHAI cost L2 Premium on NHAI cost NHAI cost (INR mn) L1 Bid (INR mn)
L1 Premium on NHAI cost
L3 Premium on NHAI cost 14,000 40.0%
60.0% 28.5%
12,000
45.9% 43.2% 10,000 12.3% 16.6%
40.0% 20.0%
15.4%
8,000
12.3% 16.6%
20.0% 28.5% 6,000 0.0%
0.0% 0.0%
21.4% 37.7% 4,000
0.0% 0.0% -15.5%
2,000
0.0% -15.5%
-20.0% - -20.0%
Bidding Analysis L3
Bidding Analysis L2
NHAI cost (INR mn) L1 Bid (INR mn)
NHAI cost (INR mn) L1 Bid (INR mn) L3 Bid (INR mn) L1 Premium on NHAI cost
L2 Bid (INR mn) L1 Premium on NHAI cost

45.9% 43.2%
37.7% 18,000
15,000 40.0% 15,000 40.0%
12,000 21.4% 30.0% 12,000
9,000 15.4% 9,000
19.3% 20.0% 20.0%
6,000 15.8% 6,000 17.3% 18.2%
13.2% 10.0%
3,000 3,000
- 0.0% 0.0% 0.0% - 0.0% 0.0% 0.0% 0.0%
Order missed (as a percentage of L2 over L1 cost)

INR mn 1% 2% 3% 4% 5% Total
FY18 - 17,354 - - - 17,354
FY19 - 9,564 - - - 9,564
FY20 - - - - - -
FY21 - - - - - -
FY22 - - - - - -
Total - 26,918 - - - 26,918
Page | 21
Dilip Buildcon
In FY22, DBL has won three HAM projects at a BPC of -6.9% over the NHAI cost. It lost
four HAM projects in FY22 worth 51.7bn, as the average L1 cost for these projects was
14.6% lower than the NHAI cost whereas DBL’s bid for the projects was an average
BPC of 9.8% lower than the NHAI cost. Of these four projects, DBL lost two projects
by a margin of just 1%, where cumulative BPC was INR 24.6bn. The OB, as of Mar-22,
stood at INR 256bn, with INR 78bn worth of order inflows in FY22. 58% of the OB
comprises road projects. DBL has won two HAM projects worth INR 29bn since Apr-
22. The total NHAI bid pipeline stands at INR 400bn, with HAM/EPC share at 50/50%.
During the year, DBL witnessed intense competition in HAM and EPC both. It
participated in 105 projects in FY22, of which it won only five. However, in the recent
bidding, the competition has slightly reduced. FY23 order inflow is expected at INR
80-100bn.

L1 Premium on NHAI cost L2 Premium on NHAI cost
18,000 20.0%
60.0%
16.9% 15.9%
40.8% 15,000
40.0% 18.5%
12,000 4.4% 10.0%
19.3% 16.9% 21.5%
37.4% 16.3% 9,000
20.0%
9.6%
2.5% 6,000 -6.9% 0.0%
0.0% 0.0% 15.9% 0.0%
4.4% 0.0% 3,000
-9.8% -6.9%
-20.0% - -10.0%
Bidding Analysis L2 Bidding Analysis L3

NHAI cost (INR mn) L2 Bid (INR mn) NHAI cost (INR mn) L1 Bid (INR mn)
L2 Bid (INR mn) L2 Premium on NHAI cost L3 Bid (INR mn) L1 Premium on NHAI cost
40.8%
15,000 45.0% 12,000 40.0%
12,000 19.3% 18.5% 30.0% 19.2%

37.4%
16.3% 9,000 14.1% 20.0%
9,000 29.3% 15.0%
6,000 3.2% 21.5%
18.1% 0.0%
6,000 14.3% 12.4% -9.8% 0.0% 9.6% -9.1% 0.0%
3,000 2.5%
3,000 -15.0% 0.0%
-14.6%
- -30.0% - -20.0%

INR mn 1% 2% 3% 4% 5% Total
FY18 22,724 8,987 27,762 8,517 - 67,989
FY19 10,791 - - - - 10,791
FY20 - - - 8,772 8,772
FY21 16,316 - - - 13,363 29,680
FY22 24,550 - - - - 24,550
Total 74,381 8,987 27,762 17,288 13,363 1,41,781
Page | 22
GR Infraprojects
GRIL was one of the relatively less aggressive bidder in FY22. It won eight HAM
projects at a BPC of -0.5% of the NHAI cost. It lost six HAM projects in FY22 worth INR
70.9bn as the average L1 bids were at 4.9% above the NHAI cost whereas it bid at 8.5%
above the NHAI cost. Of these six projects, GRIL lost one/one/two projects with a
margin of 1/2/3%, where the cumulative BPC was INR 11.9/9.8/22.6bn. The OB stood
at INR 131bn in Mar-22 (vs. INR146bn in Dec-21). With L1 of INR 70.9bn, the OB stood
at INR 201.9bn. OI guidance for FY23 is INR 150bn, with INR 100/50bn in road/non-
road segments. GRIL expects appointed date for all eight HAM projects by Q3FY23.
Bidding Summary Bidding analysis L1

40.0% 24,000
32.2% 21,000 32.2%
27.9% 26.3% 30.0%
30.0% 28.4%
23.9% 18,000
19.1% 19.6% 17.9%
20.0% 15,000
8.9% 15.0%
17.9% 12,000 2.4% -0.5%
10.0% 8.9% 10.7% 9,000
2.4% 8.5% 0.0%
6,000
0.0%
1.9% 3,000
0.0% -0.5%
-10.0% - -15.0%
Bidding analysis L2 Bidding Summary

NHAI cost (INR mn) L1 Bid (INR mn) L1 Premium on NHAI cost L2 Premium on NHAI cost
L2 Premium on NHAI cost 40.0%
21,000 30.0% 32.2%
19.1% 19.6% 30.0% 27.9% 26.3%
18,000 23.9% 28.4%
15,000 15.0% 19.1% 19.6%
20.0%
12,000 8.5%
0.0% 15.3% 17.9%
9,000 1.9% 10.0% 8.9% 10.7%
8.5%
6,000 0.0% 2.4% 8.5%
-1.8% 4.9%
3,000 0.0% 0.0%
1.9% -0.5%
0.0%
- -15.0%
-10.0%

INR mn 1% 2% 3% 4% 5% Total
FY18 9,518 9,374 - - - 18,892
FY19 - - - - - -
FY20 - - - - - -
FY21 - - 17,028 - 9,300 26,328
FY22 11,878 9,772 22,600 - - 44,250
Total 21,396 19,145 39,629 - 9,300 89,470
Page | 23
HG Infra
During FY22, HG Infra won two HAM projects at a BPC of 7.6% over the NHAI cost.
It lost four HAM projects in FY22 worth INR 50.3bn, as the average L1 was 3.1% over
the NHAI cost whereas HG Infra bid at 7.3% above the NHAI cost. Of these four
projects, HG Infra lost one project each with a margin of 1%/5% and BPC of INR
14.7/11.2bn. With OI of INR 43.3bn (vs. guidance of INR 50bn), the OB stood at INR
79.7bn (the highest-ever) at the end of Mar22. HG has given an order inflow guidance
of INR 90-100bn for FY23. The appointed date (AD) for all five new HAMs is expected
to be received by H1FY23.


45.0%
35.7% 12,000 35.7%
30.6% 30.6% 30.0%
30.0% 9,000
16.5%
13.8% 6,000
18.9% 16.5% 15.0%
15.0% 7.6% 13.8%
17.7%
3,000
13.5% 7.6%
6.5% 0.0% 0.0% 7.3%
0.0%
- 0.0%
Bidding Analysis L2 Order missed (as a percentage of L2 over L1 cost)

NHAI cost (INR mn) L1 Bid (INR mn) INR
1% 2% 3% 4% 5% Total
L2 Bid (INR mn) L1 Premium on NHAI cost mn
L2 Premium on NHAI cost FY18 - - - 13,635 - 13,635
15,000 30.0%
FY19 - - - - - -
12,000 FY20 - - - - - -
17.7%
9,000 13.5% FY21 17,999 - - - - 17,999
15.0%
6,000 FY22 14,674 - - - 11,185 25,859
12.9% 8.1% 7.3%
3,000 Total 32,673 - - 13,635 11,185 57,494
3.1%
- 0.0% 0.0% 0.0%
Page | 24
KNR
KNR has won one HAM project at a premium of 13% over the NHAI cost. It also lost
a HAM project in FY22 worth INR 14.6bn, as the L1 bid was at 21% over the NHAI cost
while KNR bid was at 23.4% over the NHAI cost. The OB stands at INR 90bn (~2.8x
FY22 revenue), excluding one HAM project worth INR 7.7bn that is not included in the
OB yet. Captive (HAM project) works constitute 49% of the OB whereas state/Central
government orders constitute 38/10%. Geographically, the OB is diversified in
southern India with Karnataka/Kerala/TN/AP/Telangana contributing
16/36.3/18/29.7%. Business segment-wise, irrigation/HAM/roads (others) account for
23%/49%/28% of the OB. OI for FY23 is pegged at INR 40-50bn.

60.0% 54.0% 21,000
41.5% 18,000 19.6%
45.0% 20.0%
33.0% 42.6% 15,000
12,000 13.0%
17.9% 10.9%
30.0% 28.5%
23.7% 9,000
17.3% 22.7% 10.0%
15.0% 13.0% 6,000 3.7%
3.7% 19.6% 3,000 0.0%
10.9% 0.0%
0.0% - 0.0%

54.0%
18,000 60.0% 18,000 60.0%
41.5%
15,000 42.6% 15,000 33.0%
23.7% 40.0%
12,000 40.0% 12,000 17.9%
28.5% 32.8%
9,000 22.7% 9,000 20.0%
17.3% 23.5% 0.0%
6,000 32.4% 20.0% 6,000 9.2% 0.0%
3,000 22.9% 21.4% 3,000 -1.2% 0.0%
7.8% 16.6%
- 0.0% - -20.0%

INR mn 1% 2% 3% 4% 5% Total
FY18 16,037 - 18,370 - - 34,407
FY19 - 12,736 - - - 12,736
FY20 9,469 - - - - 9,469
FY21 17,846 - 21,760 - - 39,606
FY22 - 14,577 - - - 14,577
Total 43,352 27,313 40,130 - - 1,10,795
Page | 25
PNC
In FY22, PNC bagged six HAM projects from NHAI at a premium of -16.5% over NHAI
cost. It also lost two HAM projects in FY22 worth INR 25bn, as L1 bids were lower by
9% as compared to NHAI cost while PNC bid was 6.2% lower than the NHAI cost. Of
these two projects, PNC lost one project with a margin of 1% where the BPC was INR
14.2bn. OB, as of Mar-22, stood at INR 146.6bn. With the EPC value of seven HAM
projects awarded in Q1FY23, the OB stands at INR 210bn. Of these seven, 80% RoW is
available for five HAM projects. The AD for all the seven projects is expected by
Q3FY23. Road EPC constitutes 44% of the OB. PNC expects an order inflow of INR 80-
100bn in FY23.

18,000 22.9% 22.0% 30.0%
30.0% 22.9% 22.0% 18.1%
18.1% 15,000 15.3%
15.3%
18.4% 15.0%
15.0% 23.2% 12,000
18.9% 19.0% 11.2%
0.0% 0.0% 0.0% 0.0% 9,000 0.0%
6,000 -16.5%
-15.0% -6.2% -15.0%
3,000
-16.5%
-30.0% - -30.0%
Bidding Analysis L2 Order missed (as a percentage of L2 over L1 cost)

NHAI cost (INR mn) L1 Bid (INR mn) INR
1% 2% 3% 4% 5% Total
L2 Bid (INR mn) L1 Premium on NHAI cost mn
L2 Premium on NHAI cost FY18 10,064 - - - - 10,064
24,000 23.2% 30.0% FY19 - - - - - -
21,000 18.9% 19.0%
18,000 17.9%
FY20 20,283 - - - - 20,283
15,000 15.0%
17.5% 15.1% FY21 - - 24,535 - - 24,535
12,000
9,000 FY22 14,245 - - - - 14,245
-6.2% 0.0%
6,000 Total 44,592 - 24,535 - - 69,128
0.0%
3,000
- -9.0% -15.0%
Page | 26
Megha
In FY22, Megha engineering bagged seven HAM projects from NHAI at a premium of
-3.4% over NHAI cost. It also lost nine HAM projects in the year worth INR 107bn, as
the L1 bids were at a premium of 1.2% over the NHAI cost, whereas Megha bid at a
premium of 6.3% over the NHAI cost. Of these nine projects, it lost one project each
with a margin of 1/3/4% where the BPC was INR 10.8/15.9/12.1bn. It lost two projects
with a margin of 2% where the BPC was INR 29.2bn.
21,000 45.0%
45.0% 18,000 34.8%
30.0%
34.8% 37% 15,000
24.3%
30.0% 24.3% 12,000
16% 15.0%
9,000
15.0%
9% 6,000
0.0%
6.3% -3.4%
0.0% 3,000
-3.4% - -15.0%
-15.0%

NHAI cost (INR mn) L1 Bid (INR mn) NHAI cost (INR mn) L1 Bid (INR mn)
L2 Bid (INR mn) L1 Premium on NHAI cost L3 Bid (INR mn) L1 Premium on NHAI cost
15,000 30% 15,000 45%
37%
12,000 12,000
16% 30%
9,000 9,000
15%
6,000 15.6% 6,000
6.3% 22.9% 15%
9%
3,000 3,000
1.2% 1.3%
- 0% - 0%

INR mn 1% 2% 3% 4% 5% Total
FY18 - - - - - -
FY19 - - - - - -
FY20 - - - - - -
FY21 23,885 - - - - 23,885
FY22 10,846 29,185 15,867 12,079 - 67,977
Total 34,730 29,185 15,867 12,079 - 91,861
Page | 27
Region-specific bids–too much comfort may be growth dilutive

 In the below exhibit, we highlight developers focusing on their domiciled markets
for order wins. While PNC started diversifying its order book in north and south
India, companies like KNR and Ceigall have been focusing on winning NHAI
projects in south and north India respectively. HG Infra and DRA have been
Next phase of sustainable focusing on east India.
growth to come from  Whilst it is easy to manage projects in strongholds with better margins, on more
diversifying outside home extended strategic directions, they become growth dilutive. Single-segment and
markets. extensive presence in a single market make growth vulnerable once bidding slows
down. To address this, KNR has diversified into irrigation and PNC is looking at
expanding water segment while GR Infra is looking at expanding into T&D
business. In Q3FY22, Ashoka exited completely from BOT assets by selling its
entire shareholding in five BOT toll assets to KKR for INR of 13.4bn.
 DBL, GR Infra, and PNC seem to be only listed companies that are diversifying at
DBL, GR Infra, PNC and a pan-India level alongside broad non-roads mix in the order backlog. Post the
Megha have presence across segmental and regional diversification, the next step for these companies will be
India. the deleveraging of balance sheets.
 Amongst unlisted companies, Megha is bidding across regions and winning
projects.
Exhibit 40: Region-wise diversification of select companies

Order book (x) FY19 FY20 FY21 FY22
Companies N E S W N E S W N E S W N E S W
ABL - - - 1.0 - - - 1.0 - - - - - 1.0 - -
Adani - - - 1.0 0.1 - 0.7 0.2 - - - 1.0 - - - -
APCO - - - - - - - - - 0.5 - 0.5 - - - -
Ceigall - - - - - - - - 1.0 - - - 1.0 - - -
DBL - - - 1.0 - - - - - 0.1 0.1 0.8 - 0.6 - 0.4
DRA - - - - - - - 1.0 1.0 - - - - 1.0 - -
Gawar - - - - - - - - 0.4 0.6 - - 1.0 - - -
GR Infra - - 1.0 - 1.0 - - - - - 1.0 - 0.6 - 0.2 0.2
HG Infra 1.0 - - - 1.0 - - - - - - 1.0 - 1.0 - -
KNR - - - 1.0 - - - - - - - 1.0 - - - 1.0
Megha - - - - - - - 1.0 - - - 1.0 0.4 - 0.1 0.5
PNC - - - 1.0 1.0 - - - 1.0 - - - 0.8 - - 0.2
Source: HSIE Research, N – North, E – East, S – South, W - West
Page | 28
Bid-win ratio: Decent success in domiciled regions

 Larger companies with a strong regional foothold, good execution capabilities, and
balance sheet strength can maintain consistent bid-win ratios, although win
probabilities increase in the domiciled regions, owing to substantial cost and
competitive advantages.
 Among the large, listed companies, PNC enjoys the best ratios, while among the
unlisted ones, Ceigall and Megha stand out.
Exhibit 41: Region-wise yearly bid-win ratios of top-12 companies

N E S W N E S W N E S W N E S W N E S W
ABL - - 0.67 0.17 - - 1.00 - - - 0.33 - - - - - - 0.37 - -
Adani - 0.80 - - - - 0.42 - 0.13 - 0.26 0.67 - - 0.06 - - - - -
Apco 0.30 - - - - - - - - - - - - - 0.58 - - - - -
CEIGALL - - - - - - - - - - - - 0.26 - - - 0.52 - - -
DBL - - 0.49 0.23 - - 0.53 - - - - - - 0.29 0.61 0.14 - 0.21 0.23 -
DRA - - - 0.56 - - - - - - 1.00 - 0.31 - - - - 0.11 - -
Gawar 1.00 - - 1.00 - - - - - - - - 0.34 - - - 0.05 - - -
GR Infra - - - 0.29 - - - 0.50 0.27 - - - - - - 0.29 0.25 - 0.11 0.26
HG Infra 0.74 - - - 1.00 - - - 1.00 - - - - - 0.15 - - 0.47 - -
KNR - - 0.28 - - - 0.09 - - - - - - - 0.08 - - - 0.08 -
PNC 0.26 - - - - - 1.00 - 0.70 - - - 0.46 - - - 0.40 - 0.60 -
Megha - - - - - - - - - - 1.00 - - - 0.36 - 0.23 - 0.24 0.22
Page | 29
Exhibit 42: Major FY22 HAM awards

Project
Leaving aside some stray L1 / Cost L2/L1 L3/L1
Project cost L1 L2, L3
(%) (%) (%)
bids, HAM L1s were lower (INR Bn)
Six-lane Greenfield highway from
than the NHAI cost 17.7 -18.7% 1.4% 7.3% PNC DBL, NCC
Badadal to Maradgi Andola (Pckg-2)
Expressway from Pathankot
16.9 5.3% 5.5% 8.0% Megha GR Infra, PNC
We have seen quite a few Gurdaspur to DAK expressway
4 laning Narimbanglo - Jatinga KMV Projects,
bids at even 10-20% 16.9 -11.9% 6.7% 18.7% DRA
junction Harangajo (balance work) GR Infra
discount to NHAI cost. 4/6 lane access-controlled
This round seems to have expressway from Hiranagar road
16.6 2.9% 6.0% 6.6%
Vishwa HG Infra,
near Gurha Baidaran to Jammu Ring Samudra IRCON
greater competitive
Road
intensity. 4 laning of Sonauli Gorakhpur 16.1 -14.0% 10.0% 10.8% PNC DBL, DRA
PNC,
Six-lane access controlled greenfield
Top-6 listed companies bid highway from Maradgi Andola to 16.1 -11.9% 0.6% 5.6% DBL
Shankaranaraya
na
at 5.4% lower than the Baswantpur
Constructions
NHAI cost whereas their Six-lane Kanpur Lucknow
16.0 -14.1% 11.0% 17.7% PNC Apco, GR Infra
unlisted counterparts bid Expressway (Pckg-II)
6 laning from Kodungallur to Megha, Vishwa
at 2.9% lower than the 15.6 -1.2% 3.1% 5.1% OSE
Edapally section Samudra
NHAI cost. Manakondur bypass to Palvelpula
15.4 -3.1% 2.2% 3.2% DBL Megha, KMV
near Hanamkonda
Apco,
Six-lane Kanpur Lucknow Shankaranaraya
15.3 -15.8% 11.6% 14.8% PNC
Expressway (Pckg-I) na
Constructions
4 laning of Madanapalle to Pileru 14.7 -0.2% 0.0% 7.3% GR Infra HG Infra, MCL
Vadodara Mumbai Expressway
14.5 -10.1% 9.4% 11.0% IRCON DP Jain, Ceigall
(Phase II-Pkg XVII)
Eight-lane Expressway (VME) Agroh Infra,
14.3 -5.0% 8.3% 12.7% Shivalaya
(AMNE-Bhoj) Phase-II Package XVI IRCON
Six-lane Kaliagura-Baunsaguar
section under Raipur- 13.4 4.9% 7.8% 10.3% HG Infra Megha, Patel
Visakhapatnam (pck 5)
4 lane greenfield Expressway from
Delhi-Vadodara near Bandikui to 13.1 -3.3% 5.9% 8.7% GR Infra Gawar, KCC
Jaipur
Development of 6-lane access
controlled Spur to Haridwar from
12.4 9.4% 2.2% 5.5% Krishna Megha, Gawar
Delhi- Saharanpur- Dehradun
Economic Corridor
Six-laning Thalikulam to
12.2 7.9% 5.6% 10.6% Shivalaya GR Infra, Megha
Kodungallur
Six-lane Sargi - Basanwahi under
Raipur Visakhapatnam Economic 12.0 -5.2% 6.1% 11.9% DBL PNC, GRIL
Corridor
Six-lane Amritsar Bathinda Krishna
11.9 8.5% 2.7% 5.8% GR Infra, Gawar
Greenfield (Ph. 1 Pkg. 3) Construction
Six-laning of Kottukulangara of Vishwa
11.8 21.4% 1.9% 7.1% KNR, GR Infra
Kollam Bypass Samudra
DBL,
Six-lane access controlled greenfield
Shankaranaraya
highway from Baswantpur to 11.7 -15.5% 0.9% 1.0% ABL
na
Singnodi
Constructions
Six-laning from Kappirikkad to
11.7 -0.3% 3.7% 9.2% Shivalaya Megha, GR Infra
Thalikulam
Kollam Bypass - Kadambattukonam 11.4 12.5% 5.7% 7.0% Shivalaya Megha, DRA
Six-lane Basanwahi - Marangpuri 11.1 -9.9% 17.4% 18.8% KMV DRA, DBL
Six-lane Amritsar‐Bathinda
Greenfield section a part of Krishna
10.8 9.4% 0.9% 1.1% GR Infra, Gawar
Amritsar Jamnagar EC in Punjab on Construction
HAM under BMP Ph‐I Pkg‐2.
Source: HSIE Research, Industry
Page | 30
Credit rating at investment grade; outlook positive

Strong case for rating upgrades
 Many NHAI HAM projects are expected to become operational in the near term.
Their credit profiles will improve significantly because of reduced implementation
risk and healthy cash flow visibility, especially those backed by strong tier-1
counterparties. This will enhance the refinancing ability of the projects.
 Operational or soon-to-become operational projects could see a sharp
improvement in credit quality, driven by structural safeguards to limit interest rate
and inflation risks, as well as annuities from strong counterparties. This will
provide an opportunity to refinance the existing debt with cheaper debt over the
next 12-18 months.
Exhibit 43: Latest credit ratings of select companies

Credit Rating
Latest Press
Company Outlook Rating Rationale
Release Date
Short-term Long-term
APCO CRISIL A1+ CRISIL A+ Positive Significant improvement in the business as well as capital structure March 31, 2022
expected to further enhance over the medium term. Revenue rose at
a CAGR of 50% over the last four years. The company has
unexecuted order book (~3x FY21 revenue) as on January 1, 2022,
healthy to support the growth trajectory over the medium term. Of
the total 31 projects in hand, 26 are already under execution, leading
to low execution risk. The operating profitability remained
comfortable at 16-18% over the last three years, despite fluctuations
in raw material prices.
Ashoka CRISIL A1+ CRISIL under The ratings was placed under watch with developing implications January 5, 2022
Buildcon AA- watch with based on announcement made by the company that Ashoka
developing Concessions Limited, a material subsidiary of ABL, has entered into
implications share subscription and share purchase agreements with Galaxy
Investments II Pte. Ltd., an affiliate of Kohlberg Kravis Roberts &
Co. L.P. (KKR), for sale of the entire share capital held in five of its
subsidiaries.
The ratings also factor in adequate financial risk profile amidst
expectation of funding support and investment in subsidiaries.
Ceigall ICRA A2+ ICRA A- Positive Significant ramp-up in its order book in the past six months to ~INR September 24,
61bn as on August 31, 2021 as compared to INR 22.5bn as on 2021
February 28, 2021, which is expected to support healthy medium-
term revenue growth. Its revenues grew at a CAGR of 48% over the
last six fiscals and stood at INR 8.7 in FY21. The company’s
profitability continues to remain robust, with an operating margin
of 18.5% in FY21 as compared to 16.3% in FY20, supported by its
focus on projects in its core geographic areas, cost-effective raw
material procurement and its ability to complete projects on-
time/ahead of schedule, among others. Other positive factors
include favourable financial profile, characterized by a conservative
capital structure, low working capital intensity, healthy coverage
indicators and strong liquidity position. Increased scale of
operations, along with sustenance of healthy profitability and low
working capital intensity is expected to result in improvement in
CIL’s financial risk profile. CIL’s current order book has sizeable
projects that are in nascent stage of execution, wherein the financial
progress has been less than 25%, which renders execution risk. The
rating also factors in the concentration of CIL’s operations on the
road segment and in certain geographies of Northern states such as
Punjab, Haryana, Himachal Pradesh and Rajasthan, among others.
The rating also considers the company’s exposure to sizeable
contingent liabilities in the form of bank guarantees, largely for
contractual performance.
Page | 31
Credit Rating
Latest Press
Release Date
Dilip CRISIL A1 CRISIL A Stable The ratings reflect the established market position of DBL, backed November 1,
Buildcon by its strong project execution capability, robust orders providing 2022
revenue visibility over the medium term, and a moderate financial
risk profile supported by its ability to monetize assets. These
strengths are partially offset by large working capital requirement
and exposure to cyclicality in the construction industry.
DRA CARE A1+ - - The rating derives strength from experienced promoters and its March 29, 2022
established presence in the infrastructure segment, operational track
record of over five decades with demonstrated execution capability
along with healthy revenue visibility marked by segmentally and
geographically well-diversified order book with limited
counterparty credit risk. The rating further derives strength from
DRAIPL’s growth in scale of operations, comfortable capital
structure, robust debt coverage indicators. The rating is also
underpinned by efficient management of its working capital
requirement despite being present in a working capital intensive
industry along with strong liquidity position marked by sizeable
amount of liquid cash and bank balances along with unutilized bank
lines. The rating favourably takes cognizance of achievement of AD
in its four under construction HAM SPVs, satisfactory project
progress thereupon along with infusion of part equity commitments
in the projects.
Gawar CARE A1+ CARE Stable Consistent improvement in the company’s financial risk profile February 21, 2022
AA- marked by the sustained growth in its scale of operations with
CAGR of 24% over the past four years ended March 31, 2021, healthy
profitability margins and low reliance on debt leading to
comfortable debt coverage metrics. Healthy outstanding order book
position with strong counterparties and diversified presence across
various states is a credit positive. The rating strengths are, however,
tempered by sectoral concentration in roads, significant equity
commitments towards HAM projects, inherent through-the-lifecycle
risks in HAM projects, including, inter alia, variability of annuities
to changes in bank rate and inflation indices, during both execution
and operation stages, innate cyclical trends associated with the
construction
sector and competitive nature of the construction industry.
GR Infra CRISIL A1+ CRISIL Stable The ratings of GRIL continue to reflect the company's established January 11, 2022
AA position in the construction industry, backed by strong project
execution capabilities, robust order flow, efficient working capital
management, and comfortable financial risk profile. These strengths
are partially offset by exposure to risks related to segmental
concentration and inherent cyclicality in the construction industry.
HG Infra ICRA A1 ICRA A+ Positive The ratings take into account the healthy growth in revenue at a December 13,
CAGR of 22% during FY18 and FY21 on the back of improved order 2021
book along with timely execution and the growth is expected to be
sustained over the medium term on the back of strong order book
position of INR 69bn as on September 30, 2021. The operating profit
margins also improved to 16.2% in FY21 and 16.3% in H1FY22 from
15.6% in FY20 supported by scale benefits and reduced dependence
on sub-contracting expenses. The working capital intensity also
improved to 7% in FY21 from 16% in FY20 with recovery of
payments from PWD in Rajasthan; the working capital intensity is
expected to remain at low levels going forward with majority of
order book comprising of HAM and EPC works from reputed
customers. The ratings also consider reduction in project risk with
three of the four under construction HAM projects expected to be
completed in FY22. The ratings, however, remain constrained by the
high consolidated TOL/TNW of 1.42 times as of March 31, 2021
owing to high mobilization advances and trade creditors. Further,
the ratings factor in sizeable equity commitment and pending
execution related risks for the HAM portfolio.
Page | 32
Credit Rating
Latest Press
Release Date
KNR CRISIL A1+ CRISIL Positive Expected revenue growth of over 15% annually in the medium term August 6, 2021
AA- while maintaining its healthy financial risk profile. Strong execution
track record along with healthy order book to revenue ratio of 4.5x
times is expected to support revenue growth. Operating income
reported a healthy growth of 20% in FY21 despite the lockdowns. This
was supported by execution of orders from the irrigation segment
which is less labour intensive work. Further, operating margin
remained at healthy levels of 20% and is expected to sustain in the
future as well.
Working capital cycle increased in FY21 largely due to high debtor
days of more than 140 days in FY21. However, this was largely from
KNRCL’s own ongoing HAM asset portfolio where the debt was
undrawn to keep the project cost low. This was a one-time impact and
debtor’s days are expected to normalize around 100 days going
forward. While the working capital requirements increased, reliance
on the debt remained low given the realization of funds from
monetization of toll project housed under KNR Walayar Tollways
Private Ltd. Financial risk profile of the company has remained
comfortable as reflected in lower TOL/ANW ratio of around 0.47
times as of March 31, 2021. KNRCL has entered in sale agreement for
sale of three of its HAM projects. Realization of sale proceeds in next
6-12 months with completion of these HAM assets this fiscal is
expected to keep the dependence on borrowing low and help
company sustain its healthy financial profile.
Megha CRISIL A1+ - - Strong and established market position in the EPC business with a January 11, 2022
track record in executing complex and large projects along with
improved diversity in its large order book size, which provides
healthy revenue visibility over the medium term. It also factors in the
company’s healthy operating efficiency and its minimal dependence
on external debt which has resulted in comfortable financial risk
profile. These strengths are partially offset by the investments made
by MEIL in unrelated businesses and group companies, susceptibility
to intense competition and cyclicality in the infrastructure and
construction industry and large working capital requirement.
PNC CARE A1+ CARE AA Stable Sustained growth in its operations over the past five years at a CAGR December 7, 2021
of 30% and its robust execution abilities amid the challenges from
second wave of Covid-19 pandemic, underscores its ability to win and
simultaneously execute large road projects. Around 64% of the order-
book of the company is from NHAI thereby precluding counterparty
risk. The ratings are also supported by PIL’s strong liquidity position
which is expected to enable the company to mobilize new work sites
without over-reliance on debt as the company executes a larger order
book, amid committed equity investments in ongoing HAM projects.
The above rating strengths, however, continue to remain constrained
by moderate level of financial support towards few SPVs in which PIL
has majority stake or substantial minority stake.
Source: Credit rating agencies, company, HSIE
Exhibit 44: Large companies, reputed auditors, no major governance lapses

Company FY17 FY18 FY19 FY20 FY21 FY22
GR Infra BSR & Associate BSR & Associate BSR & Associate BSR & Associate BSR & Associate SRBC & Co. LLP
Mukund M. Mukund M. Chitale
Mukund M. Mukund M. Mukund M. Mukund M.
Dilip Buildcon Chitale & Co and & Co and
Chitale & Co Chitale & Co Chitale & Co Chitale & Co
MSG & Associates MSG & Associates
Purushottam
Agrawal & Co and S.S Kothari Mehta S.S Kothari Mehta S.S Kothari Mehta S.S Kothari Mehta
PNC Infratech NSBP & Co.
S.S Kothari Mehta & Co & Co & Co & Co
& Co
M/s Sukumar Babu
KNR Constructions K P Rao & Co K P Rao & Co K P Rao & Co K P Rao & Co K P Rao & Co
& Co
Ashoka Buildcon M. P. Chitale & Co S R B C & CO LLP S R B C & CO LLP S R B C & CO LLP S R B C & CO LLP S R B C & CO LLP
HG Infra Engineering PwC PwC PwC PwC
Page | 33
NIP program–expansion of infra pipeline beneficial

Roads can be classified into
national highways,
for larger tier-1 Infra companies
expressways, state To recover from the unprecedented COVID-19 crisis, there is a need for elevated
highways, major district investments in the infrastructure sector. The National Infrastructure Pipeline (NIP) has
roads, and rural roads. a coverage of 9,335 projects (vs. 6,835 projects earlier) with total envisaged cost of INR
108trn from FY20-FY25. The center has budgeted its capital spending at a record high
of INR 7.5trn (+30% FY22RE), focusing on infrastructure.
National and state Source: Financial express article dated March 22, 2022.
highways constitute only
4.7% of the surfaced roads in Exhibit 45: Capex plan FY20-25
# Projects Length (km) Capex FY20-FY25 (INR trn)
India.
National Highways 1,815 87,162 12.8
Expressways 5 2,142 1.0
Total Centre 1,820 89,304 13.8
States - - 7.8
Source: NIP Report of the Task Force
About 1,820 projects have been identified, which would be implemented in 2020-25.
The total Capex for these projects by the Centre is estimated at INR 13.8trn from fiscals
We remain positive on infra 2020 to 2025. The projects include the construction of new expressways such as Delhi–
players with strong balance Mumbai Expressway, Bengaluru–Chennai Expressway, etc. Several projects being
sheet and funding lines. implemented include four-laning/ two-laning or widening of existing highways.
Exhibit 46: Capex plan FY20-25

Road Sector Investment (Rs tn) Share in total investment (%)
4.0 3.8 30%

3.6
3.5 3.3 3.3
25% 25%
3.0 20% 20% 23%
2.5 2.4 20%
2.5 18%
17%
1.9 1.9 16%
2.0 15%
15%
1.5
10%
1.0
5%
0.5
0.0 0%
FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25
 INR 1trn through asset monetisation.

 Increased use of FASTag/RFID devices to shorten wait time and plug revenue
leakages. As per the NHAI press release dated 26 February 2021, toll collection
through FASTag has seen consistent growth. The total number of FASTags issued
until 25 February 2021 stood at 28mn. The smooth implementation of FASTag has
witnessed 20% growth in terms of Electronic Toll Collection transactions and 27%
in terms of collection of user fee through FASTag. FASTag implementation has also
reduced the waiting time at NH Fee Plazas significantly, resulting in enhanced user
experience. Not only is the constant growth and adoption of FASTag by highway
users encouraging but it will also help make toll operations more efficient. It will
enable correct valuation of road asset in the future and will encourage more
investors to invest in India’s highway infrastructure.
 Reduce fatalities by 25% (fatality rate of 17 per hour).
Page | 34
Sectoral allocation and financing of NIP

Exhibit 47: Year-wise sectoral allocation of NIP
No % of
Sector (INR trn) FY20 FY21 FY22 FY23 FY24 FY25 Total
phasing Total
Power 1.6 2.3 2.2 2.2 2.3 2.1 1.4 14.1 13%
Renewable Energy 0.3 1.5 1.4 1.7 2.2 2.2 0.0 9.3 8%
Atomic Energy 0.1 0.2 0.3 0.3 0.3 0.3 0.0 1.6 1%
Petroleum & Natural gas 0.3 0.4 0.5 0.4 0.2 0.1 0.0 1.9 2%
Total Energy 2.3 4.4 4.4 4.7 5.0 4.7 1.4 26.9 24%
Roads 3.3 3.8 3.6 2.5 2.4 3.3 1.3 20.3 18%
Railways 1.3 2.6 3.1 2.7 2.2 1.7 0.0 13.7 12%
Ports 0.1 0.2 0.2 0.2 0.1 0.1 0.4 1.2 1%
Airports 0.2 0.2 0.2 0.2 0.3 0.1 0.3 1.4 1%
Urban Infra 3.0 4.6 4.0 2.3 2.2 1.6 1.4 19.1 17%
Irrigation 1.1 2.0 1.8 1.4 1.2 0.7 0.8 9.0 8%
Rural Infra 1.4 1.8 2.1 1.1 1.1 0.3 0.0 7.8 7%
Digital Infra 0.8 0.6 0.5 0.4 0.4 0.4 0.0 3.1 3%
Agriculture and Food Processing 0.0 0.0 0.0 0.0 0.0 0.0 1.5 1.5 1%
Social Infra 0.6 0.8 0.9 0.6 0.5 0.3 0.5 4.2 4%
Industrial Infra 0.2 0.4 0.4 0.4 0.2 0.1 1.4 3.1 3%
Total 14.4 21.5 21.2 16.5 15.5 13.2 9.0 111.4 100%
% of Total 13% 19% 19% 15% 14% 12% 8%
 The NIP has a front-ended investment phasing as a result of which, tangible
outputs are expected to be visible by the end of the planned five-year period. Of
this, around 79% (Central government – 39%, state – 40%) of the total investments
is expected to be contributed by public sector agencies with the balance 21% to be
met through private sector investments. Of the total plan, ~40% of the projects are
currently under implementation (include expressways, national gas grid and
PMAY-G), ~20% are under development (include urban infra, roads and
renewable energy), ~ 30% are in conceptual stages (include renewable energy
beyond FY22 and river interlinking), and the balance are unclassified (include
power sector).
Exhibit 48: Historical year-wise sectoral allocation of infra investments

Sector (INR trn) FY13 FY14 FY15 FY16 FY17 FY18E FY19E % Total
Power 2.3 2.5 2.5 2.7 3.2 2.6 1.9 31%
Roads & Bridges 1 1.1 1.2 1.4 1.8 1.9 1.9 18%
Urban 0.7 0.9 1.1 1.2 1.3 1.7 1.8 15%
Telecommunication 0.4 0.7 1.1 1.6 1.1 1 1 12%
Railways 0.4 0.4 0.4 0.8 0.9 1.3 1.4 10%
Irrigation 0.5 0.5 0.5 0.7 0.8 1 1.2 9%
Airports 0 0.1 0.1 0.1 0.1 0.1 0.1 1%
Ports 0.1 0.1 0.1 0.1 0.1 0.1 0.1 1%
Others 0.1 0.1 0 0.1 0.1 0.5 0.5 2%
Total infra investments (A) INR
5.3 6.3 7.0 8.5 9.2 10.2 10.0 56.7
trn
Nominal GDP (B) 99.4 112.3 124.7 137.6 153.6 171.0 190.1 988.7
A/B 5.5% 5.6% 5.6% 6.2% 6.0% 6.0% 5.3% 5.7%
 Centre and states were the primary funding sources for power and roads, with
moderate participation from the private sector. Telecommunication investments
were driven mainly by the private sector, while investments in irrigation sector
were predominantly made by the states. In terms of shares, infrastructure
investments between fiscals 2013 and 2019 were predominantly made by the
public sector, i.e., Centre and state governments (~70%), while the share of the
private sector has been ~30%. This split between the public and private sector is in
sync with the rest of the world.
Page | 35
Exhibit 49: Sources of funding for NIP projects

% NIP
Assumptions to projections being
financed
Centre's budgetary outlay on capital investments is
Centre's budget 18-20%
expected to be around 1.25% of GDP
State's budgetary outlay on capital investments is
State's budget 24-26%
expected to be around 1.7% of GDP
Projected to suffice for the funding requirements of
Internal accruals – PSUs 1-3%
NIP
Banks Expected to grow at an average rate of 8% 8-10%
Infra NBFCs (PFC, REC, IRFC,
Expected to grow at an average rate of 12% for public
IREDA, IIFCL and private sector 15-17%
sector NBFCs and 15% for private sector NBFCs
NBFCs)
Bond markets Expected to grow at an average rate of 8% 6-8%
Expected to grow at an average rate of 15% due to
Equity 2-4%
NIIF stepping up the pace of investments
Multilaterals/bilateral Expected to constitute half of the external aid flows 1-3%
Others 3-5%
Total 83-85%
NIP required outlay – (A) INR 111 trn
Total sources of financing– (B) 83-85%
Financing gap– (C) = A-B 15-17%
Bridging the gap -- (D)= (a)+(b)+(c) 6-8%
From new DFIs --(a) 2-3%
Asset monetisation-Centre --(b) 2-3%
Asset monetisation-States– (c) 1-2%
Shortfall-E= (C) –(D) 8-10%
 About 18-20% of the pipeline is expected to be financed through the Centre's

budget; about 24-26% is expected to be financed through the state's budget, ~31%
would be raised through debt from bond markets, banks and NBFCs; equity from
private developers, external aid multilateral and bilateral agencies and internal
accruals of PSUs would account for 4-10%. The existing sources would be able to
finance 83-85% of the capital expenditure to be incurred between fiscals 2020 and
2025. Some proportion of the financing gap can be filled through establishing of
new DFIs and using asset monetisation as a tool to monetise operational assets at
both Central and state levels.
Page | 36
Shortfall in CRIF to be met by other funding source

In the exhibit below, we have
highlighted the CRIF FY22BE The Central government cut road and infrastructure cess to INR 5/ltr on motor spirit
budget allocation to various and INR 2/ltr on high speed diesel. This shall result in total CRIF of INR c.413bn against
govt. ministries/programs. FY23BE of INR 3,142bn. This shall be made good by borrowing funds from external
sources. In the past, the government’s revised estimates (RE) have always been more
than the base estimates (BE).
Exhibit 50: Capex to be funded from CRIF over FY20-25

2017-18 (A) 2018-19 (A) 2019-20 (A) 2020-21 (A)
CRIF (INR bn)
Amount % Overall Amount % Overall Amount % Overall Amount % Overall
Ministry of Defense - 0% - 0% 22 2% 32 2%
Department of Atomic
- 0% - 0% - 0% - 0%
Energy
Ministry of Railways 114 17% 130 15% 173 17% 604 32%
Ministry of Housing and
- 0% - 0% - 0% 57 3%
Urban Affairs
MORTH – NHAI 154 22% 166 20% 157 16% 273 15%
MORTH ex NHAI 272 39% 331 39% 365 36% 423 23%
Ministry of New and
- 0% - 0% - 0% - 0%
Renewable Energy
Ministry of Power - 0% 37 4% 53 5% 35 2%
Ministry of Rural
149 22% 111 13% 110 11% 285 15%
Development
Ministry of Jal Shakti - 0% 54 6% 78 8% 110 6%
Department of
- 0% 19 2% 47 5% 40 2%
telecommunications
Department of Space - 0% - 0% - 0% - 0%
Ministry of Ports, Shipping
- 0% 1 0% 2 0% 1 0%
and Waterways
Total 688 100% 849 100% 1,006 100% 1,860 100%
Source: HSIE Research, Budget documents
2021-22 (BE) 2021-22 (RE) 2022-23 (BE)

CRIF (INR bn)
Amount % Overall Amount % Overall Amount % Overall
Ministry of Defense 26 1% 35 1% 35 1%
Department of Atomic Energy - 0% - 0% - 0%
Ministry of Railways 498 21% 597 24% 527 17%
Ministry of Housing and Urban Affairs 80 3% - 0% - 0%
MORTH – NHAI 347 14% 394 16% 1,001 32%
MORTH ex NHAI 444 19% 497 20% 480 15%
Ministry of New and Renewable Energy - 0% - 0% - 0%
Ministry of Power 53 2% 16 1% 16 0%
Ministry of Rural Development 295 12% 335 14% 390 12%
Ministry of Jal Shakti 600 25% 510 21% 672 21%
Department of telecommunications 52 2% 52 2% 20 1%
Department of Space - 0% - 0% - 0%
Ministry of Ports, Shipping and Waterways 1 0% 1 0% 1 0%
Total 2,396 100% 2,437 100% 3,142 100%
Source: HSIE Research, Budget documents
The ministry of roads, transport and highways (MORTH) has been the biggest
beneficiary of CRIF funds, holding 50% share of CRIF budget capital outlays. CRIF
allocation can be levered 3-4x to raise incremental funds for the NHAI program. NIP
program also stands to benefit as concerns on funding will recede. Though allocation
will only improve if fuel volume recovers and crude price cools off and remains at
lower level. Any increase in crude prices may result in further rollback of cess. This is
directionally positive for the sector, and any further fiscal stimulus will be the icing on
the cake.
Page | 37
Companies Section
Key financials of companies based on the net worth
Net worth HAM orders won
(INR mn) FY18 FY19 FY20 FY21 (INR mn) FY18 FY19 FY20 FY21
Companies <INR 5bn 59,105 62,362 61,068 59,852 Companies <INR 5bn 1,83,258 74,451 1,22,614 2,45,551
5bn <Companies< INR 10bn 54,707 63,104 84,762 36,175 5bn <Companies< INR 10bn 87,360 18,097 34,356 83,452
10bn <Companies< INR 15bn 26,153 35,099 10,584 46,634 10bn <Companies< INR 15bn 55,956 14,976 - 76,527
15bn <Companies< INR 20bn 68,201 33,526 64,767 55,808 15bn <Companies< INR 20bn 1,30,534 18,373 - 40,278
20bn <Companies< INR 25bn 24,570 63,273 24,586 22,095 20bn <Companies< INR 25bn 1,34,727 33,034 19,156 67,115
Companies > INR 25bn 1,81,669 2,49,427 3,59,665 4,31,833 Companies > INR 25bn 67,130 12,017 78,997 3,26,100
Total 4,14,405 5,06,792 6,05,432 6,52,396 Total 6,58,964 1,70,948 2,55,124 8,39,024
Source: VCC Edge, HSIE Research Source: VCC Edge, HSIE Research
NHAI cost Cumulative PAT

Companies <INR 5bn 1,57,902 61,490 95,463 2,10,805 Companies <INR 5bn 11,141 12,837 15,073 10,754
10bn <Companies< INR 15bn 48,234 12,277 - 67,873 10bn <Companies< INR 15bn 2,578 6,484 401 9,495
15bn <Companies< INR 20bn 1,19,192 14,704 - 36,330 15bn <Companies< INR 20bn 9,542 2,548 1,269 6,133
20bn <Companies< INR 25bn 1,29,078 27,819 16,430 55,835 20bn <Companies< INR 25bn 6,356 12,031 3,211 6,929
Companies > INR 25bn 60,662 10,276 67,413 2,65,793 Companies > INR 25bn 41,159 48,263 47,984 45,651
Total 5,96,844 1,42,508 2,07,118 7,06,390 Total 78,062 87,604 81,212 84,057
Cumulative gross debt Cumulative net debt

Companies <INR 5bn 31,125 34,770 31,419 29,336 Companies <INR 5bn 15,536 18,776 13,393 11,089
5bn <Companies< INR 10bn 30,651 1,29,735 31,873 13,979 5bn <Companies< INR 10bn 24,238 1,20,272 14,102 3,941
20bn <Companies< INR 25bn 29,413 22,237 4,039 874 20bn <Companies< INR 25bn 27,800 16,880 1,128 (3,429)
Companies > INR 25bn 1,72,146 2,31,360 1,58,146 2,42,381 Companies > INR 25bn 92,769 1,57,821 54,599 1,28,134
Total 2,83,880 4,37,632 3,04,141 3,77,744 Total 1,76,265 3,28,745 1,54,529 2,13,061
Total capital employed

(INR mn) FY18 FY19 FY20 FY21
Companies <INR 5bn 86,105 1,05,310 91,546 86,736
5bn <Companies< INR 10bn 91,664 2,18,834 1,34,879 55,632
15bn <Companies< INR 20bn 89,397 39,999 1,56,676 1,45,875
Companies > INR 25bn 5,46,578 6,25,712 6,79,202 8,25,475
Total 9,01,247 11,48,167 11,26,049 12,32,736
Source: VCC Edge, HSIE Research
Page | 38
Unlisted companies remain fundamentally strong with robust profitability

Key financials of select unlisted companies
Adani Road Transport Limited Dineshchandra R. Agrawal Infracon Private Limited
(INR mn) FY16 FY17 FY18 FY19 FY20 FY21 (INR mn) FY16 FY17 FY18 FY19 FY20 FY21
Revenue - - - 113 500 4,582 Revenue 9,854 11,726 19,442 22,750 27,604 28,267
EBITDA - - - 12 200 385 EBITDA 681 977 1,858 1,865 3,102 3,105
EBITDA % - - - 10.55 40.06 8.39 EBITDA % 6.91 8.33 9.56 8.20 11.24 10.98
APAT - - - 0 9 43 APAT 299 425 706 924 1,906 1,973
Net Debt - - - 1,481 2,525 3,706 Net Debt -935 -675 -1,331 -362 -3,230 -3,701
Net Worth - - - 2 10 653 Net Worth 1,894 2,307 3,072 3,973 5,834 7,770
Net D/E (x) - - - 914.3 260.6 5.7 Net D/E (x) -0.5 -0.3 -0.4 -0.1 -0.6 -0.5
NWC Days - - - - 2,131 442 NWC Days 46 38 45 40 38 64
APCO Infratech Private Limited Gawar Construction Limited

Revenue 12,676 12,231 16,219 20,159 32,143 54,736 Revenue 13,210 17,781 25,463 38,798 41,034 60,182
EBITDA 1,557 1,723 2,804 3,623 5,690 9,158 EBITDA 1,134 1,619 3,354 5,394 6,479 9,831
EBITDA % 12.29 14.08 17.29 17.97 17.70 16.73 EBITDA % 8.59 9.10 13.17 13.90 15.79 16.34
APAT 620 685 1,269 1,720 3,006 5,321 APAT 552 857 2,709 4,047 4,400 6,929
Net Debt 1,870 1,871 1,741 1,210 153 3,822 Net Debt 499 -1,451 -234 -996 -1,829 -3,429
Net Worth 2,904 3,510 4,780 6,410 9,209 14,514 Net Worth 3,154 4,011 6,720 10,767 15,167 22,095
Net D/E (x) 0.6 0.5 0.4 0.2 0.0 0.3 Net D/E (x) 0.2 -0.4 -0.0 -0.1 -0.1 -0.2
NWC Days 33 49 29 6 20 14 NWC Days 35 42 55 67 90 84
Ceigall India Limited Megha Engineering and Infrastructure Limited

Revenue 1,232 1,732 1,911 2,507 7,983 8,834 Revenue 89,385 1,30,925 1,88,965 2,02,541 1,91,185 15,723
EBITDA 138 155 214 584 1,351 1,703 EBITDA 15,723 23,386 36,231 39,952 34,282 38,223
EBITDA % 11.24 8.94 11.20 23.31 16.92 19.28 EBITDA % 17.59 17.86 19.17 19.73 17.93 243.11
APAT 46 59 68 327 893 1,121 APAT 11,520 18,168 29,350 27,711 21,122 23,807
Net Debt 80 278 371 1 -295 -1,423 Net Debt -3,928 -10,021 -16,967 -22,332 -35,639 -39,735
Net Worth 200 259 326 653 1,926 3,048 Net Worth 39,884 58,052 87,230 1,14,736 1,35,707 1,59,369
Net D/E (x) 0.4 1.1 1.1 0.0 -0.2 -0.5 Net D/E (x) -0.1 -0.2 -0.2 -0.2 -0.3 -0.2
NWC Days 46 27 9 33 33 76 NWC Days 96 86 98 86 142 178
Page | 39
Coverage Companies
SOTP: Valuation of coverage companies
Infra/EPC Ahluwalia Ashoka DBL GR Infra HG Infra IRB ITDC
Standalone (A) 527 108 211 1,868 - - 126
BOT 15 - 158 - 856 121 -
EPC - - - - - 146 -
HAM - 32 - 398 124 -
INVIT - - - - - 8 -
Real Estate - - - - - 9 -
Sub-Total (B) 15 32 158 398 980 284 -
SOTP (A+B) 542 140 369 2,266 980 284 126
CMP 427 77 235 1,364 554 242 94
Upside 27% 83% 57% 66% 77% 17% 35%
Infra/EPC JKIL JMC KNR NCC PNC PSP

Standalone (A) 364 142 310 108 361 705
BOT - - 3 - 30 -
EPC - - - - - -
HAM - - 35 - 16 -
INVIT - - - - - -
Real Estate - - 2 - - -
Sub-Total (B) - - 40 - 46 -
SOTP (A+B) 364 142 350 108 407 705
CMP 300 87 251 66 252 572
Upside 21% 62% 40% 64% 61% 23%
Larsen &
Capital Goods ABB Cummins Kalpataru Power KEC International Siemens
Toubro
Standalone (A) 2,420 1,191 372 375 1,308 2,599
Subsidiaries (B) - 310 99 - 827 187
SOTP (A+B) 2,420 1,503 471 375 2,135 2,882
CMP 2,870 1,202 361 401 1,881 2,876
Upside -16% 25% 30% -7% 14% 0%
Page | 40
Composite Valuation Summary

Mcap CMP TP Adj. EPS (INR/sh) P/E (x) EV/EBITDA (x) ROE (%)
Capital Goods Reco
INR Bn (INR) (INR) FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E
Larsen &
2,638 1,881 2,135 BUY 61.1 72.8 85.8 21.7 20.6 17.7 12.2 11.9 10.2 10.8 12.0 13.2
Toubro
Siemens# 1,024 2,876 2,786 ADD 37.7 51.7 61.3 76.2 55.6 46.9 53.5 39.9 32.7 12.4 15.4 16.1
ABB India^ 608 2,870 2,420 REDUCE 31.2 41.5 48.1 91.9 69.2 59.6 66.4 51.9 42.2 15.5 18.0 18.0
Cummins India 333 1,202 1,501 BUY 30.2 39.6 45.7 39.7 30.4 26.3 36.5 28.7 23.5 16.6 20.7 21.8
KEC
103 401 467 REDUCE 12.9 18.0 31.2 31.1 22.3 12.9 16.8 13.7 9.5 9.5 12.2 18.6
International
Kalpataru
54 361 473 BUY 25.4 23.7 29.7 12.4 13.3 10.6 7.8 7.4 5.6 9.2 7.7 8.9
Power
Source: Company, HSIE Research; * Consolidated; #Sep-YE; ^Dec-YE
Mcap Adj. EPS (INR/sh) P/E (x) EV/EBITDA (x) ROE (%)
CMP TP RECO
Core EPC (INR
(INR) (INR) FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E FY22 FY23E FY24E
Bn)
G R Infraprojects 132 1,364 2,266 BUY 69.4 82.7 103.7 17.9 13.1 9.4 11.5 7.9 6.1 16.9 16.6 17.1
Dilip Buildcon 34 235 369 BUY (9.0) 11.2 17.6 (8.5) 6.9 4.4 5.6 3.4 3.1 (3.2) 3.7 5.6
PNC Infratech 65 252 407 BUY 19.0 20.9 24.1 10.9 9.9 8.6 6.3 6.0 5.2 15.6 14.9 15.0
KNR
70 251 350 BUY 12.8 14.7 17.2 16.5 14.3 12.2 8.5 8.5 7.3 17.5 17.5 17.9
Constructions
IRB Infra
146 242 284 ADD 6.0 9.7 11.7 40.5 24.9 20.8 10.4 9.6 9.1 3.7 4.6 5.2
Developers
NCC 40 66 108 BUY 5.7 8.8 12.0 11.6 7.5 5.5 4.7 4.2 3.6 6.2 8.9 11.0
HG Infra
36 554 980 BUY 52.0 59.8 61.1 9.6 8.3 8.2 6.0 5.4 5.0 28.3 25.0 20.4
Engineering
Ashoka Buildcon 22 77 140 BUY 14.6 10.6 12.0 1.5 2.0 1.8 2.0 1.1 0.8 14.3 10.4 10.3
Ahluwalia
29 427 542 BUY 23.2 34.2 40.5 17.8 12.0 10.2 9.1 6.6 5.5 16.2 20.1 19.6
Contracts
JMC Projects 15 87 142 BUY 6.5 10.8 12.9 13.4 8.1 6.8 5.2 4.4 3.5 11.5 18.7 18.8
PSP Projects 21 572 705 BUY 45.1 43.8 54.2 12.7 13.1 10.6 7.7 8.2 6.4 26.6 21.4 22.5
ITD Cementation 16 94 114 BUY 4.0 7.8 11.4 23.4 12.0 8.2 5.6 4.8 3.7 6.2 11.0 14.1
J. Kumar
23 300 324 ADD 27.2 33.7 40.4 11.0 8.9 7.4 4.8 4.1 3.2 10.4 11.6 12.4
Infraprojects
Wt. Average 19.0 14.0 11.3 8.3 7.0 6.0 12.3 13.0 13.4
Source: Company, HSIE Research; *Consolidated
Page | 41
HSIE coverage universe – positioning, opportunities, challenges and upside

Companies Current Change in New opportunities Challenges Likely valuation upside
positioning positioning
Ahluwalia EPC focused play None Focus to remain on Buildings Exposure to single Ramping up of order
segment, high competitive book in Southern and
intensity Western India
Ashoka Buildcon EPC and HAM None Largely present across all major Continuing of aggressive Jaora Naigaon asset
asset play EPC segment. We expect further bidding by smaller monetization, cash
ramp up in Buildings and Water companies, volatility in inflows from Chennai
EPC commodity prices to the ORR and ACL stake sale
extent unhedged
Dilip Buildcon EPC and HAM None Largely present across all major Growth vs. deleveraging. Larger share of EPC
asset play EPC segment. We expect further High overall gearing level wins. Inflows from HAM
ramp-up in T&D and Water EPC poses risk on balance sheet asset monetization
through Shrem InVIT
GR Infra EPC and HAM None Open to TBCB, ropeways and Continuing of aggressive Setting up of InVIT/ asset
asset play BOT toll opportunities. Ramping bidding by smaller monetisation
up Metro and Railways order companies, volatility in
book commodity prices to the
extent unhedged. Large
reliance on single segment
viz. roads
HG Infra EPC and HAM None Ramping up of railways and Continuing of aggressive Monetisation of HAM
asset play water EPC order book bidding by smaller assets
companies, volatility in
commodity prices to the
extent unhedged. Large
reliance on single segment
viz. roads
IRB Largest listed Road None Ramping up of Road BOT toll Weak ordering by NHAI Pick up in traffic growth
BOT/HAM/InVIT order book in BOT segment as focus and BOT awards by
asset play remains largely on NHAI
HAM/EPC
ITDC EPC focused play None Ramping up direct order book in Cost overruns in projects Sustainability of double
highways and buildings leading to margin erosion digit margins
segment
JKIL EPC focused play None Ramping up order book in Continuing of aggressive Change in auditor to Big
buildings segment bidding by smaller 4
extent unhedged
JMC EPC focused play None Getting orders from BOT asset loss funding BOT asset monetisation.
international markets Though now JMC will
mirror Kalpataru Power
price movement due to
merger ratio
KNR EPC and HAM None Geographical and segmental Continuing of aggressive Irrigation receivables
asset play diversification bidding by smaller recovery and new order
companies, volatility in wins outside Southern
commodity prices to the India
extent unhedged.
Irrigation payment delays
NCC EPC focused play None Present across all segment Continuing of aggressive Execution ramp-up,
bidding by smaller realisation of land
companies, volatility in payment and inflows
commodity prices to the from Sembcorp litigation
extent unhedged
PNC Infratech EPC and HAM None Ramping up order book in Continuing of aggressive HAM/BOT asset
asset play Railways bidding by smaller portfolio monetisation
extent unhedged
PSP EPC focused play None Largely focused on building Exposure to single Larger size order wins/
segment, upsides to come from segment, high competitive better than expected
larger size order wins. SDB intensity order inflows
project completion shall aid PSP
qualify for INR 20bn+ single bid
Page | 42
Key strengths of HAM model

Addressing execution challenges
 The sector was most plagued with issues on account of delay in land acquisition
during the construction phase. HAM projects need to achieve at least 80% right of
way (RoW) before declaring their appointed dates. It also has provisions for
granting deemed completion of the project in case 100% of the work is completed
on the RoW, which becomes available to it within 180 days of the appointed date.
 There are stringent provisions for levy of damages, encashment of performance

security as well as the requirement of additional performance security in case of
delay in execution due to reasons attributed to the concessionaire, which exerts
pressure on the concessionaire for timely execution of the project.
Stable cash flow stream

 The authority provides cash support to the concessionaire in the form of
construction grant calculated at the rate of 40% of the bid project cost (BPC),
payable in ten equal installments that are linked with the actual physical progress
of the project. Hence, the concessionaire has to bear the balance 60% of the BPC
through a combination of debt and equity. This mitigates the finance risk for the
concessionaire, to a large extent.
 The BPC shall be inflation-indexed via a price index multiple (PIM), which is the
weighted average of wholesale price index (WPI) and consumer price index (CPI)
in the ratio of 7:3.
 The authority shall pay the balance 60% of the BPC to the concessionaire in the
form of semi-annual annuity payments. Along with the inflation-indexed annuity
payments, the authority pays interest on the reducing the BPC amount. Interest
rate is linked to average of one-year marginal cost of fund-based lending rate
(MCLR) of top-5 scheduled commercial banks along with a spread of 125 bps. This
provides a natural hedge between the annuity payments and the interest costs. The
annuities shall commence within 15 days after the expiry of 180 days from COD.
 Since the interest annuities and the interest on debt both are linked with MCLR,
the interest rate risk is mitigated to a great extent. Also, lending rates are at an all-
time low, though inching up now, owing to RBI repo rate hikes.
 Concessionaire shall be responsible for maintaining the project till the end of the
concession period. The authority shall make O&M payments to the concessionaire
along with annuity payments. These payouts are also inflation linked.
Lower funding requirement

 With 40% construction support from NHAI and ~45-48% debt, HAM model entails
lower sponsor contribution towards equity. Moreover, the concessionaire shall be
eligible to avail 10% mobilisation advance (MA) on BPC at MCLR-linked rates. 5%
of BPC is available to the concessionaire immediately after declaration of AD and
balance 5% of BPC within 60 days from AD. The authority shall release the MA
within 30 days from the date of request made by the concessionaire. MAs are
deducted in eight equal installments (i.e., 1.25% each) from the construction grant
provided by the authority. Interest on such advances shall be adjusted from the
construction grant as the 9th and 10th installment.
Page | 43
Key risks
Order Roads Non-roads
book (%) (%) The slowdown in NHAI awarding
Ashoka 57.58 42.42
We expect Bharatmala Pariyojna-1 (BM1) to get awarded by FY23/24 and in the absence
DBL 45.15 54.85
of any announcement on BM2, there are concerns on roads awards longevity. This may
GR Infra 88.00 12.00
lead to growth rate moderation for companies with a single segment as roads.
HG Infra 100.00 0.00
KNR 75.44 24.56 Living in the comfort zone, diversification necessary
PNC 44.00 56.00
Source: Companies
With the level of road awards, some of the developers in the coverage universe have
achieved larger size and scale. Growing beyond the INR 50-60bn revenue per annum
will be a serious challenge with just the road segment as the only focused segment.
Companies need to walk out of the comfort zone and align the capabilities, in line with
the NIP program. They need to focus on railways, water, metro, power EPC, etc. DBL
and PNC are there in terms of diversification with roads now being about 45.15% and
44% respectively, while HG infra has 100% of its order book as road projects and
Ashoka/GR Infra/KNR have 57.58/88/75.44% of OB as road projects.
Higher input costs and higher labour costs

We observed that elevated commodity (metal, fuel, and bitumen) prices have
suppressed EBITDA margins of our universe companies. The Russia-Ukraine war is
expected to keep prices of oil elevated vs. historical averages. This may be margin
dilutive for infra companies. Due to COVID-19 lockdowns, supply of skilled and
unskilled labour was very limited, which increased labour costs. Whilst labour
availability has improved, we need to see mean reversion in labour costs. Any further
COVID waves may lead to sector execution getting further challenged. The growth
from here on is based on economic and industrial recovery.
Asset monetisation key for equity recycling, funds availability

We believe that BM2 will get kick-started by FY24, once (1) a large part of BM1 HAM
projects gets monetised; (2) the incoming investors list these projects through INVIT,
eventually freeing up banks' exposure; (3) lower interest rate will result in interest for
higher yield and a safer product like HAM INVITs. Post-INVIT, banks will have limits
available for lending to new HAM projects. The attractiveness of higher
yield/relatively lower risk of AAA-backed asset will not be a limiting factor for funds
availability.
Challenges so far
 Delayed dispute resolution
 Need for rapid asset monetisation
 Need for IT-based infrastructure maintenance and accident monitoring
Page | 44
Vision 2025
Infrastructure is an enabler for growth. To achieve the target of $ 5trn economy by 2025
and meet the aspirations of the citizens of India, creating new and upgrading existing
infrastructure will be important factors in raising India’s competitiveness. We expect
the infrastructure sector to grow in the next five years and the growth to be supported
by the following:
 Post clean-up of the balance sheet, the lending institutions will be better positioned
to provide credit to corporates.
 Post deleveraging their balance sheets, corporates will be better positioned to
unlock the next phase of growth and avail fresh credit lines on better terms and
conditions.
 Development of overall 60,000 kms of NHs, including 2,500/9,000/2,000 kms of
expressway/economic corridors/coastal and port connectivity, bypasses for 45
towns and enhanced connectivity for 100 tourist destinations.
 Improved connectivity to key airports, ports, railway stations, military, other
strategic installations, rail, intercity bus, metro, ferry terminals and improved
access to all remote areas after the completion of Bharatmala Phase-I.
 Significant share of private sector in NHs.
 Improved PPP models and agreements with more balanced risk-reward sharing.
 Long-term financing through credit-enhanced project bonds, innovative models of
financing–NIIF-led project development, value capture financing, green highways
or plantation-surrounding roads to result in lesser pollution.
 Higher penetration of advanced technology in traffic management, safety and
security.
Vision 2030
 The Bharatmala Phase-I, envisaged to construction a total of 34,800 kms (including
10,000 kms currently under-construction which are incomplete under NHDP) by
December 2022. Until FY22, only 22% of the target has been achieved. Hence, the
deadline now stands extended until FY27, with the NHAI awarding all the projects
under BMP-I by FY24.
Key takeaways from interaction with NHAI

 As per our recent interaction with DGM, Technical, Bharatmala Program, NHAI,
expenditure incurred by the authority is nearing the cabinet approved cost of INR
5.4trn and, hence, the increase needs to be approved by the Cabinet. Following
delays, the BM-1 program of 34,800km, INR 5.35trn cost may get completed by
2027. The project cost has also escalated to INR 10.5trn now.
 About 10,000km of old NHDP project continue to get implemented as and when
required, while 15,000/24,800KM of BM-1 projects must have got awarded till now,
so balance c.10,000km and BM-2A c.8,000km (i.e. a total of c.18,000km) would be
awarded by 2027.
 BMP-IIA is being envisaged covering c.8,000km and INR 3.68trn project cost.
Overall balance projects cost would be awarded INR 7.7trn. This will increase as
more phases of BM-2 get implemented. DPRs are being prepared and project by
project approvals will be taken. This is mostly covering the greenfield
expressways.
Page | 45
 Cost escalation of BM-I is largely on account of the following (1) estimates being
old and largely drawn on per lane cost when the earlier programmes got subsumed
into BM-1; (2) earlier projects were planned for 4/6 lanes, the design changed to 6/8
which led to increased costs and changes to structures on roads; (3) multiple
greenfield expressways getting into drawing board and implementation wherein
number of lanes increased albeit reduction in land cost, but overall cost increased;
(4) delays in land acquisitions, time and cost overruns, higher-than-expected
inflation added to costs; (5) land costs are still under control as greenfield
expressways land is cheaper.
 The Capex will continue despite concerns on fuel cess collections, inflation, etc.
Government intent on growth is clear and it wants to implement this program.
New highway addition will keep happening beyond 2027 as well as more phases
of BM-2 may get added.
 With abundant liquidity, financial closure is taking place for even smaller players.
Page | 46
Key Financials – EPC/Infra

Ahluwalia Contracts (INR mn)
Standalone Income Statement
Year ending March FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E
Net Revenues 14,265 16,466 17,547 18,849 19,822 26,925 31,412 35,684
Growth (%) 14.2 15.4 6.6 7.4 5.2 35.8 16.7 13.6
Material Expenses 10,712 12,608 13,500 15,038 15,869 22,003 24,595 27,833
Employee Expenses 1,536 1,338 1,433 1,543 1,534 1,879 2,356 2,676
Other Operating Expenses 287 326 449 738 876 477 729 828
EBITDA 1,730 2,194 2,165 1,530 1,542 2,566 3,732 4,346
EBITDA (%) 12.1 13.3 12.3 8.1 7.8 9.5 11.9 12.2
EBITDA Growth (%) 7.6 26.8 (1.3) (29.3) 0.8 66.4 45.4 16.5
Depreciation 241 256 276 319 304 336 381 404
EBIT 1,489 1,938 1,889 1,211 1,238 2,230 3,350 3,943
Other Income 84 63 98 104 223 291 238 262
Interest 27 251 192 350 426 437 489 535
PBT 1,547 1,750 1,795 966 1,035 2,084 3,100 3,669
Tax 446 594 621 322 263 532 806 954
RPAT 1,101 1,156 1,174 644 772 1,553 2,294 2,715
EO items (net of tax) - - - - - - - -
APAT 1,101 1,156 1,174 644 772 1,553 2,294 2,715
APAT Growth (%) 30.4 5.0 1.5 (45.1) 19.9 101.0 47.7 18.4
EPS 16.4 17.3 17.5 9.6 11.5 23.2 34.2 40.5
EPS Growth (%) 30.4 5.0 1.5 (45.1) 19.9 101.0 47.7 18.4
Standalone Balance Sheet

As at March FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E
SOURCES OF FUNDS
Share Capital 134 134 134 134 134 134 134 134
Reserves 5,188 6,285 7,220 7,906 8,666 10,231 12,365 15,032
Total Shareholders’ Funds 5,322 6,419 7,354 8,040 8,800 10,365 12,499 15,166
Minority Interest - - - - - - - -
Long Term Debt - 7 6 5 6 0 - -
Short Term Debt 900 289 602 465 150 7 208 235
Total Debt 900 296 609 470 156 7 208 235
Deferred Taxes (134) (217) (299) (236) (231) (264) (299) (299)
Long Term Provisions & Others 677 303 673 1,195 2,089 1,293 1,302 1,496
TOTAL SOURCES OF FUNDS 6,764 6,801 8,337 9,470 10,814 11,400 13,709 16,598
APPLICATION OF FUNDS
Net Block 1,925 1,844 1,862 2,175 2,295 1,164 2,307 2,303
CWIP 3 3 4 2.074 4 1 4 4
Other Non-Current Assets 1,184 1,289 1,336 1,230 1,829 2,399 2,706 3,425
Investments 63 63 63 63 63 1,062 63 63
Total Non-current Assets 3,176 3,199 3,266 3,470 4,190 4,626 5,081 5,796
Inventories 2,478 1,891 2,223 2,208 2,972 2,420 4,131 4,693
Debtors 4,549 5,659 6,490 5,973 4,349 4,425 6,885 7,821
Cash & Equivalents 1,202 632 1,528 1,650 3,255 4,333 3,300 3,832
Cash FDR 386 615 564 789 921 175 333
ST Loans & Advances, Others 673 227 465 3,276 4,699 4,403 4,602 5,288
Total Current Assets 9,287 9,024 11,269 13,895 16,195 15,582 19,093 21,966
Creditors 3,522 3,778 4,285 5,231 6,916 6,194 6,920 7,208
Other Current Liabilities & Provisions 2,176 1,885 1,913 2,669 2,656 2,614 3,549 3,962
Total Current Liabilities 5,699 5,663 6,198 7,900 9,572 8,807 10,469 11,170
Net Current Assets 3,589 3,361 5,071 5,994 6,623 6,774 8,624 10,797
TOTAL APPLICATION OF FUNDS 6,764 6,801 8,337 9,470 10,814 11,400 13,709 16,598
Page | 47
Standalone Cash Flow

PBT 1,547 1,750 1,795 966 1,035 2,084 3,100 3,669
Non-operating & EO items -84 -23 37 319 335 -291 -238 -262
Interest expenses 27 94 107 231 298 437 489 535
Depreciation 241 256 276 319 304 336 381 404
Working Capital Change 650 -712 -564 -268 936 -1,394 -3,040 -2,009
Tax paid -432 -556 -791 -471 -317 -532 -806 -954
OPERATING CASH FLOW ( a ) 1,948 810 859 1,097 2,591 641 -115 1,383
Capex -203 -175 -293 -368 -353 799 -1,528 -400
Free cash flow (FCF) 1,746 635 566 729 2,238 1,440 -1,643 983
Investments + Interest income -297 -23 -133 -91 -126 -708 1,237 262
INVESTING CASH FLOW ( b ) -500 -198 -426 -459 -479 91 -291 -138
Share capital Issuance - - - - - - - -
Debt Issuance (520) (603) 313 (137) (310) (149) 201 27
Interest expenses (27) (93) (98) (187) (197) (437) (489) (535)
Dividend - - (24) (24) - (48) (48) (48)
Others Miscellaneous (196) (15) - (15.50) - - - (1)
FINANCING CASH FLOW ( c ) -743 -711 191 -364 -507 -634 -336 -557
NET CASH FLOW (a+b+c) 706 -100 624 274 1,605 97 -742 688
Opening cash balance 882 1,588 1,247 2,091 2,439 4,175 4,333 3,475
Cash balance not part of C&CE -0 -241 221 73 132 61 -116 1
Closing Cash & Equivalents 1,588 1,247 2,091 2,439 4,175 4,333 3,475 4,164
Key Ratios
Particulars FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E
PROFITABILITY (%)
GPM 24.9 23.4 23.1 20.2 19.9 18.3 21.7 22.0
EBITDA Margin 12.1 13.3 12.3 8.1 7.8 9.5 11.9 12.2
EBIT Margin 10.4 11.8 10.8 6.4 6.2 8.3 10.7 11.0
APAT Margin 7.7 7.0 6.7 3.4 3.9 5.8 7.3 7.6
RoE 23.1 20.1 17.3 8.4 9.2 16.2 20.1 19.6
Core RoCE 19.3 21.0 18.3 10.4 12.3 27.7 24.0 23.0
RoCE 16.6 19.4 15.6 9.3 10.1 16.5 19.4 18.7
EFFICIENCY
Tax Rate (%) 28.8 33.9 34.6 33.3 25.4 25.5 26.0 26.0
Asset Turnover (x) 3.2 3.5 3.5 3.5 3.4 4.2 4.6 4.9
Inventory (days) 63 42 46 43 55 33 48 48
Debtors (days) 116 125 135 116 80 60 80 80
Cash FDR 10 14 12 15 17 - 2 3
Payables (days) 90 84 89 101 127 84 80 74
Cash Conversion Cycle (days) 100 97 104 72 24 9 50 58
Other Current Assets (days) 17 5 10 63 87 60 53 54
Other Current Liab (days) 56 42 40 52 49 35 41 41
Net Working Capital Cycle (Days) 61 60 74 84 62 33 62 71
Debt/EBITDA (x) 0.5 0.1 0.3 0.3 0.1 0.0 0.1 0.1
Net D/E (0.1) (0.1) (0.1) (0.1) (0.4) (0.4) (0.2) (0.2)
Interest Coverage 55.7 7.7 9.8 3.5 2.9 5.1 6.9 7.4
PER SHARE DATA
EPS (INR/sh) 16.4 17.3 17.5 9.6 11.5 23.2 34.2 40.5
CEPS (INR/sh) 20.0 21.1 21.6 14.4 16.1 28.2 39.9 46.6
DPS (INR/sh) - - 0.4 0.4 - 0.7 0.7 0.7
BV (INR/sh) 79 96 110 120 131 155 187 226
VALUATION
P/E 27.4 26.1 25.7 46.8 39.1 19.4 13.2 11.1
P/BV 5.7 4.7 4.1 3.8 3.4 2.9 2.4 2.0
EV/EBITDA 17.3 13.6 13.5 19.0 17.6 10.1 7.5 6.3
OCF/EV (%) 6.5 2.7 2.9 3.8 9.6 2.5 (0.4) 5.0
FCF/EV (%) 5.8 2.1 1.9 2.5 8.3 5.6 (5.9) 3.6
FCFE/Market Cap (%) 4.0 (0.2) 2.6 1.3 5.7 2.8 (6.2) 1.5
Dividend Yield (%) - - 8% 8% 0% 16% 16% 16%
Page | 48
Ashoka Buildcon (INR mn)

Net Revenues 20,133 24,483 38,206 38,374 38,175 45,915 52,802 58,082
Growth (%) 1% 22% 56% 0% -1% 17% 15% 10%
Employee Expenses 901 1,067 1,490 1,820 1,685 1,811 2,218 2,498
Other Operating Expenses 745 938 1,265 1,723 1,504 1,067 2,112 2,323
EBITDA 2,427 2,934 5,152 4,856 5,195 5,025 5,914 6,563
EBITDA Margin (%) 12.1% 12.0% 13.5% 12.7% 13.6% 10.9% 11.2% 11.3%
EBITDA Growth (%) (17.0) 20.9 75.6 (5.7) 7.0 (3.3) 17.7 11.0
Depreciation 507 532 763 1,111 872 697 774 859
EBIT 1,920 2,402 4,389 3,745 4,323 4,328 5,140 5,704
Other Income (Incl. EO items) 719 978 1,631 2,449 1,921 1,988 1,392 1,461
Interest 474 485 907 855 772 856 942 961
PBT 2,165 2,895 5,113 5,340 5,472 5,460 5,590 6,205
Tax 403 524 1,307 1,468 1,391 851 1,509 1,675
Minority Interest/Share of associates
RPAT 1,762 2,371 3,806 3,871 4,081 -3,086 4,081 4,530
EO Items - - (359) 661 (7,696) 1,092 1,161
APAT 1,762 2,371 4,165 3,211 4,081 4,086 2,989 3,368
APAT Growth (%) 22.4 34.6 75.7 (22.9) 27.1 0.1 (26.8) 12.7
Adjusted EPS (INR/sh) 6.28 8.45 14.84 11.44 14.54 14.55 10.65 12.00
EPS Growth (%) 22.4 34.6 75.7 (22.9) 27.1 0.1 (26.8) 12.7

SOURCES OF FUNDS
Share Capital 936 936 1,404 1,404 1,404 1,404 1,404 1,404
Reserves 16,292 18,327 20,717 24,586 28,664 25,584 29,172 33,209
Long Term Debt 886 1,214 3,592 1,850 1,091 1,629
Short Term Debt 1,149 385 4,291 2,189 3,327 3,964
Total Debt 2,035 1,599 7,883 4,039 4,418 5,593 6,093 6,593
Net Deferred Taxes -304 -349 -518 -475 -515 (582) -582 -582
Other Non-Current Liabilities 2,018 1,993 4,178 3,783 3,470 4,028 4,431 4,874
Net Block 1,688 2,174 3,799 3,491 2,854 2,789 3,015 3,156
CWIP/Intangible assets under development 158 150 55 95 17 17 17 17
Investments 13,065 13,182 13,641 14,112 14,585 10,628 12,128 13,628
Inventories 866 1,459 1,527 1,534 1,717 1,877 2,315 2,546
Debtors 4,575 8,600 12,791 12,504 11,984 10,483 13,743 15,276
Cash & Equivalents 638 1,234 550 2,911 1,364 1,440 5,880 7,150
Other Current Assets 10,214 6,813 8,553 6,998 7,570 23,871 21,699 23,869
Creditors 5,693 5,927 8,867 6,883 6,879 8,080 10,850 11,776
Page | 49

Reported PBT 2,165 2,895 5,113 5,340 5,472 -2,236 5,590 6,205
Non-operating & EO items (309) (554) (133) (546) (687) 8,060 (1,392) (1,461)
Interest expenses 474 485 907 853 749 -1,059 942 961
Depreciation 507 532 763 1,111 872 697 774 859
Working Capital Change 2,307 2,415 -4,454 2,069 -3,869 -2,337 2,078 -1,626
Tax Paid -722 -787 -1,176 -1,414 -1,227 -1,515 -1,509 -1,675
OPERATING CASH FLOW ( a ) 4,422 4,986 1,020 7,413 1,311 1,611 6,483 3,262
Capex -400 -1,416 -1,626 -551 -159 -529 -1,000 -1,000
Free cash flow (FCF) 4,022 3,570 -606 6,862 1,152 1,082 5,483 2,262
Investments -1,250 -2,379 -4,048 -423 -2,084 -2,168 -1,500 -1,500
Dividend Income
Non-operating income 194 454 157 408 179 179 1,392 1,461
INVESTING CASH FLOW ( b ) -1,456 -3,341 -5,517 -566 -2,064 -2,517 -1,108 -1,039
Debt Issuance -1,268 386 5,660 -3,725 25 1,060 500 500
Interest expenses -422 -388 -778 -750 -761 -805 -942 -961
Dividend -151 -181 -150 -150 0 0 -493 -493
FINANCING CASH FLOW ( c ) -1,841 -183 4,732 -4,625 -736 255 -935 -953
NET CASH FLOW (a+b+c) 1,125 1,462 235 2,222 -1,489 -652 4,440 1,270
EO Items, Others
Closing Cash & Equivalents 638 1,234 550 2,911 1,364 1,440 5,880 7,150
Key Ratios
GPM 20.2 20.2 20.7 21.9 22.0 17.2 19.4 19.6
EBITDA Margin 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1
EBIT Margin 9.5 9.8 11.5 9.8 11.3 9.4 9.7 9.8
APAT Margin 8.8 9.7 10.9 8.4 10.7 8.9 5.7 5.8
RoE 10.2 13.0 20.1 13.3 14.6 14.3 10.4 10.3
RoIC 21.5 25.6 23.7 15.2 17.1 16.1 16.2 17.6
RoCE 10.2 12.7 17.2 11.4 13.2 13.1 9.6 9.5
EFFICIENCY
Tax Rate (%) 18.6 18.1 25.6 27.5 25.4 15.6 27.0 27.0
Fixed Asset Turnover (x) 5.2 5.1 5.2 4.9 5.6 6.2 6.2 6.1
Inventory (days) 16 22 15 15 16 16 16 16
Debtors (days) 83 128 122 119 115 110 95 96
Payables (days) 103 88 85 65 66 75 75 74
Other Current Liab & Provns (days) 136 156 96 118 96 90 65 65
NWC (days) 44 7 38 16 42 46 121 123
Debt/EBITDA (x) 0.8 0.5 1.5 0.8 0.9 1.1 1.0 1.0
Net D/E 0.1 0.0 0.3 0.04 0.10 0.2 0.0 (0.0)
PER SHARE DATA
EPS (INR/sh) 6.3 8.4 14.8 11.4 14.5 14.6 10.6 12.0
CEPS (INR/sh) 8.1 10.3 17.6 15.4 17.6 17.0 13.4 15.1
DPS (INR/sh) 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5
BV (INR/sh) 61.4 68.6 78.8 92.6 107.1 96.1 108.9 123.3
VALUATION
P/E 12.1 9.0 5.1 6.7 5.2 5.2 7.2 6.3
P/BV 1.2 1.1 1.0 0.8 0.7 0.8 0.7 0.6
EV/EBITDA 9.4 7.4 5.6 4.6 4.7 5.1 3.7 3.2
EV/Revenues 1.1 0.9 0.8 0.6 0.6 0.6 0.4 0.4
OCF/EV (%) 0.2 0.2 0.0 0.3 0.1 0.1 0.3 0.2
FCF/EV (%) 17.7 16.4 (2.1) 30.5 4.7 4.2 25.4 10.9
FCFE/Market Cap (%) 10.9 16.7 20.0 11.2 1.9 6.3 23.6 8.4
Dividend Yield (%) 2.0 2.0 2.0 2.0 2.0 2.0 2.0 2.0
Page | 50
Dilip Buildcon (INR mn)

Net Revenues 49,916 76,153 90,586 88,556 91,035 90,061 95,231 1,02,373
Growth (%) 24.2 52.6 19.0 (2.2) 2.8 (1.1) 5.7 7.5
Other Expenses 2,099 1,827 2,025 2,029 2,675 2,514 2,857 2,866
EBITDA 8,863 12,722 15,447 14,438 13,636 7,536 11,436 12,813
EBITDA (%) 17.8 16.7 17.1 16.3 15.0 8.4 12.0 12.5
EBITDA Growth (%) 21.1 43.5 21.4 (6.5) (5.6) (44.7) 51.7 12.0
Depreciation 2,274 2,750 3,202 4,241 4,071 3,932 3,875 3,838
EBIT 6,589 9,973 12,245 10,197 9,565 3,605 7,561 8,975
Other Income (Incl EO Items+bonus) 1,175 1,309 1,103 1,684 1,345 340 490 310
Interest 4,162 4,644 5,299 6,127 5,862 6,048 5,782 5,808
PBT 3,601 6,637 8,050 5,754 5,048 (2,103) 2,269 3,477
Tax (9) 434 400 1,505 1,855 (630) 635 904
RPAT 3,610 6,204 7,649 4,250 3,193 (860) 1,634 2,573
EO (Loss) / Profit (Net Of Tax) 2 152 (43) (89) - 614 - -
APAT 3,612 6,356 7,607 4,160 3,193 (1,320) 1,634 2,573
APAT Growth (%) 63.8 76.0 19.7 (45.3) (23.3) (141.3) (223.8) 57.5
Adj. EPS 24.7 43.5 52.0 28.5 21.8 (9.0) 11.2 17.6
Adj. EPS Growth (%) 63.8 76.0 19.7 (45.3) (23.3) (141.3) (223.8) 57.5

SOURCES OF FUNDS
Share Capital 1,368 1,368 1,368 1,368 1,368 1,462 1,462 1,462
Reserves 17,161 23,203 30,677 34,692 37,804 41,899 43,589 46,162
Long Term Debt 9,903 12,133 15,211 12,940 12,663 12,663 12,663 12,663
Short Term Debt 15,731 17,280 20,552 19,622 21,248 21,248 21,748 22,748
Total Debt 25,634 29,413 35,763 32,562 33,910 33,910 34,410 35,410
Deferred Taxes 759 1,067 171 (196) (359) (969) (359) (359)
Net Block 16,825 18,319 20,822 20,319 19,151 16,578 15,503 13,765
Investments 6,808 8,230 15,773 18,875 20,678 24,640 33,158 36,464
Inventories 16,639 20,262 25,038 26,309 30,294 34,093 20,873 22,438
Debtors 10,165 13,845 14,093 12,398 11,048 10,380 15,133 16,268
Cash & Equivalents 1,137 1,613 1,888 3,219 2,922 3,329 7,021 6,758
Loans & Advances 2,479 2,327 4,467 5,451 5,874 1,983 5,740 6,170
Creditors 8,886 15,078 17,547 16,389 20,630 22,461 26,803 31,091
Other Current Liabilities 8,223 9,483 11,010 14,399 8,803 9,004 7,544 7,007
Short Term Provisions 304 100 122 157 159 126 175 184
Total Current Liabilities & Provisions 17,413 24,660 28,679 30,945 29,592 31,591 34,522 38,282
Page | 51

Reported PBT 3,601 6,637 8,050 5,754 5,048 (1,489) 2,269 3,477
Non-operating & EO items 302 (226) 828 (14) (2) (140) (490) (310)
Interest expenses 4,162 4,644 5,299 6,127 5,862 6,048 5,782 5,808
Depreciation 2,274 2,750 3,202 4,241 4,071 3,932 3,875 3,838
Working Capital Change (2,966) (8,110) (6,196) 4,371 (6,593) (6,791) 9,002 (2,269)
Taxes (835) (1,504) (1,604) (1,950) (1,396) (1,675) (635) (904)
OPERATING CASH FLOW ( a ) 6,537 4,192 9,579 18,529 6,990 (115) 19,803 9,640
Capex (4,884) (4,242) (5,704) (3,107) (2,951) (1,388) (2,801) (2,100)
Free cash flow (FCF) 1,653 (50) 3,875 15,422 4,039 (1,503) 17,002 7,540
Investments (1,797) (442) (2,662) (4,911) 29 5,957 (8,517) (3,306)
Other Income + E.O Items 90 125 216 309 285 329 490 310
INVESTING CASH FLOW ( b ) (6,592) (4,559) (8,150) (7,709) (2,637) 4,899 (10,828) (5,096)
Share capital Issuance 4,300 - - - - 5,008 - -
Debt Issuance (5) 5,650 4,306 (3,200) 1,348 (3,193) 500 1,000
Interest expenses (4,162) (4,641) (5,299) (6,127) (5,862) (6,048) (5,782) (5,808)
FCFE (2,515) 959 2,882 6,096 (474) (10,744) 11,720 2,732
Dividend (0) (165) (161) (162) (137) (143.57)
FINANCING CASH FLOW ( c ) 132 844 (1,154) (9,489) (4,650) (4,377) (5,282) (4,808)
NET CASH FLOW (a+b+c) 78 477 275 1,332 (297) 407 3,692 (264)
Non-operating and EO items - (0) (0)
Closing Cash & Equivalents 1,137 1,613 1,888.0 3,220 2,922 3,329 7,021 6,758
Key Ratios
PROFITABILITY (%)
GPM 24.0 21.1 21.2 20.8 20.0 13.3 17.2 17.5
EBITDA Margin 17.8 16.7 17.1 16.3 15.0 8.4 12.0 12.5
EBIT Margin 13.2 13.1 13.5 11.5 10.5 4.0 7.9 8.8
APAT Margin 7.2 8.3 8.4 4.7 3.5 (1.5) 1.7 2.5
RoE 24.8 29.5 26.9 12.2 8.5 (3.2) 3.7 5.6
Core RoCE 18.1 20.5 20.7 12.4 10.3 4.4 10.5 13.4
RoCE 18.2 19.7 18.1 10.8 8.5 3.5 6.7 7.5
EFFICIENCY
Tax Rate (%) (0) 7 5 26 36.7 29.9 28.0 26.0
Asset Turnover (x) 2.1 2.7 2.7 2.3 2.3 2.1 2.2 2.2
Inventory (days) 122 97 101 108 121 138 80 80
Debtors (days) 74 66 57 51 44 42 58 58
Loans & Advances (days) 18 11 18 22 24 8 22 22
Payables (days) 65 72 71 68 83 91 103 111
Other Current Liabilities & Provns (days) 62 46 45 60 36 37 30 26
NWC Cycle (days) 143 111 127 120 129 129 88 84
Debt/EBITDA (x) 2.9 2.3 2.3 2.3 2.5 4.5 3.0 2.8
Net D/E 1.3 1.1 1.1 0.8 0.8 0.7 0.6 0.6
PER SHARE DATA 2.8 2.2 2.2 2.0 2.3 4.1 2.4 2.2
EPS (INR/sh) 24.7 43.5 52.0 28.5 21.8 (9.0) 11.2 17.6
CEPS (INR/sh) 40.3 62.3 73.9 57.5 49.7 17.9 37.7 43.8
DPS (INR/sh) 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0
BV (INR/sh) 126.7 168.0 219.2 246.6 267.9 296.6 308.1 325.7
VALUATION
P/E 10.1 5.8 4.8 8.8 11.5 (27.7) 22.4 14.2
P/BV 2.0 1.5 1.1 1.0 0.9 0.8 0.8 0.8
EV/EBITDA 6.9 4.9 4.4 4.4 4.8 8.9 5.6 5.1
EV/Net Revenues 1.2 0.8 0.8 0.7 0.7 0.7 0.7 0.6
OCF/EV (%) 10.7 6.8 14.1 29.2 10.7 (0.2) 31.0 14.8
FCF/EV (%) 2.7 (0.1) 5.7 24.3 6.2 (2.2) 26.6 11.6
FCFE/Market Cap (%) (6.9) 2.8 8.4 17.8 (1.4) (29.4) 32.0 7.5
Dividend Yield (%) 0.4 0.4 0.4 0.4 0.4 0.4 0.4 0.4
Page | 52
GR Infraprojects (INR mn)

Early Completion Bonus 76 53 227 1,000 2,098 1463
Net Revenues 31,745 31,028 49,275 59,278 70,346 77,729 88,766 1,04,272
Growth (%) 69.4 (2.3) 58.8 20.3 18.7 10.5 14.2 17.5
Other Operating Expenses 430 440 667 1,206 954 1,209 1,294 1,434
EBITDA 5,388 5,593 9,847 11,413 11,005 11,348 14,687 17,684
EBITDA (%) 17.0 18.0 20.0 19.3 15.6 14.6 16.5 17.0
EBITDA Growth (%) 157.0 3.8 76.1 15.9 (3.6) 3.1 29.4 20.4
Depreciation 636 806 1,381 1,868 2,268 2,816 2,834 3,063
EBIT 4,752 4,786 8,466 9,545 8,737 8,531 11,853 14,621
Other Income (Incl. EO Items and recasted Early
305 571 901 1,938 3,373 2,756 1,636 2,227
completion bonus)
Interest 533 630 1,057 1,452 1,396 1,269 1,103 1,178
PBT 4,524 4,728 8,310 10,030 10,715 10,019 12,387 15,670
Tax 512 800 2,353 3,142 2,908 2,411 3,233 4,085
RPAT 4,012 3,927 5,957 6,888 7,806 7,608 9,154 11,585
Share of associates - - - - - - - -
Less Subsidiaries - Interest income 28 121 266 466 515 917 1,158 1,555
EO items (net of tax)/Bonus earned adjusted for tax -67 -44 -163 -687 -1,529 23 - -
APAT 3,917 3,762 5,528 5,735 5,762 6,714 7,996 10,030
APAT Growth (%) 299.8 (4.0) 47.0 3.7 0.5 16.5 19.1 25.4
EPS 40.5 38.9 57.2 59.3 59.6 69.4 82.7 103.7
EPS Growth (%) 299.8 (4.0) 47.0 3.7 0.5 16.5 19.1 25.4

SOURCES OF FUNDS
Share Capital 485 485 485 485 483 483 483 483
Reserves 10,841 14,911 20,919 27,785 35,561 43,152 52,306 63,891
Minority Interest
Long Term Debt 3,705 4,561 7,996 10,465 10,630 10,472 11,119 9,753
Short Term Debt 246 1,588 2,611 274 2,881 548 3,242 3,601
Total Debt 3,951 6,148 10,607 10,740 13,511 11,020 14,361 13,354
Deferred Taxes 174 63 (685) 646 638 438 438 438
Other Non-Current Liabilities 17 27 0 261 26 5 5 5
Net Block 3,834 6,151 9,025 10,322 13,451 14,846 15,240 15,686
CWIP 168 475 433 280 555 594 594 594
Non-current Investments 1,240 526 19 17 3,320 2,921 1,026 1,026
Investments in BOT projects and other subs 940 2,004 2,735 2,556 0 0 7,636 9,789
Long-term loans and advances 463 3,261 5,061 7,115 11,244 11,391 19,269 27,531
Other Non-Current Assets 110 18 249 325 102 73 73 73
Inventories 2,575 4,622 6,136 7,683 10,584 10,218 12,663 14,766
Debtors 5,295 6,556 8,727 8,168 8,976 7,155 12,057 14,164
Cash & Equivalents 4,150 650 1,713 5,121 1,660 1,086 3,549 251
Margin deposits 1,242 1,717 4,351 3,282 3,756 3,364 3,500 3,500
ST Loans & Advances 2,033 1,770 544 646 123 34 123 123
Other current assets 1,374 1,698 5,163 6,391 9,833 15,457 9,086 10,668
Creditors 2,256 3,251 5,189 5,570 7,229 7,169 8,507 9,993
Page | 53

YE March FY17 FY18 FY19 FY20 FY21 FY22 FY23E FY24E
PAT 4,731 3,487 6,451 8,278 8,026 7,368 9,154 11,585
Non-operating & EO items (1,554) (278) (563) (294) (1,121) (878) (1,636) (2,227)
Interest expenses 533 630 1,057 1,452 1,396 1,269 1,103 1,178
Depreciation 636 806 1,381 1,868 2,268 2,816 2,834 3,063
Working Capital Change (577) (4,686) (1,809) (2,993) (6,370) (4,969) 4,117 (3,015)
OPERATING CASH FLOW ( a ) 3,770 (41) 6,516 8,312 4,199 5,606 15,571 10,584
Capex 192 (2,817) (4,653) (2,838) (5,074) (4,227) (3,228) (3,509)
Free cash flow (FCF) 3,962 (2,858) 1,864 5,474 (875) 1,379 12,344 7,075
Investments 1,038 -3,501 -4,407 -355 -4,179 1,854 -11,983 -8,188
Other non-operating income
INVESTING CASH FLOW ( b ) 1,229 (6,317) (9,059) (3,193) (9,252) (2,373) (15,211) (11,697)
Share capital Issuance 0 0 0 0 (14) 0 0 0
Debt Issuance 276 1,763 3,456 1,216 2,828 (2,676) 3,341 (1,007)
Interest expenses (458) (500) (725) (1,666) (1,222) (1,131) (1,103) (1,178)
Dividend 0 0 0 0 0 0 0 0
Others 0 0 0 0 0 0 0 0
FINANCING CASH FLOW ( c ) (182) 1,263 2,731 (450) 1,592 (3,807) 2,238 (2,185)
NET CASH FLOW (a+b+c) 4,818 (5,096) 188 4,669 (3,461) (574) 2,599 (3,298)
Opening cash balance 551 5,368 272 460 5,121 1,660 1,086 3,549
Cash not included in Cash and Cash Equivalents (1,219) 377 1,254 (8) 0 (136)
Closing Cash & Equivalents 4,150 650 1,713 5,121 1,660 1,086 3,549 251
Key Ratios
PROFITABILITY (%)
GPM 22.4 25.2 28.4 28.8 23.5 23.7 25.4 25.3
EBITDA Margin 17.0 18.0 20.0 19.3 15.6 14.6 16.5 17.0
EBIT Margin 15.0 15.4 17.2 16.1 12.4 11.0 13.4 14.0
APAT Margin 12.3 12.1 11.2 9.7 8.2 8.6 9.0 9.6
RoE 46.9 28.2 30.0 23.1 17.9 16.9 16.6 17.1
Core RoCE 42.5 25.3 27.8 26.1 17.1 15.2 23.6 26.6
RoCE 28.4 19.8 20.1 16.9 13.5 13.9 13.0 13.9
EFFICIENCY
Tax Rate (%) 11.3 16.9 28.3 31.3 27.1 24.1 26.1 26.1
Asset Turnover (x) 8.3 5.0 5.5 5.7 5.2 5.2 5.8 6.6
Inventory (days) 30 54 45 47 55 48 52 52
Debtors (days) 61 77 65 50 47 34 50 50
Payables (days) 26 38 38 34 38 34 35 35
Debt/EBITDA (x) 0.7 1.1 1.1 0.9 1.2 1.0 1.0 0.8
Net D/E (0.0) 0.4 0.4 0.2 0.3 0.2 0.2 0.2
PER SHARE DATA
EPS (INR/sh) 40.5 38.9 57.2 59.3 59.6 69.4 82.7 103.7
CEPS (INR/sh) 47.1 47.2 71.5 78.6 83.1 98.6 112.0 135.4
DPS (INR/sh) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
BV (INR/sh) 117 159 221 292 373 451 546 666
VALUATION
P/E 34.7 36.1 24.6 23.7 23.6 20.2 17.0 13.5
Core P/E 31.4 32.7 22.2 21.4 21.3 18.3 15.3 12.2
P/BV 12.0 8.8 6.4 4.8 3.8 3.1 2.6 2.1
EV/EBITDA 25.2 25.3 14.7 12.4 13.4 12.9 10.0 8.4
OCF/EV (%) 2.8 (0.0) 4.5 5.9 2.8 3.8 10.6 7.1
FCF/EV (%) 2.9 (2.0) 1.3 3.9 (0.6) 0.9 8.4 4.8
FCFE/Market Cap (%) 2.8 (1.2) 3.4 3.7 0.5 (1.8) 10.8 3.6
Dividend Yield (%) - - - - - - - -
Page | 54
HG Infra (INR mn)

Net Revenues (post JV partner share) 10,560 13,927 20,098 21,961 25,275 36,152 44,468 47,136
Growth (%) 48.2 31.9 44.3 9.3 15.1 43.0 23.0 6.0
Employee Expenses 408 761 1,191 1,114 1,093 1,279 1,420 1,576
EBITDA 1,243 2,081 3,033 3,423 4,107 5,847 6,704 7,047
EBITDA (%) 11.8 14.9 15.1 15.6 16.2 16.2 15.1 14.9
EBITDA Growth (%) 59.3 67.3 45.8 12.9 20.0 42.4 14.6 5.1
Depreciation 256 539 755 756 844 851 956 1,061
EBIT 987 1,541 2,278 2,667 3,262 4,997 5,748 5,986
Other Income (Incl. EO Items) 34 47 115 137 154 78 136 146
Interest 189 401 490 524 596 528 677 808
PBT 833 1,187 1,903 2,280 2,821 4,546 5,208 5,324
Tax 300 345 667 623 712 1,159 1,311 1,340
RPAT 533 842 1,236 1,657 2,110 3,388 3,897 3,984
EO items (net of tax) - - - - - - - -
APAT 533 842 1,236 1,657 2,110 3,388 3,897 3,984
APAT Growth (%) 76.6 58.0 46.7 34.0 27.3 60.6 15.0 2.2
EPS 8.2 12.9 19.0 25.4 32.4 52.0 59.8 61.1
EPS Growth (%) 76.6 58.0 46.7 34.0 27.3 60.6 15.0 2.2

SOURCES OF FUNDS
Share Capital 180 652 652 652 652 652 652 652
Reserves 1,581 4,757 5,941 7,565 9,671 12,992 16,889 20,873
Minority Interest
Long Term Debt 635 1,247 593 640 945 1,598 1,313 1,433
Short Term Debt 1,406 2,823 3,223 3,040 1,953 1,556 3,156 3,316
Total Debt 2,041 4,070 3,817 3,681 2,898 3,154 4,469 4,749
Deferred Taxes (23) (61) (84) (87) (95) (114) (114) (114)
Other Non-Current Liabilities 295 489 575 809 878 110 1,179 1,253
Net Block 2,044 4,119 4,619 4,824 4,820 4,491 4,691 4,891
CWIP 7 86 - 111 18 22 - -
Investments - - 200 908 2,612 3,545 8,922 11,322
Other Non-Current Assets 257 392 239 284 209 481 1,218 1,033
Inventories 484 1,068 1,161 1,055 1,680 1,836 2,187 2,583
Debtors 1,128 2,802 4,752 6,241 4,346 6,953 8,556 9,231
Cash & Equivalents 170 1,656 297 240 1,399 472 612 1,920
ST Loans & Advances, Others 317 502 567 684 589 1,204 365 387
Other Assets 1,293 4,158 3,768 6,250 6,027 4,708 7,994 7,551
Creditors 869 2,793 3,461 5,437 4,146 4,320 7,310 7,103
Other Current Liabilities & Provisions 755 2,084 1,242 2,543 3,553 2,598 4,143 4,386
Page | 55

PBT 833 1,187 1,903 2,280 2,821 4,546 5,208 5,324
Non-operating & EO items 2 (30) (7) 83 (55) (55) (136) (146)
Depreciation 256 539 755 756 844 851 956 1,061
Working Capital Change (388) (1,763) (1,702) (363) 1,753 (3,626) 466 (356)
Tax paid (245) (412) (578) (732) (685) (1,104) (1,311) (1,340)
OPERATING CASH FLOW ( a ) 647 (78) 861 2,548 5,273 1,140 5,859 5,351
Capex (1,086) (2,523) (1,282) (931) (865) (574) (1,116) (1,261)
Free cash flow (FCF) (439) (2,601) (421) 1,617 4,408 566 4,743 4,091
Investments (76) (385) (248) (756) (1,902) (1,214) (5,377) (2,400)
Non-operating income 24 38 92 67 66 59 136 146
INVESTING CASH FLOW ( b ) (1,137) (2,870) (1,438) (1,620) (2,701) (1,729) (6,357) (3,515)
Share capital Issuance - 2,806 - - - - - -
Debt Issuance 809 2,021 (254) (149) (819) 242 1,315 280
Dividend - - (39) (39) - (52)
FINANCING CASH FLOW ( c ) 620 4,434 (782) (720) (1,412) (338) 638 (528)
NET CASH FLOW (a+b+c) 130 1,486 (1,359) 208 1,160 (927) 140 1,308
Bank balances other than C&CE (0) 0 (0) (266) (0) 0 - -
Closing Cash & Equivalents 170 1,656 297 240 1,399 472 612 1,920
Key Ratios
PROFITABILITY (%)
GPM 16.6 21.5 22.5 22.3 21.6 20.7 19.2 19.3
EBITDA Margin 11.8 14.9 15.1 15.6 16.2 16.2 15.1 14.9
EBIT Margin 9.3 11.1 11.3 12.1 12.9 13.8 12.9 12.7
APAT Margin 5.0 6.0 6.2 7.5 8.3 9.4 8.8 8.5
RoE 35.2 23.5 20.6 22.4 22.8 28.3 25.0 20.4
Core RoCE 16.2 13.3 14.2 16.9 24.4 29.1 31.8 31.6
RoCE 16.0 11.4 14.3 16.1 18.2 22.5 19.1 16.7
EFFICIENCY
Tax Rate (%) 36.0 29.1 35.0 27.3 25.2 25.5 25.2 25.2
Asset Turnover (x) 4.6 2.8 3.3 3.1 3.5 2.9 3.4 2.6
Inventory (days) 17 28 21 18 24 19 18 20
Debtors (days) 39 73 86 104 63 70 70 71
Payables (days) 30 73 63 90 60 44 60 55
Debt/EBITDA (x) 1.6 2.0 1.3 1.1 0.7 0.5 0.7 0.7
Net D/E 1.1 0.4 0.5 0.4 0.1 0.2 0.2 0.1
PER SHARE DATA
EPS (INR/sh) 8.2 12.9 19.0 25.4 32.4 52.0 59.8 61.1
CEPS (INR/sh) 12.1 21.2 30.5 37.0 45.3 65.0 74.5 77.4
DPS (INR/sh) 0.0 0.0 0.6 0.6 0.0 0.8 0.0 0.0
BV (INR/sh) 27 83 101 126 158 209 269 330
VALUATION
P/E 71.2 45.1 30.7 22.9 18.0 11.2 9.7 9.5
P/BV 21.6 7.0 5.8 4.6 3.7 2.8 2.2 1.8
EV/EBITDA 32.0 19.4 13.7 12.1 9.6 7.0 6.2 5.8
OCF/EV (%) 0.0 (0.0) 0.0 0.1 0.1 0.0 0.1 0.1
FCF/EV (%) (1.1) (6.4) (1.0) 3.9 11.2 1.4 11.3 10.0
FCFE/Market Cap (%) 0.5 (2.6) (3.1) 2.5 7.9 0.7 14.2 9.4
Dividend Yield (%) 0.0 0.0 0.1 0.1 0.0 0.1 0.0 0.0
Page | 56
IRB Infra (INR mn)

Consolidated Income Statement
Net Revenues 58,459 56,941 67,070 68,522 52,986 58,037 68,275 75,678
Growth (%) 14.0 (2.6) 17.8 2.2 (22.7) 9.5 17.6 10.8
Other Operating Expenses 2,384 3,267 3,636 3,411 3,622 3,404 2,799 3,406
EBITDA 30,483 26,795 29,372 29,714 25,127 27,975 30,724 32,920
EBITDA Margin (%) 52.1 47.1 43.8 43.4 47.4 48.2 45.0 43.5
EBITDA Growth (%) 14.6 (12.1) 9.6 1.2 (15.4) 11.3 9.8 7.1
Depreciation 8,548 5,440 5,395 4,683 5,817 6,828 8,133 8,703
EBIT 21,935 21,355 23,977 25,031 19,310 21,147 22,590 24,218
Other Income (Incl EO items) 1,232 2,954 1,956 2,523 1,889 5,517 4,778 2,119
Interest 13,327 9,667 11,201 15,644 16,924 18,906 14,937 14,954
PBT 9,839 14,642 14,732 11,911 4,274 7,758 12,431 11,383
Tax 2,685 5,444 6,234 4,544 1,445 1,882 3,130 3,583
RPAT 7,154 9,198 8,499 7,367 2,829 5,876 9,301 7,799
Minority Interest/Share of associates (1) - - 158 1,658 (2,262) (751) (751)
Share Profit/(loss) from associates - - - - - - - -
EO Items 150 (1,267) - (574) - - (2,680) -
APAT 7,004 7,931 8,499 6,635 1,171 3,614 5,869 7,048
APAT Growth (%) 12.3 13.2 7.2 (21.9) (82.3) 208.5 62.4 20.1
Adjusted EPS (INR/sh) 11.6 13.1 14.1 11.0 1.9 6.0 9.7 11.7
EPS Growth (%) 12.3 13.2 7.2 (21.9) (82.3) 208.5 62.4 20.1
Consolidated Balance Sheet

SOURCES OF FUNDS
Share Capital 3,515 3,515 3,515 3,515 3,515 6,039 6,039 6,039
Reserves 49,201 53,410 59,637 63,314 65,493 1,19,617 1,25,607 1,31,020
Total Shareholders’ Funds 52,716 56,925 63,151 66,829 69,008 1,25,656 1,31,646 1,37,059
Long Term Debt 1,20,897 1,18,313 1,44,076 64,581 1,65,034 1,56,314 1,44,534 1,50,534
Short Term Debt 18,734 19,944 21,855 20,660 15,817 6,916 21,122 21,122
Total Debt 1,39,631 1,38,257 1,65,931 85,241 1,80,851 1,63,230 1,65,656 1,71,656
Net Deferred Taxes -3,901 -3,205 -1,351 -570 -570 -435 -570 -570
Other Non-Current Liabilities 1,59,597 1,94,300 1,35,873 1,39,354 1,25,238 1,18,738 1,21,238 1,19,238
TOTAL SOURCES OF FUNDS 3,48,043 3,86,276 3,63,604 2,90,853 3,74,527 4,07,188 4,17,971 4,27,383
Net Block (Inc CWIP) 3,11,942 3,67,191 3,67,398 2,80,735 2,77,751 2,73,336 2,77,180 2,76,434
Investments 1,459 7,617 6,131 41,331 44,867 44,407 56,867 62,867
Other Non-Current Assets 1,244 712 928 31,043 33,508 49,360 32,366 31,795
Total Non-current Assets 3,14,644 3,75,520 3,74,458 3,53,108 3,56,126 3,67,104 3,66,413 3,71,096
Inventories 3,527 4,873 4,425 3,314 3,217 3,175 3,347 3,414
Debtors 705 1,326 1,135 4,408 3,403 9,935 4,027 4,349
Cash & Equivalents 13,077 14,516 15,926 22,835 26,512 17,438 17,438 17,438
Current liabilities 11,828 19,315 46,274 1,07,308 36,375 16,558 37,845 38,602
Provisions 87 93 410 124 124 596 124 124
Total Current Liabilities 11,914 19,408 46,684 1,07,432 36,499 17,154 37,968 38,725
Net Current Assets 33,399 10,756 (10,853) (62,256) 18,401 40,085 14,413 17,595
TOTAL APPLICATION OF FUNDS 3,48,043 3,86,276 3,63,604 2,90,853 3,74,527 4,07,188 4,17,971 4,27,383
Page | 57
Consolidated Cash Flow

Reported PBT 9,839 14,642 14,732 11,911 4,274 5,656 12,431 11,383
Non-operating & EO items (548) (2,347) (1,891) (2,835) (2,585) (2,098) (2,098) (2,119)
Depreciation 8,548 5,440 5,395 4,683 5,817 6,937 8,133 8,703
Working Capital Change 4,032 (1,062) 1,144 12,396 (13,591) (3,778) (4,165) (4,611)
Tax Paid (3,106) (5,015) (3,483) (3,837) (2,171) (1,527) (3,130) (3,583)
Capex (27,790) (39,701) (42,172) (52,052) (77,933) (15,245) 746 (7,956)
Free cash flow (FCF) 4,303 (18,376) (15,074) (14,091) (69,265) 8,870 26,854 16,769
Investments + Interest Income (2,192) 13,485 1,358 5,055 (2,305) (3,902) (3,902) (3,881)
Share capital Issuance - - - - - 53,470 - -
Debt Issuance 16,339 16,431 25,990 25,933 91,932 (21,195) 6,000 6,000
Dividend (846) (3,384) (1,059) (50) (1,757) (786) (1,983) (1,635)
FINANCING CASH FLOW ( c ) (2,016) 4,102 14,376 13,056 75,199 12,563 (10,921) (10,589)
NET CASH FLOW (a+b+c) 94 (789) 660 4,020 3,628 17,531 12,031 2,299
EO Items, Others
Key Ratios
PROFITABILITY (%)
GPM 60.9 57.9 53.5 52.5 59.2 59.0 53.9 53.0
EBITDA Margin 52.1 47.1 43.8 43.4 47.4 48.2 45.0 43.5
EBIT Margin 37.5 37.5 35.7 36.5 36.4 36.4 33.1 32.0
APAT Margin 12.0 13.9 12.7 9.7 2.2 6.2 8.6 9.3
RoE 13.9 14.5 14.2 10.2 1.7 3.7 4.6 5.2
RoIC 4.4 3.8 3.9 5.4 4.8 4.9 4.9 4.8
RoCE 4.4 3.8 4.0 5.0 3.7 4.6 4.1 4.1
EFFICIENCY
Tax Rate (%) 27.3 37.2 42.3 38.1 33.8 24.3 25.2 31.5
Inventory (days) 22.0 31.2 24.1 17.7 22.2 20.0 17.9 16.5
Debtors (days) 4.4 8.5 6.2 23.5 23.4 62.5 21.5 21.0
Other Current Assets (days) 174.7 60.6 78.1 77.9 149.9 167.9 147.4 150.1
Current Liab (days) 73.8 123.8 251.8 571.6 250.6 104.1 202.3 186.2
Provision (days) 0.5 0.6 2.2 0.7 0.9 3.7 0.7 0.6
Cash Conversion Cycle (days) 126.7 (24.1) (145.7) (453.3) (55.9) 142.4 (16.2) 0.8
Debt/EBITDA (x) 4.6 5.2 5.6 2.9 7.2 5.8 5.4 5.2
Net D/E 2.4 2.2 2.4 0.9 2.2 1.2 1.1 1.1
PER SHARE DATA
EPS (INR/sh) 11.6 13.1 14.1 11.0 1.9 6.0 9.7 11.7
CEPS (INR/sh) 25.8 22.1 23.0 18.7 11.6 17.3 23.2 26.1
DPS (INR/sh) 4.1 5.2 4.8 4.1 0.7 1.1 2.8 2.3
BV (INR/sh) 87.3 94.3 104.6 110.7 114.3 208.1 218.0 227.0
VALUATION
P/E 23.0 20.3 19.0 24.3 137.7 44.6 27.5 22.9
P/BV 3.1 2.8 2.6 2.4 2.3 1.3 1.2 1.2
EV/EBITDA 9.4 10.6 10.6 7.5 12.6 11.0 10.1 9.6
EV/Revenues 4.9 5.0 4.6 3.3 6.0 5.3 4.5 4.2
OCF/EV (%) 0.1 0.1 0.1 0.2 0.0 0.1 0.1 0.1
FCF/EV (%) 1.5 (6.4) (4.8) (6.3) (21.9) 2.9 8.7 5.3
FCFE/Market Cap (%) 1.9 (6.7) 0.2 (0.6) 4.8 (19.4) 11.1 4.8
Dividend Yield (%) 1.5 2.0 1.8 1.5 0.2 0.4 1.1 0.9
Page | 58
ITD Cementation (INR mn)

Year ending March CY17 15MFY19 FY19 FY20 FY21 FY22 FY23E FY24E
Net Revenues 20,605 31,705 25,037 28,607 27,277 38,090 46,695 55,101
Growth (%) (29.9) 53.9 21.5 14.3 (4.6) 39.6 22.6 18.0
EBITDA 2,714 3,225 2,492 2,956 2,129 2,931 4,177 5,603
EBITDA (%) 13.2 10.2 10.0 10.3 7.8 7.7 8.9 10.2
EBITDA Growth (%) 2.7 18.8 (8.2) 18.6 (28.0) 37.7 42.5 34.2
Depreciation 577 824 676 965 1,002 1,025 1,021 1,133
EBIT 2,137 2,401 1,815 1,991 1,127 1,905 3,156 4,470
Other Income (incl. EO Items) 135 190 224 (362) 124 119 162 129
Interest 876 1,243 1,013 1,305 1,382 1,416 1,615 1,718
PBT 1,396 1,347 1,027 324 (130) 608 1,703 2,882
Tax 528 513 469 163 41 244 482 772
Profits from Associates (138) (1) (10) 278 330 330 304 52
RPAT 729 833 547 439 159.44 693 1,525 2,162
Minority Interest - 13 (6) - 2 5 - -
Share of associates - - - - - - -
EO items (net of tax) 218 - 409 - - - -
APAT 947 819 554 848 157 688 1,525 2,162
APAT Growth (%) 85.0 (13.5) (41.6) 53.1 (81.4) 337 121.7 41.7
Adj. EPS 6.6 5.7 3.8 4.9 0.9 4.0 8.9 12.6
EPS Growth (%) 85.0 (13.5) (41.6) 28.7 (81.4) 336.9 121.7 41.7

As at March CY17 15MFY19 FY19 FY20 FY21 FY22 FY23E FY24E
SOURCES OF FUNDS
Share Capital 144 144 144 172 172 172 172 172
Reserves 6,018 10,037 10,037 10,354 10,485 11,140 12,987 15,149
Minority Interest - - - 28 30 35 30 30
Long Term Debt 662 279 279 297 1,058 874 1,058 1,058
Short Term Debt 4,224 5,044 5,044 4,441 2,742 4,277 3,192 3,442
Total Debt 4,886 5,323 5,323 4,739 3,800 5,151 4,250 4,500
Deferred Taxes -17 -52 -52 -20 -51 -61 -51 -51
Long Term Provisions & Others 111 155 155 853 712 689 712 712
APPLICATION OF FUNDS -
Net Block 4,617 5,293 5,293 6,237 6,031 6,549 6,584 6,751
CWIP 385 73 73 49 534 20 623 672
Goodwill -
Investments - 1,129 1,138 499
Other Non-Current Assets (Net) 2,171 1,388 1,388 1,572 3,255 2,204 3,255 3,255
Inventories 1,574 2,461 2,461 2,894 3,373 4,002 5,117 5,284
Debtors 2,429 4,396 4,396 5,851 5,309 6,219 8,316 9,812
Cash & Equivalents 1,158 1,087 2,814 2,814 2,070 4,915 743 276
ST Loans & Advances, Others 11,607 11,198 11,198 11,619 11,280 11,066 15,352 16,606
Trade Payables 6,217 5,592 5,592 6,567 7,560 9,373 10,235 12,077
Other Liabilities 6,572 4,670 4,670 8,345 9,143 9,605 12,793 10,567
Page | 59

Year ending March CY17 15MFY19 FY19 FY20 FY21 FY22 FY23E FY24E
PBT 1,257 1,347 1,347 601 200 938 1,703 2,882
Non-operating & EO items/JV profits 201 (30) (30) 142 (409) (314) 143 (77)
Interest expenses 876 1,243 1,243 1,305 1,382 1,416 1,615 1,718
Depreciation 577 824 824 965 1,002 1,025 1,021 1,133
Working Capital Change (2,271) (4,169) (4,169) 2,187 396 914 (4,489) (3,301)
Tax paid 42 (557) (557) (435) (220) (592) (482) (772)
OPERATING CASH FLOW ( a ) 682 (1,342) (1,342) 4,765 2,350 3,387 (490) 1,582
Capex (1,707) (1,249) (1,249) (1,097) (1,114) (952) (1,328) (711)
Others - - - - - - - -
Free cash flow (FCF) (1,025) (2,591) (2,591) 3,668 1,236 2,435 (1,818) 871
Investments 2 85 85 (73) 272 704 162 129
INVESTING CASH FLOW ( b ) (1,705) (1,164) (1,164) (1,169) (841) (247) (1,167) (582)
Share capital Issuance - 3,312 3,312 - - - - -
Debt Issuance 1,324 437 437 (891) (1,269) 811 (901) 250
Interest expenses (872) (1,231) (1,231) (1,148) (1,284) (1,347) (1,615) (1,718)
FCFE (573) (3,385) (3,385) 1,629 (1,316) 1,899 (4,334) (596)
Dividend (56) (83) (83) (83) (51) (21) - -
FINANCING CASH FLOW ( c ) 396 2,435 2,435 (2,121) (2,604) (557) (2,516) (1,468)
NET CASH FLOW (a+b+c) (627) (71) (71) 1,474 (1,096) 2,583 (4,172) (467)
Non-operating and EO items - 254 351 262
Closing Cash & Equivalents 1,158 1,087 1,087 2,814 2,070 4,915 743 276
Key Ratios
Particulars CY17 15MFY19 FY19 FY20 FY21 FY22 FY23E FY24E
PROFITABILITY (%)
GPM 47.3 41.1 40.8 38.7 39.7 36.8 38.8 37.6
EBITDA Margin 13.2 10.2 10.0 10.3 7.8 7.7 8.9 10.2
APAT Margin 4.6 2.6 2.2 3.0 0.6 1.8 3.3 3.9
RoE 16.2 8.0 6.8 8.2 1.5 6.2 12.5 15.2
Core RoCE 13.3 8.2 7.7 7.4 15.0 11.4 16.0 19.3
RoCE 13.4 8.1 7.1 9.3 13.0 9.0 14.8 16.7
EFFICIENCY
Tax Rate (%) 37.8 38.1 45.7 50.4 (31.1) 40.2 28.3 26.8
Asset Turnover (x) 3.7 4.6 3.6 3.3 3.0 2.6 3.1 3.2
Inventory (days) 28 36 36 37 45 38 40 35
Debtors (days) 43 65 64 75 71 60 65 65
Payables (days) 110 82 82 84 101 90 80 80
Other Current liabilities (days) 116 69 68 106 122 92 100 70
NWC (days) 50 115 114 70 44 22 45 60
Debt/EBITDA (x) 1.8 1.7 2.1 1.6 1.8 1.8 1.0 0.8
Net D/E 0.61 0.4 0.2 0.2 0.2 0.0 0.3 0.3
PER SHARE DATA
EPS (INR/sh) 6.6 5.7 3.8 4.9 0.9 4.0 8.9 12.6
CEPS (INR/sh) 9.0 11.5 8.5 8.2 6.8 10.0 14.8 19.2
DPS (INR/sh) 0.3 0.3 0.3 0.3 1.0 1.0 1.0 1.0
BV (INR/sh) 42.7 70.5 70.5 61.3 62.0 65.8 76.6 89.2
VALUATION
P/E 13.4 15.5 22.9 17.8 96.0 22.0 9.9 7.0
P/BV 2.1 1.2 1.2 1.4 1.4 1.3 1.1 1.0
EV/EBITDA 6.1 5.3 6.1 5.8 7.9 5.2 4.5 3.5
EV/Revenues 0.8 0.5 0.6 0.6 0.6 0.4 0.4 0.4
OCF/EV (%) 4.1 (7.9) (7.1) 28.0 13.9 22.1 (2.6) 8.2
FCF/EV (%) (6.2) (15.3) (13.6) 21.5 7.3 15.9 (9.8) 4.5
FCFE/Market Cap (%) (4.5) (26.6) (21.3) 10.8 (8.7) 12.6 (28.7) (3.9)
Dividend Yield (%) 0.3 0.3 0.3 0.3 1.1 1.1 1.1 1.1
Page | 60
J Kumar Infraprojects (INR mn)

Net Sales 16,043 20,507 27,871 29,705 25,708 35,272 40,433 46,498
Growth (%) 13.9 27.8 35.9 6.6 (13.5) 37.2 14.6 15.0
EBITDA 2,505 3,212 4,363 4,289 3,114 5,046 5,743 6,528
EBITDA (%) 15.6 15.7 15.7 14.4 12.1 14.3 14.20 14.04
EBITDA Growth (%) 0.9 28.2 35.8 (1.7) (27.4) 62.1 13.8 13.7
Depreciation 556 727 1,022 1,263 1,437 1,468 1,503 1,593
EBIT 1,949 2,485 3,341 3,027 1,677 3,578 4,240 4,935
Interest 662 704 939 977 1,044 1,000 1,073 1,073
PBT 1,598 2,066 2,683 2,333 886 2,827 3,427 4,135
Tax 525 701 912 497 247 768 874 1,075
RPAT 1,073 1,365 1,771 1,836 639 2,059 2,553 3,060
EO items (net of tax) (50) (37) - - - - - -
APAT 1,023 1,328 1,771 1,836 639 2,059 2,553 3,060
APAT Growth (%) (0.7) 29.8 33.4 3.7 (65.2) 222.1 24.0 19.9
EPS 13.5 17.5 23.4 24.3 8.4 27.2 33.7 40.4
EPS Growth (%) (0.7) 29.8 33.4 3.7 (65.2) 222.1 24.0 19.9

SOURCES OF FUNDS
Share Capital 378 378 378 378 378 378 378 378
Reserves 13,530 14,709 16,297 17,931 18,491 20,488 22,791 25,683
Long Term Debt 530 2,153 2,286 1,951 1,239 716 1,039 939
Short Term Debt 3,838 3,651 4,625 4,787 4,070 3,596 4,270 4,370
Total Debt 4,368 5,804 6,911 6,738 5,310 4,312 5,310 5,310
Deferred Taxes 184 289 366 274 246 238 246 246
Net Block 5,114 7,161 7,788 8,545 8,056 7,896 6,545 5,852
CWIP 712 1,262 798 987 1,498 1,518 1,498 1,498
Investments 3 150 316 12 16 22 36 46
Inventories 6,436 8,143 9,187 3,126 2,861 3,657 4,117 4,763
Debtors 4,861 5,288 4,986 6,448 6,198 8,880 8,749 10,122
Cash & Equivalents 1,006 975 704 591 457 2,736 4,679 7,367
ST Loans & Advances, Others 638 788 338 646 646 358 876 1,014
Creditors 1,803 3,292 3,029 4,604 4,578 5,729 6,382 7,383
Total Current Liabilities & Provisions 9,171 12,435 11,022 11,474 12,026 14,191 16,741 19,408
Page | 61

Reported PBT 1,598 2,066 2,683 2,333 886 2,711 3,427 4,135
Non-operating & EO items -9 8 -16 2 -5 0 0 0
Interest expenses (Net) 429 455 686 746 864 754 813 800
Depreciation 556 727 1,022 1,263 1,437 1,508 1,503 1,593
Working Capital Change -2,023 77 -2,811 -820 902 -1,174 -396 -886
Tax Paid -746 -685 -738 -934 -396 -718 -874 -1,075
OPERATING CASH FLOW ( a ) -195 2,648 826 2,589 3,687 3,080 4,473 4,567
Capex -1,400 -3,328 -1,096 -1,149 -1,282 -700 -800 -900
Free cash flow (FCF) -1,595 -680 -270 1,440 2,405 2,380 3,673 3,667
Investments + interest 2,048 99 14 -77 168 237 249 262
INVESTING CASH FLOW ( b ) 648 -3,229 -1,082 -1,226 -1,113 -463 -551 -638
Share capital Issuance 0 0 0 0 0 0 0 0
Debt Issuance 947 1,435 1,107 -173 -1,600 0 0 0
Interest expenses -662 -703 -939 -1,098 -1,013 -1,001 -1,073 -1,073
Dividend -182 -182 -182 -205 -95 -76 -169 -169
FINANCING CASH FLOW ( c ) 103 550 -15 -1,475 -2,708 -1,077 -1,241 -1,241
NET CASH FLOW (a+b+c) 556 -31 -271 -112 -134 1,541 2,681 2,688
Closing Cash & Equivalents 1,006 975 704 591 457 2,736 4,679 7,367
Key Ratios
PROFITABILITY (%)
GPM 39.8 41.1 38.3 38.8 37.3 35.7 35.9 35.5
EBITDA Margin 15.6 15.7 15.7 14.4 12.1 14.3 14.2 14.0
EBIT Margin 12.1 12.1 12.0 10.2 6.5 10.1 10.5 10.6
APAT Margin 6.4 6.5 6.4 6.2 2.5 5.8 6.3 6.6
RoE 7.7 9.2 11.1 10.5 3.4 10.4 11.6 12.4
Core RoCE 13.7 14.4 17.1 14.3 7.8 16.9 18.4 19.0
RoCE 12.7 14.4 17.1 14.3 7.8 16.9 18.4 19.0
EFFICIENCY
Tax Rate (%) 32.9 33.9 34.0 21.3 27.8 27.2 25.5 26.0
Asset Turnover (x) 2.6 2.3 2.6 2.4 1.9 1.7 1.6 1.7
Inventory (days) 146 145 120 38 41 38 37 37
Debtors (days) 111 94 65 79 88 92 79 79
Payables (days) 41 59 40 57 65 59 58 58
Loans & Advances (days) 15 14 4 8 9 4 8 8
Other Assets (days) 145 127 98 159 191 107 135 126
Other Liab (days) 168 163 105 84 106 88 94 94
NWC (days) 208 159 144 144 158 93 108 98
Debt/EBITDA (x) 1.7 1.8 1.6 1.6 1.7 0.9 0.9 0.8
Net D/E 0.2 0.3 0.4 0.4 0.3 0.1 0.0 (0.1)
PER SHARE DATA
EPS (INR/sh) 13.5 17.5 23.4 24.3 8.4 27.2 33.7 40.4
CEPS (INR/sh) 20.9 27.2 36.9 41.0 27.4 46.6 53.6 61.5
DPS (INR/sh) 2.0 2.0 2.0 2.2 1.0 2.2 2.2 2.2
BV (INR/sh) 183.8 199.4 220.4 242.0 249.4 275.8 306.2 344.4
VALUATION
P/E 24.6 18.9 14.2 13.7 39.3 12.2 9.8 8.2
P/BV 1.8 1.7 1.5 1.4 1.3 1.2 1.1 1.0
EV/EBITDA 11.4 9.3 7.2 7.3 9.6 5.3 4.5 3.5
OCF/EV (%) (0.7) 8.8 2.6 8.3 12.3 11.5 17.4 19.8
FCF/EV (%) (5.6) (2.3) (0.9) 4.6 8.0 8.9 14.3 15.9
FCFE/Market Cap (%) (5.2) 0.2 (0.4) 0.7 (0.8) 5.5 10.3 10.3
Dividend Yield (%) 0.6 0.6 0.6 0.7 0.3 0.7 0.7 0.7
Page | 62
JMC Projects (INR mn)

Net Revenues 23,284 27,556 32,528 37,130 36,888 53,529 57,882 65,231
Growth (%) (3.0) 18.3 18.0 14.1 (0.7) 45.1 8.1 12.7
Material Expenses (incl. construction cost) 17,365 20,525 25,057 28,151 28,714 42,973 44,953 50,300
Operating Profits 2,111 2,848 3,371 4,114 3,315 4,207 5,094 6,001
Operating Profit Margin (%) 9.1 10.3 10.4 11.1 9.0 7.9 8.8 9.2
EBITDA 2,111 2,848 3,371 4,114 3,315 4,207 5,094 6,001
EBITDA (%) 9.1 10.3 10.4 11.1 9.0 7.9 8.8 9.2
EBITDA Growth (%) (1.2) 34.9 18.4 22.0 (19.4) 26.9 21.1 17.8
Depreciation 574 717 781 1,173 1,424 1,672 1,528 1,813
EBIT 1,538 2,131 2,589 2,940 1,892 2,535 3,566 4,189
Other Income (Incl. EO Items) 137 176 248 274 268 - 3,476 232 237
Interest 832 858 951 1,252 1,138 1,204 1,381 1,529
PBT 843 1,450 1,887 1,963 1,021 - 2,145 2,417 2,896
Tax 244 388 464 379 310 - 575 608 729
RPAT 599 1,061 1,423 1,584 711 - 1,570 1,808 2,167
EO items (net of tax) - - - 794 (3,806) - -
APAT 599 1,061 1,423 2,378 711 1,094 1,808 2,167
APAT Growth (%) 35.5 77.2 34.1 67.2 (70.1) 53.9 65.3 19.9
EPS 3.6 6.3 8.5 14.2 4.2 6.5 10.8 12.9
EPS Growth (%) 35.5 77.2 34.1 67.2 (70.1) 53.9 65.3 19.9

SOURCES OF FUNDS
Share Capital 336 336 336 336 336 336 336 336
Reserves 6,561 7,554 8,898 9,363 9,848 8,464 10,160 12,200
Minority Interest 0 0 0 0 0 0 0 0
Long Term Debt 2,313 3,143 3,904 4,969 3,504 3,060 4,298 4,298
Short Term Debt 4,050 4,223 3,663 3,420 4,343 6,721 5,034 4,471
Total Debt 6,363 7,366 7,567 8,389 7,847 9,781 9,332 8,769
Deferred Taxes -363 -352 -363 -475 -562 -1,524 -1,524 -1,524
Net Block (incl. CWIP) 3,714 4,222 5,019 5,732 5,686 6,212 5,404 4,599
Investments 6,401 7,036 7,446 8,001 8,552 7,048 8,148 8,548
Other Non-Current Assets 1,035 627 585 1,111 1,332 2,920 2,515 2,664
Inventories 1,795 1,923 2,481 2,412 2,324 3,084 3,965 4,468
Debtors 6,576 7,358 9,226 9,097 9,386 10,047 14,272 16,084
Cash & Equivalents 260 1,460 771 538 2,142 2,416 1,544 2,277
ST Loans & Advances 81 222 247 487 511 711 540 600
Other Assets 8,110 10,957 13,295 13,975 14,681 18,048 15,682 17,824
Creditors 7,439 8,286 11,722 11,626 13,121 15,091 15,858 17,872
Other Current Liabilities & Provns 2,394 4,755 5,113 7,687 7,610 9,790 8,673 9,018
Page | 63

PBT 843 1,450 1,887 1,963 1,021 -2,145 2,417 2,896
Non-operating & EO items -124 470 -146 705 2,241 3,926 -232 -237
Interest expenses 832 858 951 1,304 -1,194 1,232 1,381 1,529
Depreciation 574 717 781 1,173 1,424 1,672 1,528 1,813
Working Capital Change 533 -713 -1,095 -768 1,682 -1,379 -1,821 -1,159
Tax paid -158 -223 -519 8 30 10 -608 -729
Capex -771 -899 -1,504 -1,862 -1,100 -1,758 -719 -1,008
Free cash flow (FCF) 1,728 1,659 354 2,524 4,104 1,559 1,945 3,105
Investments 0 -635 -410 -785 -450 -2,488 -1,100 -400
Interest Income 96 121 221 -495 -343 223 232 237
INVESTING CASH FLOW ( b ) -675 -1,413 -1,693 -3,142 -1,893 -4,023 -1,587 -1,171
Share capital Issuance 0 0 0 0 0 0 0 0
Debt Issuance -2,589 984 291 839 -762 1,582 -449 -563
Others inc. Interest paid 721 -858 -1,025 -1,304 -1,194 -1,232 -1,381 -1,529
Dividend + Misc -40 -72 -121 -296 -118 -118 -118 -118
FINANCING CASH FLOW ( c ) -1,909 54 -855 -761 -2,074 232 -1,948 -2,210
NET CASH FLOW (a+b+c) -85 1,199 -690 482 1,236 -474 -871 732
Closing Cash & Equivalents 260 1,460 771 538 2,142 2,416 1,544 2,277
Key Ratios
PROFITABILITY (%)
GPM 25.4 25.5 23.0 24.2 22.2 19.7 22.3 22.9
EBITDA Margin 9.1 10.3 10.4 11.1 9.0 7.9 8.8 9.2
EBIT Margin 6.6 7.7 8.0 7.9 5.1 4.7 6.2 6.4
APAT Margin 2.6 3.9 4.4 6.4 1.9 2.0 3.1 3.3
RoE 9.0 14.4 16.6 25.1 7.2 11.5 18.7 18.8
Core RoCE 9.5 12.7 13.9 16.9 9.6 11.5 15.0 16.2
RoCE 9.2 11.3 13.0 19.2 8.6 11.6 15.5 16.7
EFFICIENCY
Tax Rate (%) 29.0 26.8 24.6 19.3 30.4 26.8 25.2 25.2
Asset Turnover (x) 5.2 5.1 4.7 4.4 4.0 5.1 4.7 4.9
Inventory (days) 28 25 28 24 23 21 25 25
Debtors (days) 103 97 104 89 93 69 90 90
Payables (days) 117 110 132 114 130 103 100 100
Cash Conversion Cycle (days) 15 13 -0 -1 -14 -13 15 15
Debt/EBITDA (x) 3.0 2.6 2.2 2.0 2.4 2.3 1.8 1.5
Net D/E 0.9 0.7 0.7 0.8 0.6 0.8 0.7 0.5
PER SHARE DATA
EPS (INR/sh) 3.6 6.3 8.5 14.2 4.2 6.5 10.8 12.9
CEPS (INR/sh) 7.0 10.6 13.1 21.2 12.7 16.5 19.9 23.7
DPS (INR/sh) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
BV (INR/sh) 41 47 55 58 61 52 63 75
VALUATION
P/E 23.8 13.4 10.0 6.0 20.1 13.0 7.9 6.6
P/BV 2.1 1.8 1.5 1.5 1.4 1.6 1.4 1.1
EV/EBITDA 9.7 7.1 6.3 5.4 6.0 5.1 4.3 3.5
OCF/EV (%) 0.1 0.1 0.1 0.2 0.3 0.2 0.1 0.2
FCF/EV (%) 8.5 8.2 1.7 11.4 20.5 7.2 8.8 15.0
FCFE/Market Cap (%) (1.0) 12.5 (2.7) 14.4 15.0 13.4 0.8 7.1
Dividend Yield (%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Page | 64
KNR Constructions (INR mn)

Net Revenues 15,411 19,317 21,373 22,442 27,026 32,726 35,699 41,780
Growth (%) 70.7 25.3 10.6 5.0 20.4 21.1 9.1 17.0
Employee Expenses 552 721 929 1,252 1,321 1,448 1,568 1,838
Other Operating Expenses 281 381 2,293 2,770 2,983 2,529 3,706 4,262
Operating Profits 2,296 3,862 4,270 4,871 5,358 6,777 6,892 8,043
Operating Profit Margin (%) 14.9 20.0 20.0 21.7 19.8 20.7 19.3 19.3
EBITDA 2,296 3,862 4,270 4,871 5,358 6,777 6,892 8,043
EBITDA (%) 14.9 20.0 20.0 21.7 19.8 20.7 19.3 19.3
EBITDA Growth (%) 50.1 68.2 10.6 14.1 10.0 26.5 1.7 16.7
Depreciation 639 1,341 1,681 1,918 1,444 1,346 1,409 1,553
EBIT 1,657 2,521 2,589 2,952 3,915 5,431 5,483 6,489
Interest 219 231 291 474 487 274 301 352
PBT 1,632 2,683 2,906 2,937 3,811 5,574 5,532 6,504
Tax 60 (38) 273 685 1,370 1,970 1,392 1,655
RPAT 1,573 2,721 2,633 2,252 2,442 3,818 4,139 4,849
EO items (net of tax) (194) (1,099) (343) 107 112 (322) - -
APAT 1,378 1,622 2,290 2,359 2,520 3,592 4,139 4,849
APAT Growth (%) (4.6) 17.7 41.2 3.0 6.8 42.5 15.2 17.1
EPS 4.9 5.8 8.1 8.4 9.0 12.8 14.7 17.2
EPS Growth (%) (4.6) 17.7 41.2 3.0 6.8 42.5 15.2 17.1

SOURCES OF FUNDS
Share Capital 281 281 281 281 562 562 562 562
Reserves 8,674 11,298 13,862 15,958 18,116 21,857 26,907 31,659
Long Term Debt 1,441 2,203 2,472 1,961 - - 1,020 1,030
Short Term Debt - - 169 336 7 - 507 757
Total Debt 1,441 2,203 2,641 2,297 7 - 1,527 1,787
Deferred Taxes (815) (1,408) (1,739) (1,610) (1,486) (1,183) (1,486) (1,486)
Net Block 2,576 3,315 3,710 3,805 3,392 4,237 5,247 4,893
CWIP 15 - - 102 24 206 24 24
Investments, LT Loans & Advances 5,297 5,619 6,201 7,149 4,898 4,072 11,198 13,698
Other Non-Current Assets 1,466 1,563 2,003 1,809 1,714 2,053 991 1,008
Inventories 574 712 951 1,232 1,480 2,270 1,563 1,771
Debtors 1,640 2,320 2,344 4,761 8,632 8,494 6,846 8,027
Cash & Equivalents 649 438 130 330 1,173 1,733 2,410 2,303
Creditors 1,344 2,102 2,236 2,511 2,397 2,945 2,928 3,434
Net Current Assets 540 2,162 3,312 4,238 7,368 10,937 7,676 10,015
Page | 65

PBT 1,632 2,682 2,906 2,937 3,811 5,788 5,532 6,577
Non-operating & EO items 20 -119 -347 -239 89 -490 -312 -312
Depreciation 639 1,341 1,681 1,923 1,444 1,346 1,409 1,553
Working Capital Change 730 -2,330 -1,506 -309 -2,004 -1,660 -415 -2,660
Tax paid -75 -237 -550 -844 -787 -1,826 -1,392 -1,655
Capex -1,383 -2,009 -2,034 -2,078 -939 -2,939 -2,000 -1,200
Free cash flow (FCF) 1,782 -442 441 1,863 2,041 493 3,123 2,654
Investments -1,836 -259 -826 -1,087 1,388 17 -2,150 -2,500
Other non-operating income - - - 266 200 165
INVESTING CASH FLOW ( b ) -3,219 -2,268 -2,860 -2,900 649 -2,757 -4,150 -3,700
Share capital Issuance - - 169 - - - - -
Debt Issuance 273 763 268 (344) (2,290) (7) 260 260
Dividend - (85) (68) (153) - (70) (169) (169)
Others - - - - -
FINANCING CASH FLOW ( c ) 53 489 72 -898 -2,749 -390 -209 -261
NET CASH FLOW (a+b+c) -1 -212 -313 144 880 285 763 -107
Opening cash balance 650 649 438 130 202 1,173 1,733 2,410
Cash not included in Cash and Cash Equivalents 5 57 91 275 -86
Closing Cash & Equivalents 649 438 130 330 1,173 1,733 2,410 2,303
Key Ratios
PROFITABILITY (%)
GPM 20.3 25.7 35.1 39.6 35.8 32.9 34.1 33.9
EBITDA Margin 14.9 20.0 20.0 21.7 19.8 20.7 19.3 19.3
EBIT Margin 10.8 13.0 12.1 13.2 14.5 16.6 15.4 15.5
APAT Margin 8.9 8.4 10.7 10.5 9.3 11.0 11.6 11.6
RoE 16.9 15.8 17.8 15.5 14.4 17.5 17.5 17.9
Core RoCE 40.4 38.7 26.4 23.5 22.1 22.4 29.1 28.9
RoCE 16.1 14.7 16.8 15.9 16.3 17.5 15.8 15.6
EFFICIENCY
Tax Rate (%) 3.7 (1.4) 9.4 23.3 35.9 35.3 25.2 25.4
Asset Turnover (x) 2.4 2.4 2.1 1.9 2.1 2.2 2.1 2.3
Inventory (days) 14 13 16 20 20 25 16 15
Debtors (days) 39 44 40 77 117 95 70 70
Payables (days) 32 40 38 41 32 33 30 30
Net Working Capital Cycle (Days) (3) 33 54 64 84 103 54 67
Debt/EBITDA (x) 0.6 0.6 0.6 0.5 0.0 0.0 0.2 0.2
Net D/E 0.09 0.2 0.2 0.1 (0.1) (0.1) (0.0) (0.0)
PER SHARE DATA
EPS (INR/sh) 4.9 5.8 8.1 8.4 9.0 12.8 14.7 17.2
CEPS (INR/sh) 7.2 10.5 14.1 15.2 14.1 17.6 19.7 22.8
DPS (INR/sh) 0.0 0.3 0.2 0.5 0.0 0.2 0.5 0.5
BV (INR/sh) 32 41 50 58 66 80 98 115
VALUATION
P/E 53.0 45.1 31.9 31.0 29.0 20.4 17.7 15.1
P/BV 8.2 6.3 5.2 4.5 3.9 3.3 2.7 2.3
EV/EBITDA 32.2 19.4 17.7 15.4 13.4 10.5 10.5 9.0
OCF/EV (%) 0.0 0.0 0.0 0.1 0.0 0.0 0.1 0.1
FCF/EV (%) 2.4 (0.6) 0.6 2.5 2.8 0.7 4.3 3.7
FCFE/Market Cap (%) 2.5 0.2 0.6 1.5 (1.0) 0.2 4.2 3.5
Dividend Yield (%) 0.0 0.1 0.1 0.2 0.0 0.1 0.2 0.2
Page | 66
NCC (INR mn)

Net Revenues 78,921 74,363 1,20,798 82,188 72,557 99,300 1,23,940 1,38,592
Growth (%) (5.2) (5.8) 62.4 (32.0) (11.7) 38.8 23.1 11.8
Material Expenses 66,871 60,890 99,305 64,949 58,725 82,722 1,02,251 1,13,369
EBITDA 6,852 7,739 14,230 10,302 8,545 9,961 12,890 15,384
EBITDA (%) 8.7 10.4 11.8 12.5 11.8 10.0 10.4 11.1
EBITDA Growth (%) (7.1) 12.9 83.9 (27.6) (17.1) 16.6 29.4 19.3
Depreciation 1,121 1,175 1,494 1,775 1,741 1,823 1,844 1,874
EBIT 5,731 6,564 12,736 8,526 6,804 8,138 11,046 13,509
Other income (including EO) 897 903 593 1,186 1,156 1,082 891 935
Interest 3,957 3,789 4,512 5,179 4,578 4,596 4,748 4,703
PBT 2,672 3,677 8,817 4,534 3,382 4,624 7,189 9,741
Tax 417 809 3,177 713 771 1,179 1,810 2,452
RPAT 2,255 2,868 5,640 3,820 2,611 4,901 5,380 7,289
EO Items 503 256 589 327 - 1,456 - -
APAT 2,758 3,123 6,229 4,147 2,611 3,460 5,380 7,289
APAT Growth (%) 14.9 13.2 99.4 (33.4) (37.0) 32.5 55.5 35.5
EPS 5.0 5.1 10.2 6.8 4.3 5.7 8.8 12.0
EPS Growth (%) 14.9 3.2 99.4 (33.4) (37.0) 32.5 55.5 35.5

SOURCES OF FUNDS
Share Capital 1,112 1,201 1,201 1,220 1,220 1,220 1,220 1,220
Reserves 33,311 41,215 46,367 49,837 52,475 56,812 61,331 68,337
Long Term Debt 91 1,185 3,200 1,737 986 820 820 820
Short Term Debt 15,676 11,815 16,733 17,364 16,903 11,900 17,103 16,803
Total Debt 15,767 13,001 19,933 19,101 17,889 12,720 17,924 17,624
Deferred Taxes (1,354) (1,793) (1,726) (2,055) (411) (541) (411) (411)
Other Non-Current Liabilities 842 1,394 1,297 840 679 724 679 679
Net Block 6,403 8,081 12,417 11,915 12,177 12,236 13,236 14,236
CWIP 13 229 813 829 896 1,105 896 896
Investments, LT Loans & Advances 10,287 15,110 12,403 12,532 11,368 8,945 10,523 10,583
Inventories 15,258 16,956 5,129 5,148 5,268 7,878 7,564 8,697
Debtors 23,501 34,620 30,496 24,083 25,206 24,922 33,956 37,971
Cash & Equivalents 1,095 659 2,990 3,169 4,385 5,585 3,979 2,002
Total Current Assets 68,848 79,237 98,990 94,379 96,102 1,08,228 1,16,468 1,23,851
Creditors 28,688 33,882 43,844 39,364 36,904 42,607 45,841 47,463
Page | 67

Reported PBT 2,672 3,677 8,817 4,534 3,382 4,624 7,189 9,741
Non-operating & EO items (599) 401 347 (286) (686) (1,082) (891) (935)
Depreciation 1,121 1,175 1,494 1,775 1,741 1,823 1,844 1,874
Working Capital Change (4,746) (3,310) (9,366) (3,471) (1,934) (123) (8,214) (7,624)
Taxes Paid (436) (1,263) (2,351) (1,366) (188) (1,179) (1,810) (2,452)
Capex (1,286) (3,076) (4,907) (879) (1,516) (2,091) (2,635) (2,874)
Free cash flow (FCF) 682 1,393 (1,453) 5,486 5,377 6,568 231 2,434
Investments and Income on investments and deposits 5,838 (456) 655 (763) 2,358 3,505 (687) 875
INVESTING CASH FLOW ( b ) 4,552 (3,532) (4,252) (1,642) 842 1,414 (3,322) (1,999)
Debt Issuance (Net of repayments) (3,068) (2,766) 6,931 (839) (2,417) 500 (300) (300)
FCFE (6,469) (5,124) 1,163 (81) (1,659) 2,534 (4,817) (2,570)
Share capital Issuance - 5,413 275 824 266 - - -
Dividend (402) (268) (724) (1,086) (122) (283) (283) (283)
FINANCING CASH FLOW ( c ) (7,552) (1,372) 2,167 (5,830) (6,893) (4,318) (5,331) (5,287)
NET CASH FLOW (a+b+c) (1,032) (435) 1,369 (1,107) 842 5,755 (5,787) (1,978)
Closing Cash & Equivalents 1,095 659 2,990 3,169 4,385 5,585 3,979 2,002
Key Ratios
PROFITABILITY (%)
GPM 15.3 18.1 17.8 21.0 19.1 16.7 17.5 18.2
EBITDA Margin 8.7 10.4 11.8 12.5 11.8 10.0 10.4 11.1
EBIT Margin 7.3 8.8 10.5 10.4 9.4 8.2 8.9 9.7
APAT Margin 3.5 4.2 5.2 5.0 3.6 3.5 4.3 5.3
RoE 8.2 8.1 13.8 8.4 5.0 6.2 8.9 11.0
Core RoCE 12.6 13.0 15.8 13.5 8.6 10.4 11.4 12.5
RoCE 11.3 10.6 12.7 11.9 8.6 11.7 11.1 12.4
EFFICIENCY
Tax Rate (%) 15.6 22.0 36.0 15.7 22.8 25.5 25.2 25.2
Asset Turnover (x) 5.8 4.6 5.7 3.8 3.1 3.7 4.3 4.6
Inventory (days) 71 83 15 23 27 29 22 23
Debtors (days) 109 170 92 107 127 92 100 100
Other Current assets (days) 134 133 182 275 308 257 209 198
Payables (days) 133 166 132 175 186 157 135 125
Other Current liab & provns (days) 45 85 57 77 90 89 57 53
Debt/EBITDA (x) 2.3 1.7 1.4 1.9 2.1 1.3 1.4 1.1
Net D/E 0.4 0.3 0.4 0.3 0.3 0.1 0.2 0.2
PER SHARE DATA
EPS (INR/sh) 5.0 5.1 10.2 6.8 4.3 5.7 8.8 12.0
CEPS (INR/sh) 6.1 6.6 11.7 9.2 7.1 11.0 11.8 15.0
DPS (INR/sh) 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6
BV (INR/sh) 61.9 69.6 78.0 83.7 88.0 95.2 102.6 114.1
VALUATION
P/E 13.4 12.9 6.5 9.7 15.5 11.7 7.5 5.5
P/BV 1.1 1.0 0.9 0.8 0.8 0.7 0.6 0.6
EV/EBITDA 7.5 6.8 4.0 5.5 6.3 4.8 4.2 3.6
EV/Revenues 0.7 0.7 0.5 0.7 0.7 0.5 0.4 0.4
OCF/EV (%) 3.8 8.5 6.0 11.3 12.8 18.2 5.3 9.5
FCF/EV (%) 1.3 2.6 (2.5) 9.7 10.0 13.8 0.4 4.3
FCFE/Market Cap (%) 1.9 3.4 (3.6) 13.6 13.3 16.2 0.6 6.0
Dividend Yield (%) 0.9 0.9 0.9 0.9 0.9 0.9 0.9 0.9
Page | 68
PNC Infratech (INR mn)

Net Revenues 16,891 17,966 30,716 48,779 49,254 63,055 68,166 78,186
Growth (%) (16.1) 6.4 71.0 58.8 1.0 28.0 8.1 14.7
EBITDA 2,210 2,588 4,320 7,643 6,728 7,872 8,821 10,162
EBITDA Margin (%) 13.1 14.4 14.1 15.7 13.7 12.5 12.9 13.0
EBITDA Growth (%) (16.9) 17.1 66.9 76.9 (12.0) 17.0 12.1 15.2
Depreciation 533 772 922 1,264 1,124 1,299 1,410 1,566
EBIT 1,677 1,816 3,397 6,379 5,604 6,573 7,412 8,596
Other Income (Including EO Items) 466 830 683 885 752 542 533 587
Interest 203 307 641 1,144 771 801 788 909
PBT 1,939 2,339 3,440 6,120 5,585 6,314 7,157 8,274
Tax (including Deferred Tax) (158) (171) 191 1,517 1,966 1,836 1,801 2,083
RPAT 2,097 2,510 3,248 4,603 3,619 4,478 5,356 6,191
EO Items (including MAT savings) (927) (1,321) (911) (1,360) - 390 - -
APAT 1,169 1,190 2,338 3,243 3,619 4,868 5,356 6,191
APAT Growth (%) (23.9) 1.8 96.5 38.7 11.6 34.5 10.0 15.6
Adjusted EPS (INR) 4.6 4.6 9.1 12.6 14.1 19.0 20.9 24.1
EPS Growth (%) (23.9) 1.8 96.5 38.7 11.6 34.5 10.0 15.6

SOURCES OF FUNDS
Share Capital - Equity 513 513 513 513 513 513 513 513
Reserves 15,209 17,554 20,639 24,953 28,572 32,889 37,781 43,489
Long Term Debt 576 1,286 3,747 3,266 3,992 1,292 3,250 3,250
Short Term Debt 1,115 412 - - - 865 250 1,150
Total Debt 1,691 1,697 3,747 3,266 3,992 2,158 3,500 4,400
Net Deferred Taxes (23) (20) (1,673) (1,215) (225) (152) (225) (225)
Long Term Provisions & Others 1,675 1,698 3,791 6,532 4,314 7,516 4,505 4,284
Net Block 3,479 4,064 6,155 5,880 6,557 5,894 6,130 5,913
CWIP 78 111 62 - 34 - 34 34
Investments 4,676 4,948 5,730 7,355 8,470 8,712 15,970 17,620
Other Non-current Assets 4,297 4,668 3,774 2,990 3,885 8,894 3,030 3,030
Inventories 1,535 1,757 4,035 2,673 3,536 4,808 5,603 6,426
Debtors 6,309 6,900 6,154 8,035 8,374 12,728 12,326 14,138
Cash & Equivalents 355 1,473 3,094 7,401 7,683 5,285 3,241 5,597
Creditors 2,369 4,628 4,737 4,675 7,194 5,076 5,603 6,426
Miscellaneous
Page | 69

Reported PBT 1,939 2,339 3,440 6,120 5,585 6,314 7,157 8,274
Non-operating & EO items 26 16 (43) 87 (51) 790 (533) (587)
Interest expenses (150) 158 391 444 333 801 254 322
Depreciation 533 772 922 1,264 1,124 1,299 1,410 1,566
Working Capital Change (2,599) (245) (841) 1,823 (2,261) (6,575) (749) (2,818)
Tax Paid 164 175 (171) (1,612) (1,998) (1,751) (1,801) (2,083)
OPERATING CASH FLOW ( a ) (86) 3,215 3,699 8,126 2,732 878 5,737 4,675
Capex (1,895) (1,318) (2,796) (909) (1,820) (546) (1,500) (1,350)
Free cash flow (FCF) (1,981) 1,897 902 7,217 912 332 4,237 3,325
Investments (32) (373) (946) (1,607) (1,193) (841) (7,258) (1,650)
Other income and Other bank deposits 311 245 398 211 488 128 533 587
Debt Issuance/(Repaid)/ 1,400 (189) 2,050 (482) 727 (1,874) 150 900
Interest Expenses (153) (301) (626) (725) (653) (425) (254) (322)
FCFE (733) 1,407 2,326 6,011 986 (1,967) 4,133 3,903
Share Capital Issuance - - (3) - - 0 0 0
Dividend (161) (161) (155) (309) - (128) (483) (483)
FINANCING CASH FLOW ( c ) 1,086 (651) 1,267 (1,516) 74 (2,427) (587) 95
NET CASH FLOW (a+b+c) (616) 1,117 1,621 4,306 282 (2,809) (3,075) 2,357
Miscellaneous 805 411
Closing Cash & Equivalents 355 1,473 3,094 7,401 7,683 5,285 3,241 5,597
Key Ratios
PROFITABILITY (%)
GPM 26.5 31.9 31.2 30.9 29.0 29.4 29.5 29.5
EBITDA Margin 13.1 14.4 14.1 15.7 13.7 12.5 12.9 13.0
APAT Margin 6.9 6.6 7.6 9.4 7.3 7.1 7.9 7.9
RoE 7.9 7.0 11.9 13.9 13.3 15.6 14.9 15.0
RoIC (or Core RoCE) 12.9 13.0 17.6 24.9 17.3 16.1 20.6 22.0
RoCE 13.4 14.0 15.9 17.9 11.6 12.6 13.4 13.9
EFFICIENCY
Tax Rate (%) (8.1) (7.3) 5.6 24.8 35.2 29.1 25.2 25.2
Inventory (days) 33 36 48 20 26 28 30.0 30.0
Debtors (days) 136 140 73 60 62 74 66.0 66.0
Other Current Assets (days) 69 80 77 64 73 38 65.0 65.0
Payables (days) 51 94 56 35 53 29 30.0 30.0
Other Current Liab & Provns (days) 54 36 44 31 29 28 36.4 36.4
Debt/EBITDA (x) 0.8 0.7 0.9 0.4 0.6 0.3 0.4 0.4
Net D/E (x) 0.1 0.01 0.03 (0.16) (0.13) (0.1) 0.0 (0.0)
Interest Coverage (x) 8.3 5.9 5.3 5.6 7.3 8.2 9.4 9.5
PER SHARE DATA (INR)
EPS 4.6 4.6 9.1 12.6 14.1 19.0 20.9 24.1
CEPS 10.3 12.8 16.3 22.9 18.5 22.5 26.4 30.2
Dividend 0.5 1.5 0.5 0.7 0.7 1.5 1.5 1.5
Book Value 61.3 70.4 82.5 99.3 113.4 130.2 149.3 171.5
VALUATION
P/E (x) 56.8 55.8 28.4 20.5 18.4 13.6 12.4 10.7
P/BV (x) 4.2 3.7 3.1 2.6 2.3 2.0 1.7 1.5
EV/EBITDA (x) 30.7 25.8 15.5 8.2 9.3 8.0 7.6 6.4
EV/Revenues (x) 4.0 3.7 2.2 1.3 1.3 1.0 1.0 0.8
OCF/EV (%) (0.1) 4.8 5.5 13.0 4.4 1.4 8.6 7.2
FCF/EV (%) (2.9) 2.8 1.3 11.6 1.5 0.5 6.4 5.1
FCFE/Mkt Cap (%) (1.1) 2.1 3.5 9.0 1.5 (3.0) 6.2 5.9
Dividend Yield (%) 0.2 0.6 0.2 0.3 0.3 0.6 0.6 0.6
Page | 70
PSP Projects (INR mn)

Net Revenues 4,008 7,283 10,440 14,993 12,409 17,488 20,429 24,670
Growth (%) -12.5 81.7 43.3 43.6 -17.2 40.9 16.8 20.8
Employee Expenses 208 286 432 594 509 723 715 1,110
EBITDA 658 999 1,489 1,910 1,348 2,565 2,548 3,214
EBITDA (%) 16.4 13.7 14.3 12.7 10.9 14.7 12.5 13.0
EBITDA Growth (%) 67.3 52.0 49.1 28.2 (29.4) 90.3 (0.7) 26.1
Depreciation 76 112 242 267 256 321 395 463
EBIT 582 888 1,247 1,643 1,092 2,245 2,153 2,751
Interest 75 87 92 146 147 264 289 386
PBT 640 984 1,385 1,744 1,087 2,193 2,108 2,608
Tax 226 355 483 452 279 569 530 656
RPAT 414 629 902 1,293 808 1,624 1,577 1,952
EO items (net of tax) 2 6 - - 27 - - -
APAT 416 635 902 1,293 835 1,624 1,577 1,952
APAT Growth (%) 64.9 52.4 42.2 43.2 (35.4) 94.4 (2.9) 23.7
EPS 14.5 17.6 25.1 35.9 23.2 45.1 43.8 54.2
EPS Growth (%) (81.7) 22.0 42.2 43.2 (35.4) 94.4 (2.9) 23.7

SOURCES OF FUNDS
Share Capital 288 360 360 360 360 360 360 360
Reserves 783 2,667 3,354 4,211 5,020 6,487 7,502 9,103
Long Term Debt 34 17 4 40 28 172 28 28
Short Term Debt 644 199 436 886 858 825 1,658 1,658
Total Debt 677 216 440 926 886 997 1,686 1,686
Deferred Taxes (15) (18) (49) (58) (92) (94) (92) (92)
Net Block 508 770 1,032 1,079 1,162 2,074 1,454 1,492
CWIP - 18 - - 416 - 416 416
Investments, LT Loans & Advances 606 644 605 930 875 2,290 1,677 2,025
Inventories 30 335 750 968 892 806 1,455 1,757
Unbilled Revenue - - 230 1,250 891 891 891
Retention 192 394 475 670 670 930 1,122
Debtors 533 1,162 1,426 2,240 2,220 3,118 3,358 4,055
Cash & Equivalents 479 766 352 468 638 1,952 1,267 1,550
Cash Margin/FDR 680 1,618 1,867 1,499 1,649 1,849 1,949
Other Current Assets 104 129 521 430 397 2,318 759 852
Creditors 693 1,213 1,585 2,163 2,599 2,576 3,750 4,393
Less: Acceptances - - - 178 - 178 - 178 - 178 - 178
Advances from customers 460 1,187 1,401 1,791 899 699 499
Other Current Liabilities & Provisions 245 211 344 319 317 2,231 330 339
Net Current Assets 619 1,792 2,469 3,431 3,721 3,387 5,909 7,124
Page | 71

PBT 639 984 1,385 1,744 1,087 1,938 2,108 2,608
Non-operating & EO items -69 -178 -198 -217 -113 -193 -243 -242
Depreciation 76 112 242 267 256 312 395 463
Working Capital Change -497 145 -720 -1,116 -362 -597 -647 -716
Tax paid -145 -409 -477 -556 -243 -488 -530 -656
OPERATING CASH FLOW ( a ) 11 716 277 190 708 1,242 1,370 1,841
Capex -71 -475 -394 -331 -792 -500 -500 -500
Free cash flow (FCF) -60 241 -117 -140 -83 742 870 1,341
Investments + Investment Income -9 178 55 218 846 -349 -131 -222
INVESTING CASH FLOW ( b ) -80 -296 -339 -112 54 -849 -631 -722
Share capital Issuance - 1,421 - - - - - -
Debt Issuance 215 (461) 46 486 61 - 800 -
Dividend + Other Misc - (108) (217) (434) - (261) (284) (351)
FINANCING CASH FLOW ( c ) 160 805 -215 -16 -21 -530 227 -737
NET CASH FLOW (a+b+c) 90 1,225 -277 62 741 -137 966 382
Key Ratios
PROFITABILITY (%)
GPM 24.0 18.8 19.4 17.6 16.2 20.4 17.0 18.5
EBITDA Margin 16.4 13.7 14.3 12.7 10.9 14.7 12.5 13.0
EBIT Margin 14.5 12.2 11.9 11.0 8.8 12.8 10.5 11.2
APAT Margin 10.4 8.7 8.6 8.6 6.7 9.3 7.7 7.9
RoE 48.2 31.0 26.8 31.2 16.8 26.6 21.4 22.5
Core RoCE 58.0 30.6 25.8 30.1 17.4 47.4 24.7 27.5
RoCE 26.8 21.4 23.4 25.8 15.3 23.5 19.0 20.3
EFFICIENCY
Tax Rate (%) 35.3 36.1 34.9 25.9 25.7 25.9 25.2 25.2
Asset Turnover (x) 4.9 6.1 6.2 7.5 5.3 6.2 6.1 6.4
Inventory (days) 3 17 26 24 26 17 26 26
Unbilled Revenue (days) - - 8 30 26 - 16 13
Retention (days) 17 20 17 16 20 - 17 17
Debtors (days) 49 58 50 55 65 65 60 60
Payables (days) 63 61 49 48 71 54 64 62
Cash Conversion Cycle (days) -12 14 27 30 20 28 22 24
Cash Margin/FDR 62 81 65 37 49 0 33 29
Advances from customers 42 60 50 44 27 0 13 7
Debt/EBITDA (x) 1.0 0.2 0.3 0.5 0.7 0.4 0.7 0.5
Net D/E 0.2 (0.2) 0.0 0.1 0.0 (0.1) 0.1 0.0
PER SHARE DATA
EPS (INR/sh) 14.5 17.6 25.1 35.9 23.2 45.1 43.8 54.2
CEPS (INR/sh) 17.1 20.7 31.8 43.3 30.3 54.0 54.8 67.1
DPS (INR/sh) 0.0 3.0 6.0 12.1 0.0 7.3 7.9 9.8
BV (INR/sh) 37 84 103 127 149 190 218 263
VALUATION
P/E 41.4 33.9 23.9 16.7 25.8 13.3 13.6 11.0
P/BV 16.1 7.1 5.8 4.7 4.0 3.1 2.7 2.3
EV/EBITDA 26.5 21.0 14.5 11.5 16.1 8.0 8.6 6.7
OCF/EV (%) 0.0 0.0 0.0 0.0 0.0 0.1 0.1 0.1
FCF/EV (%) (0.3) 1.1 (0.5) (0.6) (0.4) 3.6 4.0 6.2
FCFE/Market Cap (%) 0.6 (1.2) (0.5) 1.3 (0.5) 2.2 6.4 4.4
Dividend Yield (%) 0.0 0.5 1.0 2.0 0.0 1.2 1.3 1.6
Page | 72
Financials – Capital Goods

ABB India (INR mn)
Year ending December CY17 CY18 CY19 CY20 CY20 CY22E CY23E CY24E
Net Revenues 60,937 66,901 73,151 58,210 69,340 85,698 99,988 1,21,779
Growth (%) (29.5) 9.8 9.3 (20.4) 19.1 23.6 16.7 21.8
EBITDA 4,146 4,578 5,312 2,759 5,567 8,824 11,203 13,604
EBITDA (%) 6.8 6.8 7.3 4.7 8.0 10.3 11.2 11.2
EBITDA Growth (%) (40.3) 10.4 16.0 (48.0) 101.8 58.5 27.0 21.4
Depreciation 1,012 928 904 1,204 1,027 1,068 1,071 1,155
EBIT 3,133 3,650 4,408 1,556 4,540 7,756 10,132 12,449
Other Income 777 840 943 1,069 1,596 1,311 1,878 1,515
Interest 572 539 214 169 107 130 130 180
EO items - - 697 588 1,213 - - -
PBT 3,338 3,951 4,440 1,868 7,243 8,937 11,880 13,784
Tax 1,084 1,410 1,418 739 1,918 2,324 3,089 3,584
RPAT 2,255 2,542 3,022 1,129 5,325 6,613 8,791 10,200
EO items (net of tax) - - 697 588 1,213 - - -
APAT 2,255 2,542 3,719 1,717 6,538 6,613 8,791 10,200
APAT Growth (%) (39.8) 12.7 46.3 (53.8) 280.9 1.1 32.9 16.0
EPS 10.6 12.0 17.6 8.1 30.9 31.2 41.5 48.1
EPS Growth (%) (39.8) 12.7 46.3 (53.8) 280.9 1.1 32.9 16.0
Profit from discontinued operations 1,945 2,567 2,054 -112 -116 -124 -134 -144
Profit for the year 4,200 5,109 5,773 1,604 6,423 6,489 8,658 10,057
Growth (%) 12.1 21.7 13.0 (72.2) 300.3 1.0 33.4 16.2
Source: Company, HSIE Research; YE: December

As at December CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E
SOURCES OF FUNDS
Share Capital 424 424 424 424 424 424 424 424
Reserves 35,645 39,649 34,777 35,640 39,665 44,848 52,066 60,536
Total Debt 6,042 21 71 0 0 0 0 0
Deferred Taxes (1,173) (1,150) (1,103) (1,172) (1,172) (1,172) (1,172) (1,172)
Net Block 12,187 8,931 7,417 7,827 8,602 9,049 9,494 9,854
CWIP 1,165 831 595 749 849 949 1,049 1,149
Investments 2 2 - - - - - -
Other Non-Current Assets
Inventories 11,536 9,279 8,617 8,408 9,506 11,640 13,515 17,812
Debtors 27,878 16,869 19,475 16,950 18,617 23,009 27,016 31,382
Cash & bank balances 17,621 14,752 15,977 22,066 18,603 21,713 26,691 33,538
Creditors 43,160 26,757 36,120 36,439 26,871 32,901 38,201 47,201
Net assets pertaining to discontinued
- 6,795 1,509 - - - - -
operations/Assets held for sale
Page | 73

Year ending December CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E
PBT 6,218 7,942 4,440 3,044 7,243 8,937 11,880 13,784
Non-operating & EO items (258) (24) (211) (72) (1,596) (1,311) (1,878) (1,515)
Depreciation 1,580 1,458 1,040 1,204 1,027 1,068 1,071 1,155
Working Capital Change 2,403 (1,641) 2,846 (130) (6,612) (1,527) (1,695) (1,163)
Tax paid (2,799) (2,248) (1,738) (1,033) (1,918) (2,324) (3,089) (3,584)
OPERATING CASH FLOW ( a ) 7,917 6,255 6,669 3,182 -1,750 4,974 6,419 8,857
Capex (1,847) (2,360) (1,215) (1,137) (1,902) (1,615) (1,615) (1,615)
Free cash flow (FCF) 6,070 3,894 5,454 2,045 (3,652) 3,359 4,804 7,242
Investments (2,462) 2,827 1 - - - - -
Non-operating income 1,103 971 (2,693) 5,561 1,596 1,311 1,878 1,515
INVESTING CASH FLOW ( b ) -3,205 1,437 -3,907 4,424 -306 -304 263 -100
Dividend payment (1,020) (1,138) (1,176) (1,354) (1,300) (1,430) (1,573) (1,731)
Debt Issuance 83 (6,000) - - - - - -
FINANCING CASH FLOW ( c ) -1,710 -7,937 -1,467 -1,523 -1,407 -1,560 -1,703 -1,911
NET CASH FLOW (a+b+c) 3,001 -245 1,295 6,084 -3,463 3,109 4,978 6,847
Opening Cash & Equivalents 11,892 17,621 14,752 15,977 22,066 18,603 21,713 26,691
Key Ratios
Particulars CY17 CY18 CY19 CY20 CY21 CY22E CY23E CY24E
PROFITABILITY (%)
GPM 32.7 32.5 33.5 33.5 33.3 33.9 34.2 33.3
EBITDA Margin 6.8 6.8 7.3 4.7 8.0 10.3 11.2 11.2
EBIT Margin 5.1 5.5 6.0 2.7 6.5 9.1 10.1 10.2
APAT Margin 3.7 3.8 5.1 2.9 9.4 7.7 8.8 8.4
RoE 6.5 6.7 9.9 4.8 17.2 15.5 18.0 18.0
Core RoCE 8.7 9.9 14.2 6.1 20.1 26.9 31.9 36.2
RoCE 6.5 7.0 10.3 5.1 17.4 15.7 18.2 18.2
EFFICIENCY
Tax Rate (%) 32.5 35.7 31.9 39.6 26.5 26.0 26.0 26.0
Asset Turnover (x) 4.3 6.0 7.4 5.3 5.5 6.1 6.4 7.1
Inventory (days) 69 51 43 53 50 50 49 53
Debtors (days) 167 92 97 106 98 98 99 94
Payables (days) 259 146 180 228 141 140 139 141
Cash Conversion (days) -22 -3 -40 -69 7 7 9 6
Debt/EBITDA (x) 1.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net D/E (0.3) (0.4) (0.5) (0.6) (0.5) (0.5) (0.5) (0.6)
Interest Coverage 5.5 6.8 20.6 - - - - -
PER SHARE DATA
EPS (INR/sh) 10.6 12.0 17.6 8.1 30.9 31.2 41.5 48.1
CEPS (INR/sh) 15.4 16.4 21.8 13.8 35.7 36.2 46.5 53.6
DPS (INR/sh) 4.8 5.4 5.5 6.4 6.1 6.7 7.4 8.2
BV (INR/sh) 170 189 166 170 189 214 248 288
VALUATION
P/E 262.9 233.2 159.4 345.4 90.7 89.7 67.4 58.1
P/BV 16.4 14.8 16.8 16.4 14.8 13.1 11.3 9.7
EV/EBITDA 140.2 126.3 108.6 206.9 103.2 64.7 50.5 41.1
OCF/EV (%) 1.4 1.1 1.2 0.6 (0.3) 0.9 1.1 1.6
FCF/EV (%) 1.0 0.7 0.9 0.4 (0.6) 0.6 0.8 1.3
FCFE/Market Cap (%) 0.9 (0.5) 0.9 0.3 (0.6) 0.5 0.8 1.2
Dividend Yield (%) 0.2 0.2 0.2 0.2 0.2 0.2 0.3 0.3
Page | 74
Cummins (INR mn)

Net Revenues 50,773 50,825 56,590 51,577 43,292 61,404 70,824 78,775
Growth (%) 7.8 0.1 11.3 (8.9) (16.1) 41.8 15.3 11.2
EBITDA 8,018 7,325 8,641 5,863 6,027 8,802 11,572 14,035
EBITDA (%) 15.8 14.4 15.3 11.4 13.9 14.3 16.3 17.8
EBITDA Growth (%) 3.4 (8.7) 18.0 (32.2) 2.8 46.0 31.5 21.3
Depreciation 848 938 1,103 1,187 1,255 1,340 1,347 1,306
EBIT 7,170 6,387 7,538 4,676 4,772 7,461 10,225 12,729
Other Income (Incl. EO Items) 2,080 2,836 2,928 3,117 3,470 4,248 3,525 3,996
Interest 168 148 162 203 162 115 127 133
PBT 9,082 9,074 10,304 7,591 8,080 11,595 13,623 16,593
Tax 1,736 2,000 3,078 1,297 1,901 2,728 3,239 3,904
RPAT 7,346 7,075 7,226 6,293 6,179 8,867 10,384 12,689
EO items (net of tax) - 551 - (199) 124 1,373 (143) -
APAT 7,346 6,661 7,226 6,442 6,086 7,837 10,527 12,689
APAT Growth (%) (2.6) (9.3) 8.5 (10.8) (5.5) 28.8 34.3 20.5
EPS 26.5 24.0 26.1 23.2 22.0 28.3 38.0 45.8
EPS Growth (%) (2.6) (9.3) 8.5 (10.8) (5.5) 28.8 34.3 20.5

SOURCES OF FUNDS
Share Capital 554 554 554 554 554 554 554 554
Reserves 36,867 39,306 40,750 41,195 43,513 47,972 53,510 61,486
Minority Interest
Long Term Debt - - - - - - - -
Short Term Debt 2,508 2,515 3,092 4,854 156 3,933 3,933 3,933
Total Debt 2,508 2,515 3,092 4,854 156 3,933 3,933 3,933
Other Non-Current Liabilities 887 734 1,015 1,439 1,132 1,229 1,229 1,229
Deferred Taxes 24 299 988 800 823 971 971 971
Net Block 12,240 12,828 12,823 12,258 11,647 11,836 12,017 12,239
CWIP 4,631 380 1,585 800 1,275 608 658 708
Intangible Assets 82 54 25 19 7 418 390 362
Inventories 5,621 5,375 6,254 5,729 5,578 7,288 8,262 9,096
Debtors 9,557 13,263 12,727 11,316 10,745 12,473 14,427 16,046
Current investment (mainly MF's) 7,155 5,060 2,427 7,815 3,267 5,775 5,775 5,775
ST Loans & Advances 1,287 1,287 - - - - - -
Other Assets 5,493 4,621 7,610 6,274 4,174 5,222 5,588 5,979
Creditors 7,470 9,819 9,846 8,652 8,486 10,840 12,289 13,530
Page | 75

PBT 9,082 9,084 10,304 7,591 8,080 11,595 13,623 16,593
Non-operating & EO items (1,147) (1,634) (1,367) (1,837) (745) (2,568) (641) (877)
Depreciation 848 938 1,103 1,187 1,255 1,340 1,347 1,306
Working Capital Change 371 (370) (2,341) 144 1,028 (684) (1,845) (1,604)
Tax paid (1,867) (1,823) (2,361) (1,297) (1,901) (2,728) (3,239) (3,904)
Capex (2,315) (905) (2,734) (2,366) (1,140) 705 (1,550) (1,550)
Free cash flow (FCF) 5,141 5,440 2,766 3,623 6,738 7,776 7,822 10,096
Investments (3,655) (1,518) 670 (1,163) (75) (7,597) - -
Non-operating income 1,110 1,095 2,233 1,395 1,371 1,030 784 877
INVESTING CASH FLOW ( b ) (4,860) (1,327) 169 (2,135) 155 (5,862) (766) (673)
Debt Issuance 2,508 8 576 1,726 (4,697) 3,777 - -
Dividend Payment (4,663) (4,639) (5,641) (5,681) (3,881) (4,435) (4,990) (4,712)
Others - - (40) - (35) (42)
FINANCING CASH FLOW ( c ) (2,245) (4,731) (5,226) (4,109) (8,724) (774) (5,116) (4,845)
NET CASH FLOW (a+b+c) 350 285 443 (254) (691) 434 3,490 6,128
Opening Cash & Equivalents 897 1,291 4,709 7,379 4,538 9,652 14,267 17,757
Key Ratios
PROFITABILITY (%)
GPM 35.5 35.9 36.1 34.7 36.2 33.1 34.3 34.9
EBITDA Margin 15.8 14.4 15.3 11.4 13.9 14.3 16.3 17.8
EBIT Margin 14.1 12.6 13.3 9.1 11.0 12.2 14.4 16.2
APAT Margin 14.5 13.1 12.8 12.5 14.1 12.8 14.9 16.1
RoE 20.3 17.2 17.8 15.5 14.2 16.9 20.5 21.9
Core RoCE 19.3 18.0 19.3 14.2 15.1 24.2 30.6 35.5
RoCE 20.0 16.5 16.9 14.5 13.7 16.4 19.2 20.6
EFFICIENCY
Tax Rate (%) 19.1 22.0 29.9 17.1 23.5 23.5 23.8 23.5
Asset Turnover (x) 2.6 2.6 2.7 2.4 2.1 3.1 3.4 3.5
Inventory (days) 40 39 40 41 47 43 43 42
Debtors (days) 69 95 82 80 91 74 74 74
Payables (days) 54 71 64 61 72 64 63 63
Debt/EBITDA (x) 0.3 0.3 0.4 0.8 0.0 0.4 0.3 0.3
Net D/E (0.16) (0.18) (0.16) (0.18) (0.29) (0.33) (0.36) (0.41)
PER SHARE DATA
EPS (INR/sh) 26.5 24.0 26.1 23.2 22.0 28.3 38.0 45.8
CEPS (INR/sh) 29.6 27.4 30.0 27.5 26.5 33.1 42.8 50.5
DPS (INR/sh) 14.0 15.0 17.0 14.0 14.0 16.0 18.0 17.0
BV (INR/sh) 135.0 143.8 149.0 150.6 159.0 175.1 195.0 223.8
VALUATION
P/E 46.7 51.5 47.5 53.3 56.4 43.8 32.6 27.0
P/BV 9.2 8.6 8.3 8.2 7.8 7.1 6.3 5.5
EV/EBITDA 42.1 45.9 38.9 57.3 54.8 37.2 28.0 22.6
OCF/EV (%) 2.2 1.9 1.6 1.8 2.4 2.2 2.9 3.7
FCF/EV (%) 1.5 1.6 0.8 1.1 2.0 2.4 2.4 3.2
FCFE/Market Cap (%) 2.2 1.6 1.0 1.6 0.6 3.4 2.3 2.9
Dividend Yield (%) 1.1 1.2 1.4 1.1 1.1 1.3 1.5 1.4
Page | 76
Kalpataru Power (INR mn)

Net Revenues 48,941 57,412 71,151 79,040 76,710 70,618 74,687 82,548
Growth (%) 17.3 23.9 11.1 - 2.9 - 7.9 5.8 10.5
EBITDA 5,291 6,312 7,782 8,601 8,073 6,518 6,526 7,799
EBITDA (%) 10.8 11.0 10.9 10.9 10.5 9.2 8.7 9.4
EBITDA Growth (%) 19 23 11 - 6 - 19 0 19
Depreciation 777 766 860 1,105 1,146 1,048 1,212 1,273
EBIT 4,514 5,546 6,922 7,496 6,927 5,470 5,315 6,525
Other Income 493 480 512 584 792 815 650 661
Interest 982 1,033 1,190 1,662 1,086 1,240 1,120 1,100
PBT 4,026 4,993 6,244 6,417 6,633 5,046 4,844 6,087
Tax 1,335 1,773 2,231 2,026 2,161 2,066 1,342 1,686
EO items (net of tax) - - - 239 1,684 2,174 - -
RPAT 2,691 3,220 4,013 4,631 6,155 5,154 3,502 4,401
EO items (net of tax) - - - 180 1,263 1,631 - -
APAT 2,691 3,220 4,013 4,802 4,963 3,776 3,502 4,401
APAT Growth (%) 34.9 19.7 24.6 19.7 3.4 - 23.9 - 7.2 25.6
EPS 18.1 21.6 27.0 32.3 33.3 25.4 23.5 29.6
EPS Growth (%) 34.9 19.7 24.6 19.7 3.4 - 23.9 - 7.2 25.6

SOURCES OF FUNDS
Share Capital 307 307 307 309 298 298 298 298
Reserves 24,480 27,394 31,215 35,047 38,330 43,315 46,419 50,420
Minority Interest
Long Term Debt 3,211 3,903 4,542 2,993 3,522 4,890 4,542 4,542
Short Term Debt 2,315 3,830 1,924 10,349 9,331 16,531 7,078 6,078
Total Debt 5,526 7,732 6,466 13,342 12,853 21,421 11,620 10,620
Other Non-Current Liabilities 597 1,750 2,571 2,727 2,510 2,134 1,494 1,494
Deferred Taxes -410 -312 -157 51 -234 644 644 644
Net Block 5,210 5,268 5,707 6,337 6,745 6,474 5,536 4,873
CWIP 26 167 77 395 144 39 49 59
Inventories 4,542 4,828 6,221 7,389 5,983 6,109 8,421 9,359
Debtors 28,480 33,805 33,716 36,177 38,465 32,405 36,832 40,709
Cash & bank balances 2,110 816 1,455 3,371 3,121 7,471 3,186 2,327
ST Loans & Advances 4,854 5,390 4,389 6,306 6,303 4,742 6,126 6,249
Other Assets 8,261 14,351 24,311 27,929 26,726 36,614 27,815 28,372
Creditors 19,327 23,377 26,863 28,704 28,950 22,848 23,254 26,309
Page | 77

PBT 4,026 4,993 6,244 6,657 8,313 7,220 4,844 6,087
Non-operating & EO items -300 -508 -402 -1,566 417 -3,162 -2,055 -1,336
Interest expenses 982 1,033 1,190 1,662 1,086 1,240 1,120 1,100
Depreciation 777 766 860 1,105 -1,146 1,048 1,212 1,273
Working Capital Change -714 -3,836 -289 -3,334 -4,574 -4,392 4,055 -2,928
Tax paid -1,553 -1,413 -2,349 -2,095 -2,117 -1,495 -1,342 -1,686
OPERATING CASH FLOW ( a ) 3,217 1,035 5,253 2,429 1,979 457 7,834 2,510
Capex -576 -1,063 -1,184 -1,698 -1,051 -385 -620 -620
Free cash flow (FCF) 2,641 -29 4,070 731 928 72 7,214 1,890
Investments -1,961 -701 -545 -1,828 2,249 660 -250 -250
Non-operating income 422 -111 4 -1,240 1,262 986 0 0
INVESTING CASH FLOW ( b ) -2,114 -1,876 -1,725 -4,766 2,460 1,261 -870 -870
Share capital Issuance 0 0 0 0 -1,769 0 0 0
Debt Issuance 970 784 -1,258 6,733 -325 4,099 -9,801 -1,000
Dividend Payment 0 -363 -449 -1,192 -1,266 -223 -399 -399
Others
Interest expenses -1,001 -909 -1,209 -1,532 -1,001 -1,244 -1,120 -1,100
FINANCING CASH FLOW ( c ) -31 -488 -2,915 4,009 -4,360 2,632 -11,320 -2,499
NET CASH FLOW (a+b+c) 1,072 -1,329 617 1,669 60 4,348 -4,356 -858
Opening Cash & Equivalents 1,007 2,110 748 1,455 3,371 3,121 7,471 3,086
Adj - EO Items 31 35 -90 -337 -27 -29
Cash from Acq of Subsidiary
Adj - Treasury Investments 90 337 27 29 100
Closing Cash & Equivalents 2,110 816 1,455 3,371 3,121 7,471 3,186 2,327
Key Ratios
PROFITABILITY (%)
GPM 29.9 28.2 26.2 25.3 27.7 25.2 24.2 23.9
EBITDA Margin 10.8 11.0 10.9 10.9 10.5 9.2 8.7 9.4
EBIT Margin 9.2 9.7 9.7 9.5 9.0 7.7 7.1 7.9
APAT Margin 5.5 5.6 5.6 6.1 6.5 5.3 4.7 5.3
RoE 11.5 12.3 13.6 14.4 13.4 9.2 7.8 9.0
Core RoCE 14.0 14.5 14.7 14.3 11.5 6.9 7.8 9.5
RoCE 11.5 11.8 13.0 13.7 11.4 7.7 7.0 8.7
EFFICIENCY
Tax Rate (%) 33.2 35.5 35.7 31.6 32.6 40.9 27.7 27.7
Asset Turnover (x) 8 9 10 9 8 6 7 7
Inventory (days) 34 31 32 34 28 32 41 41
Debtors (days) 212 215 173 167 183 167 180 180
Other Current Assets (days) 98 126 147 158 157 213.75 166 153
Payables (days) 144 149 138 133 138 118 114 116
Debt/EBITDA (x) 1.0 1.2 0.8 1.6 1.6 3.3 1.8 1.4
Net D/E 0.1 0.2 0.2 0.3 0.3 0.3 0.2 0.2
PER SHARE DATA
EPS (INR/sh) 18.1 21.6 27.0 32.3 33.3 25.4 23.5 29.6
CEPS (INR/sh) 23.3 26.8 32.7 39.7 41.0 32.4 31.7 38.1
DPS (INR/sh) 2.0 2.5 3.5 3.5 3.5 3.5 3.5 3.5
BV (INR/sh) 166.5 186.0 211.7 237.4 259.4 292.9 313.7 340.6
VALUATION
P/E 20.6 17.2 13.8 11.5 11.2 14.7 15.8 12.6
P/BV 2.2 2.0 1.8 1.6 1.4 1.3 1.2 1.1
EV/EBITDA 11.1 9.9 7.8 7.6 8.1 10.6 9.8 8.2
OCF/EV (%) 5.5 1.7 8.7 3.7 3.0 0.7 12.3 3.9
FCF/EV (%) 4.5 - 0.0 6.7 1.1 1.4 0.1 11.3 3.0
FCFE/Market Cap (%) 6.5 1.4 5.1 13.5 1.1 7.5 - 4.7 1.6
Dividend Yield (%) 0.5 0.7 0.9 0.9 0.9 0.9 0.9 0.9
Page | 78
KEC International (INR mn)

Net Revenues 85,844 1,00,580 1,10,005 1,19,654 1,31,142 1,37,423 1,48,735 1,61,636
Growth (%) 0.8 17.2 9.4 8.8 9.6 4.8 8.2 8.7
Material Expenses 59,489 72,716 81,230 84,183 96,076 1,04,582 1,11,230 1,18,734
EBITDA 8,179 10,062 11,499 12,343 11,412 9,035 9,504 15,176
EBITDA (%) 9.5 10.0 10.5 10.3 8.7 6.6 6.4 9.4
EBITDA Growth (%) 18.1 23.0 14.3 7.3 (7.5) (20.8) 5.2 59.7
Depreciation 1,297 1,097 1,171 1,472 1,525 1,579 1,648 1,790
EBIT 6,882 8,964 10,328 10,871 9,887 7,456 7,856 13,386
Interest 2,536 2,466 3,119 3,080 2,627 3,160 3,954 4,193
PBT 4,634 6,902 7,435 7,903 7,559 4,431 4,104 9,415
Tax 1,587 2,298 2,571 2,248 2,032 674 1,172 2,524
APAT 3,048 4,604 4,864 5,655 5,527 3,757 2,932 6,890
EO items (net of tax) (436) - -
RPAT 3,048 4,604 4,864 5,655 5,527 3,321 2,932 6,890
APAT Growth (%) 106.1 51.1 5.7 16.3 (2.3) (39.9) (11.7) 135.0
EPS 11.9 17.9 18.9 22.0 21.5 12.9 11.4 26.8
EPS Growth (%) 106.1 51.1 5.7 16.3 (2.3) (39.9) (11.7) 135.0

SOURCES OF FUNDS
Share Capital 514 514 514 514 514 514 514 514
Reserves 15,349 19,460 23,837 27,462 33,083 35,685 37,384 43,349
Minority Interest
Long Term Debt 7,757 7,384 5,411 1,527 2,187 3,933 3,933 2,933
Short Term Debt 22,014 31,036 24,976 33,316 32,323 46,938 50,438 50,938
Total Debt 29,771 38,421 30,386 34,843 34,510 50,870 54,370 53,870
Other Non-Current Liabilities 146 177 139 1,280 1,270 1,816 1,816 1,816
Deferred Taxes 1,240 1,007 1,183 527 (68) (1,703) (1,703) (1,703)
Net Block 9,577 9,202 9,787 11,292 11,821 12,879 12,983 13,443
CWIP 51 781 73 840 179 25 40 55
Goodwill 1,910 1,920 2,037 2,226 2,154 2,497 2,497 2,497
Inventories 3,947 6,274 6,410 7,758 8,423 10,665 12,609 10,817
Debtors 42,268 50,444 48,753 54,259 53,847 51,061 55,012 59,783
Cash & bank balances 2,080 2,313 2,762 1,636.7 2,492 2,619 2,048 2,421
ST Loans & Advances 624 604 336 1,020 997 - - -
Other Assets 23,973 28,808 43,251 45,538 53,078 72,524 77,601 84,585
Total Current Assets 72,891 88,443 1,01,511 1,10,211 1,18,835 1,36,869 1,47,270 1,57,605
Creditors 39,101 44,713 60,068 63,328 69,901 73,187 78,508 83,853
Other Current Liabilities & Provisions 1,027 833 503 593 651 878 878 878
Page | 79

PBT 4,634 6,902 7,476 7,903 7,559 3,994 4,104 9,415
Non-operating & EO items 2,159 764 (1,015) 583 1,071 546 - -
Depreciation 1,297 1,097 1,171 1,472 1,525 1,579 1,648 1,790
Working Capital Change 7,034 (2,338) (5,787) (8,670) (2,249) (9,253) (5,651) (4,618)
Tax paid (1,044) (2,296) (2,977) (3,493) (2,088) (2,863) (1,172) (2,524)
OPERATING CASH FLOW ( a ) 16,616 6,596 1,987 874 8,445 (2,837) 2,882 8,256
Capex (670) (1,355) (1,083) (2,020) (1,137) (1,417) (1,766) (2,266)
Free cash flow (FCF) 15,946 5,241 905 (1,146) 7,308 (4,254) 1,116 5,990
Investments (1,050) 911 835 (93) 214 (685) - -
Non-operating income (111) 400 (446) 933 (351) 55 - -
INVESTING CASH FLOW ( b ) (1,831) (45) (695) (1,179) (1,274) (2,047) (1,766) (2,266)
Debt Issuance (11,223) (3,765) 2,282 4,273 (3,083) 8,709 3,500 (500)
Dividend Payment (11) (411) (614) (1,558) (5) (1,025) (1,233) (925)
Others - - - - - - - -
FINANCING CASH FLOW ( c ) (13,790) (6,382) (1,499) 25 (6,639) 4,959 (1,687) (5,617)
NET CASH FLOW (a+b+c) 995 170 (206) (280) 533 75 (571) 372
Opening Cash & Equivalents 853 2,080 2,313 2,762 1,637 2,492 2,620 2,049
Adj - EO Items 232 63 655 (845) 322 54
Cash from Acq of Subsidiary
Adj - Treasury Investments
Closing Cash & Equivalents 2,080 2,313 2,762 1,636.7 2,492 2,620 2,049 2,421
Key Ratios
PROFITABILITY (%)
GPM 30.7 27.7 26.2 29.6 26.7 23.9 25.2 26.5
EBITDA Margin 9.5 10.0 10.5 10.3 8.7 6.6 6.4 9.4
EBIT Margin 8.0 8.9 9.4 9.1 7.5 5.4 5.3 8.3
APAT Margin 3.6 4.6 4.4 4.7 4.2 2.4 2.0 4.3
RoE 21.2 25.7 21.9 21.6 18.0 9.5 7.9 16.9
Core RoCE 9.8 12.6 13.2 14.3 12.2 9.3 7.2 11.7
RoCE 9.8 12.0 12.2 13.4 11.4 7.7 6.4 10.5
EFFICIENCY
Tax Rate (%) 34.2 33.3 34.6 28.4 26.9 15.2 28.6 26.8
Asset Turnover (x) 5.5 6.3 6.3 5.8 5.9 5.5 5.6 5.6
Inventory (days) 17 23 21 24 23 28 31 24
Debtors (days) 180 183 162 166 150 136 135 135
Payables (days) 166 162 199 193 195 194 193 189
Debt/EBITDA (x) 3.6 3.8 2.6 2.8 3.0 5.6 5.7 3.5
Net D/E 1.7 1.8 1.1 1.2 1.0 1.3 1.4 1.2
PER SHARE DATA
EPS (INR/sh) 11.9 17.9 18.9 22.0 21.5 12.9 11.4 26.8
CEPS (INR/sh) 16.9 22.2 23.5 27.7 27.4 19.1 17.8 33.8
DPS (INR/sh) 1.6 2.4 2.7 3.4 4.0 4.0 4.0 3.0
BV (INR/sh) 61.7 77.7 94.7 108.8 130.7 140.8 147.4 170.6
VALUATION
P/E 37.5 24.8 23.5 20.2 20.7 34.4 38.9 16.6
P/BV 7.2 5.7 4.7 4.1 3.4 3.2 3.0 2.6
EV/EBITDA 17.3 14.9 12.3 11.9 12.8 18.0 17.5 10.9
OCF/EV (%) 11.7 4.4 1.4 0.6 5.8 -1.7 1.7 5.0
FCF/EV (%) 11.2 3.5 0.6 -0.8 5.0 -2.6 0.7 3.6
FCFE/Market Cap (%) 4.1 1.3 2.8 2.7 3.7 3.9 4.0 4.8
Dividend Yield (%) 0.4 0.5 0.6 0.8 0.9 0.9 0.9 0.7
Page | 80
L&T (INR mn)

Net Revenues (including E&A) 10,93,118 11,96,831 13,52,203 14,54,524 13,59,790 15,65,212 17,74,286 20,06,862
Growth (%) 8.1 9.5 13.0 7.6 (6.5) 15.1 13.4 13.1
Material Expenses 7,19,780 7,71,067 8,82,474 8,93,208 8,67,009 9,97,385 11,43,944 13,04,011
Employee Expenses 1,38,531 1,52,925 1,74,664 2,31,140 2,47,620 2,97,335 3,34,513 3,78,650
Other Operating Expenses 1,24,061 1,37,127 1,41,768 1,66,886 88,920 88,319 91,069 92,274
EBITDA 1,10,747 1,35,713 1,53,296 1,63,290 1,56,241 1,82,173 2,04,760 2,31,927
EBITDA (%) 10.1 11.3 11.3 11.2 11.5 11.6 11.5 11.6
EBITDA Growth (%) 5.8 22.5 13.0 6.5 (4.3) 16.6 12.4 13.3
Depreciation 23,699 19,287 19,230 24,623 29,042 29,480 32,572 32,813
EBIT 87,048 1,16,426 1,34,066 1,38,667 1,27,199 1,52,694 1,72,188 1,99,113
Interest 13,398 15,385 18,026 27,967 39,134 31,257 32,401 32,526
PBT 88,874 1,16,391 1,37,353 1,34,310 1,69,177 1,45,076 1,63,355 1,91,334
Tax 20,066 31,989 40,671 32,632 40,108 42,166 43,289 50,703
Minority Interest 4,443 6,346 7,421 6,907 13,384 17,499 18,610 21,095
Share of Associate profits (3,952) (4,359) (210) 720 144 1,282 671 763
RPAT 60,413 73,698 89,051 95,490 1,15,829 86,693 1,02,127 1,20,299
EO items (net of tax) (1,214) (1,230) (2,948) - (46,819) (969)
APAT 59,198 72,468 86,104 95,490 69,010 85,724 1,02,127 1,20,299
APAT Growth (%) 43.0 22.4 18.8 10.9 (27.7) 24.2 19.1 17.8
EPS 42.2 51.7 61.4 68.1 49.2 61.1 72.8 85.8
EPS Growth (%) 43.0 22.4 18.8 10.9 (27.7) 24.2 19.1 17.8

SOURCES OF FUNDS
Share Capital 1,866 2,803 2,806 2,808 2,809 2,810 2,810 2,810
Reserves 5,00,299 5,53,767 6,20,943 6,64,424 7,55,876 8,21,267 8,74,016 9,40,001
Total Shareholders’ Funds 5,02,165 5,56,570 6,23,748 6,67,232 7,58,685 8,24,077 8,76,826 9,42,811
Minority Interest 35,636 56,250 68,261 95,208 1,20,515 1,29,661 1,48,271 1,69,365
Long Term Debt 7,74,195 8,81,922 9,63,313 10,59,861 10,48,394 9,29,913 10,28,394 10,68,394
Short Term Debt 1,65,345 1,93,319 2,92,238 3,50,210 2,77,658 3,04,770 2,57,658 2,47,658
Total Debt 9,39,540 10,75,241 12,55,552 14,10,071 13,26,052 12,34,682 12,86,052 13,16,052
Deferred Taxes 6,110 6,379 3,111 14,530 11,787 10,393 10,393 10,393
TOTAL SOURCES OF FUNDS 14,92,699 17,03,895 19,59,794 22,20,867 22,43,509 22,24,653 23,47,383 24,64,462
Net Block 1,16,652 1,26,726 1,51,125 2,97,008 3,05,841 2,93,082 2,81,013 2,68,703
CWIP 1,32,979 1,34,434 1,39,195 33,111 5,004 12,496 13,496 14,496
Goodwill 13,987 15,618 18,269 80,114 80,670 74,770 74,770 74,770
Investments 90,661 1,01,929 1,14,287 1,32,889 1,42,837 1,57,625 1,73,387 1,73,387
Other Non-Current Assets 7,39,512 9,04,470 10,37,460 10,85,266 10,42,570 10,11,705 12,22,931 12,42,493
Total Non-current Assets 10,93,790 12,83,177 14,60,336 16,28,388 15,76,921 15,49,677 17,65,597 17,73,848
Inventories 41,397 48,478 64,139 57,467 58,205 59,433 68,950 78,598
Debtors 2,86,890 3,46,541 3,70,382 4,07,315 4,22,298 4,61,389 5,54,708 6,27,899
Cash & bank balances 1,96,062 1,74,968 2,56,724 2,78,175 4,72,527 4,87,457 3,27,797 4,29,761
ST Loans & Advances 19,738 23,536 24,890 22,383 2,354 2,803 4,060 4,669
Other Assets 4,68,983 5,59,215 6,14,870 6,87,673 5,80,432 6,39,729 6,76,087 7,43,695
Total Current Assets 10,13,070 11,52,737 13,31,005 14,53,014 15,35,816 16,50,812 16,31,601 18,84,622
Creditors 2,51,058 3,15,714 4,29,948 4,36,439 4,57,452 5,11,442 5,64,137 6,43,074
Other Current Liabilities & Provisions 3,63,103 4,16,305 4,01,598 4,24,095 4,11,776 4,64,394 4,85,678 5,50,935
Total Current Liabilities 6,14,162 7,32,019 8,31,546 8,60,534 8,69,228 9,75,836 10,49,815 11,94,008
Net Current Assets 3,98,908 4,20,718 4,99,459 5,92,479 6,66,588 6,74,976 5,81,787 6,90,614
TOTAL APPLICATION OF FUNDS 14,92,699 17,03,895 19,59,794 22,20,867 22,43,509 22,24,653 23,47,383 24,64,462
Page | 81

PBT 87,659 1,15,162 1,42,862 1,43,142 2,30,263 1,44,107 1,64,026 1,92,097
Non-operating & EO items (7,971) (10,696) (9,992) (2,192) (1,21,194) (4,717) (23,568) (24,747)
Depreciation 23,699 19,287 19,230 24,623 29,042 29,480 32,572 32,813
Working Capital Change (13,980) (1,98,757) (1,62,472) (77,845) 1,01,979 47,566 (1,54,498) (26,425)
Tax paid (32,017) (34,034) (45,816) (40,465) (34,710) (45,521) (43,289) (50,703)
OPERATING CASH FLOW ( a ) 66,553 -1,00,310 -47,168 66,939 2,30,738 1,91,636 7,645 1,55,562
Capex (28,208) (20,150) (34,746) (32,994) (9,223) (30,399) (21,503) (21,503)
Free cash flow (FCF) 38,345 -1,20,461 -81,914 33,945 2,21,515 1,61,237 -13,858 1,34,059
Investments (1,06,978) 19,025 (82,801) 37,827 (1,79,381) (25,705) (15,762) -
Non-operating income 37,226 40,270 7,553 (87,395) 1,32,019 19,427 23,568 24,747
INVESTING CASH FLOW ( b ) -97,959 39,145 -1,09,994 -82,563 -56,585 -36,677 -13,697 3,244
Share capital Issuance 533 495 113 176 159 110 - -
Debt Issuance 48,804 1,26,190 1,78,653 1,38,176 (87,325) (84,132) (20,000) 30,000
Dividend Payment (20,931) (23,898) (26,471) (45,513) (36,509) (25,284) (49,377) (54,314)
Others 22,293 15,624 31,938 (1,726) 4,811 (12,830) - -
FINANCING CASH FLOW ( c ) 28,959 93,705 1,54,410 63,716 (1,52,744) (1,51,815) (1,01,778) (56,841)
NET CASH FLOW (a+b+c) -2,448 32,539 -2,752 48,092 21,409 3,144 -1,07,831 1,01,965
Opening Cash & Equivalents 1,28,841 1,96,062 1,74,968 2,56,724 2,78,176 4,72,527 4,87,457 3,27,797
Adj - EO Items 1,608 (5,274) 39,689 (14,176) (920) 823 - -
Other deposits - - - - (9,253) 23,150 - -
Cash from Acq of Subsidiary 68,060 (48,360) 44,819 (12,464) - - - -
Adj - Treasury Investments 1,83,115 (12,187)
Closing Cash & Equivalents 1,96,062 1,74,968 2,56,724 2,78,175 4,72,527 4,87,457 3,27,797 4,29,761
Key Ratios
PROFITABILITY (%)
GPM 34.2 35.6 34.7 38.6 36.2 36.3 35.5 35.0
EBITDA Margin 10.1 11.3 11.3 11.2 11.5 11.6 11.5 11.6
EBIT Margin 8.0 9.7 9.9 9.5 9.4 9.8 9.7 9.9
APAT Margin 5.4 6.1 6.4 6.6 5.1 5.5 5.8 6.0
RoE 12.5 13.7 14.6 14.8 9.7 10.8 12.0 13.2
Core RoCE 5.7 6.4 6.3 6.2 5.6 6.8 7.5 8.0
RoCE 4.9 5.3 5.4 5.7 4.5 4.9 5.6 6.1
EFFICIENCY
Tax Rate (%) 22.6 27.5 29.6 24.3 23.7 29.1 26.5 26.5
Asset Turnover (x) 3.8 3.8 6.0 3.7 3.2 3.5 3.8 4.1
Inventory (days) 14 15 17 14 16 14 14 14
Debtors (days) 96 106 100 102 113 108 114 114
Payables (days) 84 96 116 110 123 119 116 117
Debt/EBITDA (x) 19% 20.5% 18.0% 21.6% 14.3% 12.0% 14.3% 13.0%
Net D/E 8.5 7.9 8.2 8.6 8.5 6.8 6.3 5.7
PER SHARE DATA 6.5 7.6 7.4 5.0 3.3 4.9 5.3 6.1
EPS (INR/sh)
CEPS (INR/sh) 42.2 51.7 61.4 68.1 49.2 61.1 72.8 85.8
DPS (INR/sh) 59.1 65.4 75.1 85.6 69.9 82.1 96.0 109.2
BV (INR/sh) 15 17 19 32 26 18 35 39
VALUATION 358 397 445 476 541 587 625 672
P/E
P/BV 42.2 34.5 29.0 26.2 36.2 29.2 24.5 20.8
EV/EBITDA 5.0 4.5 4.0 3.7 3.3 3.0 2.9 2.7
OCF/EV (%) 29.3 25.1 22.8 22.2 21.5 17.8 16.9 14.6
FCF/EV (%) 2.1 (2.9) (1.3) 1.8 6.9 5.9 0.2 4.6
FCFE/Market Cap (%) 1.2 (3.5) (2.3) 0.9 6.6 5.0 (0.4) 4.0
Dividend Yield (%) 2.6 (0.8) 2.7 5.8 4.0 1.9 (2.6) 5.3
Page | 82
Siemens (INR mn)

Year ending September FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
Net Revenues 1,10,148 1,27,251 1,30,005 98,694 1,29,631 1,48,293 1,71,804 2,14,399
Growth (%) 1.9 15.5 2.2 (24.1) 31.3 14.4 15.9 24.8
Material Expenses 73,504 85,864 87,561 63,207 88,756 1,00,436 1,15,883 1,44,331
EBITDA 10,512 13,161 15,115 9,903 14,594 16,635 22,739 29,160
EBITDA (%) 9.5 10.3 11.6 10.0 11.3 11.2 13.2 13.6
EBITDA Growth (%) 3.0 25.2 14.8 (34.5) 47.4 14.0 36.7 28.2
Depreciation 1,967 1,967 1,980 2,504 2,282 2,090 2,161 2,263
EBIT 8,546 11,194 13,135 7,399 12,312 14,545 20,578 26,897
Interest 77 82 112 292 196 234 308 333
PBT 16,691 13,912 16,601 10,197 14,709 16,966 23,458 29,556
Tax 5,355 4,973 5,732 2,632 3,679 4,404 6,099 7,684
RPAT 11,336 8,939 10,869 7,565 11,030 12,563 17,359 21,871
EO items (net of tax) (4,425) - 362 9 (403) - - -
APAT 6,911 8,939 11,231 7,574 10,627 12,563 17,359 21,871
APAT Growth (%) 6.3 29.3 25.6 (32.6) 40.3 18.2 38.2 26.0
EPS 19.4 25.1 31.5 21.3 29.8 35.3 48.7 61.4
EPS Growth (%) 6.3 29.3 25.6 (32.6) 40.3 18.2 38.2 26.0
Source: Company, HSIE Research; YE: September

Year ending March FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
SOURCES OF FUNDS
Share Capital 712 712 712 712 712 712 712 712
Reserves 76,335 82,342 89,724 94,028 1,02,565 1,12,087 1,25,172 1,42,414
Total Shareholders’ Funds 77,047 83,054 90,436 94,740 1,03,277 1,12,799 1,25,884 1,43,126
Total Debt - - - - - - - -
Deferred Taxes (2,442) (2,665) (2,410) (2,481) (2,481) (2,481) (2,481) (2,481)
TOTAL SOURCES OF FUNDS 77,178 83,139 91,136 97,329 1,06,069 1,15,801 1,29,106 1,46,576
Net Block 13,344 13,514 11,904 11,651 11,348 11,209 11,047 10,784
CWIP 1,430 624 583 880 880 880 880 880
Investments 550 550 550 550 550 550 550 550
Inventories 10,165 11,389 10,950 11,064 12,158 13,287 15,874 19,771
Debtors 34,156 36,504 38,089 31,239 38,792 42,873 53,069 66,096
Total Current Assets 1,02,610 1,09,204 1,24,089 1,19,206 1,24,958 1,37,818 1,54,417 1,81,278
Creditors 26,556 30,303 32,890 28,594 30,396 33,217 39,686 49,428
Net Current Assets 50,999 52,516 65,531 64,347 71,079 77,605 88,426 1,03,321
Misc. Expenses & Others/Held for Sale - - - 3,938 4,652 6,242 6,956 7,670
TOTAL APPLICATION OF FUNDS 77,178 83,139 91,136 97,329 1,06,069 1,15,801 1,29,106 1,46,576
Page | 83

Year ending March FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
PBT 16,691 13,912 16,416 10,193 14,709 16,966 23,458 29,556
Non-operating & EO items (6,826) (1,345) (4,704) (1,856) (2,593) (2,655) (3,188) (2,992)
Depreciation 1,966 1,967 1,980 2,504 2,282 2,090 2,161 2,263
Working Capital Change 1,744 (8,361) 4,442 (1,426) (12,090) (1,544) (9,896) (8,092)
Tax paid (8,114) (5,834) (6,130) (2,942) (3,679) (4,404) (6,099) (7,684)
OPERATING CASH FLOW ( a ) 5,538 421 12,116 6,765 -1,175 10,688 6,744 13,383
Capex 3,289 (1,788) (141) (98) (1,979) (1,950) (2,000) (2,000)
Free cash flow (FCF) 8,827 (1,367) 11,975 6,667 (3,154) 8,738 4,744 11,383
Investments (2,747) (2,475) (13,516) 5,330 - - - -
Non-operating income 2,137 2,691 3,333 3,057 2,593 2,655 3,188 2,992
INVESTING CASH FLOW ( b ) 2,679 -1,572 -10,324 8,289 614 705 1,188 992
Dividend payment (2,572) (3,000) (3,005) (3,005) (2,493) (3,917) (4,273) (4,629)
Debt Issuance/Lease liabilities paid - - - (714) (714) (714) (714) (714)
FINANCING CASH FLOW ( c ) -2,598 -3,054 -3,112 -3,847 -3,403 -4,865 -5,295 -5,676
NET CASH FLOW (a+b+c) 5,619 -4,205 -1,320 11,207 -3,964 6,528 2,637 8,699
Opening Cash & Equivalents 35,094 40,713 36,457 48,913 55,517 51,553 58,081 60,717
Others - Margin & IPO deposits (cl. Bal) - (51) 13,776 (4,603) - - - -
Key Ratios
Particulars FY17 FY18 FY19 FY20 FY21 FY22E FY23E FY24E
PROFITABILITY (%)
GPM 33.3 32.5 32.6 36.0 31.5 32.3 32.5 32.7
EBITDA Margin 9.5 10.3 11.6 10.0 11.3 11.2 13.2 13.6
EBIT Margin 7.8 8.8 10.1 7.5 9.5 9.8 12.0 12.5
APAT Margin 6.3 7.0 8.6 7.7 8.2 8.5 10.1 10.2
RoE 9.5 11.2 12.9 8.2 10.7 11.6 14.5 16.3
Core RoCE 18.6 18.7 21.0 14.7 21.8 21.5 26.8 30.0
RoCE 9.6 11.2 13.0 8.4 10.9 11.8 14.7 16.4
EFFICIENCY
Tax Rate (%) 32.1 35.7 34.5 25.8 25.0 26.0 26.0 26.0
Asset Turnover (x) 3.4 3.7 3.6 2.7 3.4 3.7 4.1 4.8
Inventory (days) 34 33 31 41 34 33 34 34
Debtors (days) 113 105 107 116 109 106 113 113
Payables (days) 88 87 92 106 86 82 84 84
Cash Conversion (days) 59 50 45 51 58 56 62 62
Debt/EBITDA (x) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Net D/E (0.5) (0.4) (0.5) (0.6) (0.5) (0.5) (0.5) (0.5)
PER SHARE DATA
EPS (INR/sh) 19.4 25.1 31.5 21.3 29.8 35.3 48.7 61.4
CEPS (INR/sh) 24.9 30.6 37.1 28.3 36.3 41.1 54.8 67.8
DPS (INR/sh) 7.2 8.4 8.4 8.4 7.0 11.0 12.0 13.0
BV (INR/sh) 216 233 254 266 290 317 354 402
VALUATION
P/E 141.0 109.0 86.8 128.7 91.7 77.6 56.1 44.6
P/BV 12.7 11.7 10.8 10.3 9.4 8.6 7.7 6.8
EV/EBITDA 88.8 71.3 61.2 92.8 63.3 55.1 40.2 31.0
OCF/EV (%) 0.6 0.0 1.3 0.7 (0.1) 1.2 0.7 1.5
FCF/EV (%) 0.9 (0.1) 1.3 0.7 (0.3) 1.0 0.5 1.3
FCFE/Market Cap (%) 0.9 (0.1) 1.2 0.6 (0.4) 0.8 0.4 1.1
Dividend Yield (%) 0.3 0.3 0.3 0.3 0.3 0.4 0.4 0.5
Page | 84
BUY:
1,000
1,500
100
100
500
120
100
150
100
200
300
400
200
300
400
600
500
2,000
2,500
0
0
0
0
0
20
40
60
80
50
ADD:
SELL:
Aug-21 Aug-21 Aug-21 Aug-21 Aug-21
Sep-21 Sep-21 Sep-21 Sep-21 Sep-21
Oct -21 Oct -21 Oct -21 Oct -21 Oct -21
Nov-21 Nov-21 Nov-21 Nov-21 Nov-21
Dec-21 Dec-21 Dec-21 Dec-21 Dec-21
Rating Criteria
Jan-22 Jan-22 Jan-22 Jan-22 Jan-22
KNR
Feb-22 Feb-22 Feb-22 Feb-22 Feb-22
KEC
Mar-22 Mar-22 Mar-22 Mar-22 Mar-22
Apr-22 Apr-22 Apr-22 Apr-22 Apr-22
May -22 May -22 May -22 May -22 May -22
1 Year price movement
Jun-22 Jun-22 Jun-22 Jun-22 Jun-22

Larsen & Toubro
ITD Cementation
Ashoka Buildcon
Jul- 22 Jul- 22 Jul- 22 Jul- 22 Jul- 22
>+15% return potential

100
500
200
300
100
500
200
400
600
800
200
300
400
600
100
400
500
200
300
400
600
1,000
2,000
3,000
4,000
0
0
0
0
0
REDUCE: -10% to +5% return potential

+5% to +15% return potential
> 10% Downside return potential

PNC Infra
Ahluwalia
S iemens

Dilip Buildcon
Kalpataru Power

1,000
1,500
100
200
300
400
100
150
100
200
300
400
500
2,000
2,500
1,000
2,000
3,000
4,000
0
0
0
0
0
50
IRB
G R Infra

ABB
JMC Projec ts
J.Kumar Infra
400
600
200
400
600
800
100
200
800
1,000
500
1,000
1,500
0
0
0
0
40
60
20
80
Aug-21 Aug-21 Aug-21 Aug-21

Sep-21 Sep-21 Sep-21 Sep-21
Oct -21 Oct -21 Oct -21 Oct -21
Nov-21 Nov-21 Nov-21 Nov-21
Dec-21 Dec-21 Dec-21 Dec-21
Jan-22 Jan-22 Jan-22 Jan-22
Feb-22 Feb-22 Feb-22 Feb-22
HG Infra
Cummins
NCC
Mar-22 Mar-22 Mar-22 Mar-22

Apr-22 Apr-22 Apr-22 Apr-22
PS P Projects
May -22 May -22 May -22 May -22

Jun-22 Jun-22 Jun-22 Jun-22
Jul- 22 Jul- 22 Jul- 22 Jul- 22
Aug-22 Aug-22 Aug-22 Aug-22
Page | 85
Thematic reports by HSIE
Cement: WHRS – A key cog in the Autos: Where are we on “S” curve? FMCG: Defensive businesses but Autos: A changed landscape Banks: Double whammy for some India Equity Strategy: Atma Indian IT: Demand recovery in
flywheel not valuations Nirbhar Bharat sight
Life Insurance: Recovery may be Retail: Whole flywheel is broken? Appliances: Looing beyond near- Pharma: Chronic therapy – A Indian Gas: Looking beyond the India Equity Strategy: Quarterly Real Estate: Ripe for consumption
swift with protection driving term disruption portfolio prescription pandemic flipbook
margins
Indian IT: expanding centre of Indian Chemical: Evolution to Life Insurance: ULIP vs. MF Infrastructure: On the road to Cement: Spotting the sweet spot Pharma: Cardiac: the heartbeat of Life Insurance: Comparative annual
gravity revolution! rerating domestic market report analysis
Indian microfinance: Should you India Equity Strategy: Quarterly Autos: Divergent trends in PVs and India Internet: the stage is set FMCG: Opportunity in adversity - Logistics: Indian Railways - getting Industrials: Triggering a new cycle
look micro as macros disappoint? flipbook 2Ws A comparative scorecard aggressive
Indian IT: raising the bar India Equity Strategy: Quarterly FinTech Playbook: P2M Payments | India Hospitals: capital discipline Autos: Will EVs impact the ‘EV’? Cement: Riding High Power: Reforms essential for
flipbook Surging pool, dwindling yields improving, sustenance is key rennaissance
Fashion & Lifestyle: From a India Equity Strategy: Quarterly Indian Gas Sector: Resilience in the Consumer Durables: Fans - a Quarterly flipbook: Q2FY22– FinTech Playbook: Discount Footwear: No bargains here!
disruptor’s lens II flipbook eye of the storm compounding story but underrated Demand environment improves but Brokers
input cost inflation dents
profitability
Holdcos for portfolio Cement: A concrete road for net- FinTech Playbook: Buy Now Pay India Equity Strategy: PLI: Power: Shifting energy landscape: IT sector: Decoding signal from Vehicle Financing: Secular
diversification zero emissions Later | De-mystifying the Spearheading India’s Grey to green gains pace noise opportunity meets cyclical
tablestakes manufacturing push tailwinds
Health Insurance 1.0: Advantage India Equity Strategy - Capex: on a

SAHIs sustainable upswing
Page | 86
Disclosure:
We, Parikshit Kandpal, CFA, Nikhil Kanodia, MBA & Manoj Rawat, MBA, authors and the names subscribed to this report, hereby certify that all of the views
expressed in this research report accurately reflect our views about the subject issuer(s) or securities. SEBI conducted the inspection and based on their
observations have issued advise/warning. The said observations have been complied with. We also certify that no part of our compensation was, is, or will be
directly or indirectly related to the specific recommendation(s) or view(s) in this report.
Research Analyst or his/her relative or HDFC Securities Ltd. does have/ does not have any financial interest in the subject company. Also Research Analyst or
his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately
preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does have/does not
have any material conflict of interest.
Any holding in stock – No
HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475.
Disclaimer:
This report has been prepared by HDFC Securities Ltd and is solely for information of the recipient only. The report must not be used as a singular basis of any
investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor;
readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this
document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies referred
to in this document (including merits and risks) and should consult their own advisors to determine merits and risks of such investment. The information and
opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information
has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All
such information and opinions are subject to change without notice. Descriptions of any company or companies or their securities mentioned herein are not
intended to be complete. HSL is not obliged to update this report for such changes. HSL has the right to make changes and modifications at any time.
This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen
or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary
to law or regulation or what would subject HSL or its affiliates to any registration or licensing requirement within such jurisdiction.
If this report is inadvertently sent or has reached any person in such country, especially, United States of America, the same should be ignored and brought to
the attention of the sender. This document may not be reproduced, distributed or published in whole or in part, directly or indirectly, for any purposes or in any
manner.
Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or
price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively
assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security.
This document is not, and should not, be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report
should not be construed as an invitation or solicitation to do business with HSL. HSL may from time to time solicit from, or perform broking, or other services
for, any company mentioned in this mail and/or its attachments.
HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of
the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a
market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any
other potential conflict of interests with respect to any recommendation and other related information and opinions.
HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments
made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates,
diminution in the NAVs, reduction in the dividend or income, etc.
HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt
in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations
described in this report.
HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject
company for any other assignment in the past twelve months.
HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date
of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services
or other advisory service in a merger or specific transaction in the normal course of business.
HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation
of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation
of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other
reports that are inconsistent with and reach different conclusion from the information presented in this report.
Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of
the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report.
HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East),
Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066
Compliance Officer: Murli V Karkera Email: complianceofficer@hdfcsec.com Phone: (022) 3045 3600
HDFC Securities Limited, SEBI Reg. No.: NSE, BSE, MSEI, MCX: INZ000186937; AMFI Reg. No. ARN: 13549; PFRDA Reg. No. POP: 11092018; IRDA Corporate
Agent License No.: CA0062; SEBI Research Analyst Reg. No.: INH000002475; SEBI Investment Adviser Reg. No.: INA000011538; CIN - U67120MH2000PLC152193
Mutual Funds Investments are subject to market risk. Please read the offer and scheme related documents carefully before investing.
HDFC securities
Institutional Equities
Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park,
Senapati Bapat Marg, Lower Parel, Mumbai - 400 013
Board: +91-22-6171-7330 www.hdfcsec.com
Page | 87

Infra Sector

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Infra Sector

Uploaded by

Copyright:

Available Formats

SECTOR THEMATIC

FI's limited understanding of risks

Equity requirement >

Equity requirement >

Parikshit Kandpal, CFA Nikhil Kanodia Manoj Rawat

Substantial dilution in bid qualification poses systemic risk Infrastructure: Recommendation

Source: HSIE Research

1,400 23.2% 25.0% 1,200 30.0%

Source: HSIE Research Source: HSIE Research

500 17.8% 17.1% 0.2 700 0.4

Source: HSIE Research Source: HSIE Research

Exhibit 6: L1 vs. NHAI cost of companies based on their net worth

Source: HSIE Research Source: HSIE Research

370 90,000 20.0%

Source: HSIE Research Source: HSIE Research

Is HAM really a viable option in the long run?

Sr. Notification Criteria Relaxation Notification Link

Extension of concession period Concessionaires to be compensated as per

Other changes introduced by the authority

Expected changes in HAM model

Net worth criteria

O&M cost as a fixed percentage of BPC

Reducing grant by half during construction period

 The proposal, if approved, will be applicable only to the new orders to be

Source: HSIE Research

Exhibit 13: Equity requirement pool

Exhibit 14: Net worth pool

Exhibit 15: Cash profit pool

Exhibit 17: Equity required to cash profit ratio

Source: HSIE Research

 Due to lack of experience in constructing/maintaining road assets, the quality of

Rising commodity prices may impact margins

prices will have an adverse 20

Source: Bloomberg, HSIE Research

Exhibit 24: Impact of raw material costs on margins

Average Cost (on project worth INR 100)*

Increased Cost (on project worth INR 100)#

Increase in Cost (on project worth INR 100)

20,000 36.7 40.0

Source: PIB, MoRTH, HSIE Research

Exhibit 26: National Highways (Km in 000’s)

Source: PIB, MoRTH, HSIE Research

Exhibit 27: NHAI awarding and completion trend–km

award ~5,500-6,500 kms in Source: NHAI, MoRTH, HSIE Research

2,000 2,222 20.0

Source: NHAI, HSIE Research

NHAI HAM orders

Exhibit 29: State-wise FY22 NHAI large awards (L1)

Bid pipeline continues to remain strong

Large portion of awarding to unlisted companies

Ashoka Buildcon 105 25 6 24% 154 46 3.3

Enhanced competition among road developers

Exhibit 31: Market share of infra developers in HAM projects

Source: HSIE Research

1,400 23.2% 25.0% 1,200 30.0%

Source: HSIE Research Source: HSIE Research

500 17.8% 17.1% 0.2 700 0.4

Source: HSIE Research Source: HSIE Research

Exhibit 36: While listed companies contributed 47%...

Exhibit 38: Equity requirement as a % average net worth

players have headroom on KNR 40,278 9,543 2,989 18,678 16.0%

Value unlocking through InviTs