Construction and infra sector @ 2012

Construction and infra sector @ 2012
As India’s economy is growing, there is huge demand for growth in infrastructure sector. However, the sector has gone through many ups and downs in 2012. The industry faced several challenges, including high taxation and rise in raw materials costs, which need to be addressed to help the sector grow. In this issue, our editorial team interacted with prominent players from different industry segments within infrastructure sector and highlight their performances.
How the big players performedAshoka Buildcon Ltd. recorded total income of Rs.  309.9 crore for the quarter ending September 30th 2012, compared to Rs.  291.7 of the same period last year. EBIDTA for the quarter end was Rs.  84.1 crore, compared to Rs. 72 crore in the previous year.
Whereas, revenue posted by GMR Infrastructure Ltd was Rs.  2,014 crore for the quarter ending September 30th 2012 compared to Rs.  1,805 crore of same period last year. EBITDA for the quarter end was Rs.  512 crore compared to Rs. 517 crore. PAT for the quarter end stood at Rs. 179 crore compared to Rs. 63 crore for the same period last year.
The standalone turnover posted by HCC for the quarter ended September 30th 2012 is Rs. 864.3 crore compared to Rs, 837.7 crore in the corresponding period of the last year. Turnover stood at Rs. 864.3 crore versus Rs. 837.7 crore in Q2 last year.
While, IVRCL Ltd was not lucky as its counterpart. The company posted net loss of Rs. 39.59 crore for the second quarter ended September 30, 2012 as against a profit of Rs. 8.13 crore for the corresponding period last year. The company’s total income was also lower at Rs. 994.72 crore for the second quarter as against Rs. 1,046.11 crore for the corresponding 3 months last fiscal.
In the entire list, Larsen & Toubro Ltd topped in profits. The company posted a net profit of Rs. 11,373.10 million for the quarter ended September 30th 2012 as compared to Rs. 7,983.90 million for the quarter ended September 30th 2011. Total income has increased from Rs. 1,15,642.50 million for the quarter, ended September 30th 2011 to Rs. 1,35,246.20 million for the quarter, ended September 30th 2012.Reliance Infrastructure Ltd. has posted a profit after tax, minority interest and share of profit of associates of Rs. 3,818.10 million for the quarter ended September 30th 2012 as compared to Rs. 3,616.30 million for the quarter ended September 30th 2011. Total income has declined from Rs. 58,553.40 million for the quarter ended September 30th 2011 to Rs. 57,976.20 million for the quarter ended September 30th 2012.
Order bookingsIn 2012, apart from posting good quarterly results, the companies also bagged various orders. Following are some orders bagged by those companies during 2012. IVRCL Ltd’s building, power and transportation division in November bagged orders worth Rs. 514.74 crore. The company’s irrigation, water and power division in September bagged orders worth Rs. 959.04 crore.While, L&T Construction secured new orders valued over Rs. 1,002 crore across various business segments in November and till date in December. Its power transmission and distribution business bagged orders worth Rs. 742 crore in domestic and international markets. In addition, L&T Construction has secured orders worth Rs. 260 crore from ongoing projects across various business units.
Apart from posting good quarterly results, Reliance Infra in December signed MoU with Wanda Group to set up a Joint Venture for strategic long-term partnership between the two groups. The first priority of the proposed JV will be to develop integrated township projects in India, including but not limited to commercial buildings and residential condos/apartments, hotels, retail space, etc. Wanda Group is the leading real estate developer in the world, and has built over 130 million-sq.- ft. property in 66 integrated projects across 50 cities in China.
ChallengesHigh taxation, rising raw material and transportation costs, and higher fuel costs are some of the biggest challenges. Then there are government policies in land acquisitions and environmental clearance which are continuing to be the headache for the infrastructure sector.
ConclusionThe sharp decline in the economy, of course, has affected the industry, and the government investment to revive it is a positive sign. The government, however, needs to improve the pace of implementation of key projects. Even the infrastructure companies need to upgrade their project management expertise. The successive interaction with industry bodies is an attempt to bring you a comprehensive analysis.n

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