Arul Sundaram, Chairman and Managing Director, RPP Infra Projects Limited holds a Bachelor of Engineering degree in Civil Engineering from Sri. Vinayaka Mission Research Foundation, Deemed University, Salem, Tamil Nadu and a Diploma in Civil Engineering from Kongu Engineering College, Erode. He has over 22 years of experience in civil works in the fields of transportation, power, commercial buildings and irrigation projects. He has been responsible for strategic direction and development of the company and overall control of the operations. His experience and intimate understanding of the businesses verticals of the operations have played a central role in the rapid growth of the company.
RPP Infra Projects Ltd, incorporated in 1995, has executed over 200 civil construction projects across various segments of construction and infrastructure industry. The Company has diversified its civil work expertise into SEZ Development, Water Management projects, Irrigation and Power Projects. It is doing business in the South Indian region, covering states of Karnataka, Andhra Pradesh, Tamil Nadu and the Union Territory of Andaman Nicobar Islands. The Company has recently entered the Sri Lanka market and currently executing project in the Railway sector.
Replying to Yash Ved of IIFL, Arul Sundaram says, “We will be focusing on project size of Rs800mn to 2bn projects wherein we feel we would be comfortable and less competition with good margins.”
Brief us about your projects in Infrastructure and power space?
We have bagged a series of orders aggregating to approximately Rs. 1bn in the last month. The new orders include bridge work in MSEZL pipeline corridor in Karnataka, renovation & modernization of Mazhampuzha Garden in Kerala, Tsunami Rehabilitation Scheme in Tirunelveli District of Tamil Nadu, River bunding work in Cuddalore District of Tamil Nadu, Construction of Academic Block for Tirunelveli Anna University Engineering College in Thoothukudi District of Tamil Nadu, etc.
We have participated in road sector & infrastructure projects in Madhya Pradesh and waiting for bid openings.
In Power sector we have bought land for Solar Power Projects in the most potential areas in India, and would be forming a consortium or a joint venture to execute the project.
There is a huge potential for road sector and other infrastructure projects in Madhya Pradesh and Chhattisgarh states. We have opened our office at Bhopal and focusing on such projects.
What is your investment in the Solar Power project?
This is in infant stage. Once the JV is finalized we would be jointly decide on the size and investment structure which would be a win-win situation for both the partners.
What is the outlook of the infrastructure industry?
As per XI Five year plan for infrastructure, for the year 2010-11, out of US$1640bn, US$684bn will be for Roads and bridges. In 2011 -12 it will be US$800 bn. There is a huge investment planned for the roads and bridges sector.
When we see the budgetary resources, only 30% of the outlay goes from Government; that too mainly to rural roads.
40% will be coming from internal generations and market borrowings. The remaining 30% accounting to Rs61,9.59bn has to come from the PPPs with investor friendly projects.
So there is a huge potential for infrastructure projects in coming years. We will be focusing on project size of Rs800mn to 2bn projects wherein we feel we would be comfortable and less competition with good margins.
Comment on your capex plan for FY11?
We proposed to purchase equipment worth Rs100mn.
What is the revenue mix?
At present our revenue mix is more than 99% civil construction activities and the revenue from other activities is negligible. However, in the next financial year after entering into solar power, this ratio will widen.
What are your plans for global market?
We have already executed a railway project under Rites in Sri Lanka. We have identified some good projects in Western African countries and south east Asia.
What is your current order book position?
Our order book as of now is around Rs7bn.
Brief us about your financials?
The company has posted net profit at Rs. 199.6mn for Nine months ending December 31, 2011; as compared to Rs. 108.4mn in the corresponding period of the previous year.
The company’s Nine months Revenues stood at Rs. 1.98bn up by 44.55 % as compared to Rs. 1.36bn in the corresponding period, the previous year.
EPS rose to Rs. 8.84 up by 84.16 % as compared to Rs. 4.80 in the corresponding period in previous year.
What is your current promoter holding?
Our current promoter holding stands at 71.23%.