Garapati Radhakrishna, Chairman and Managing Director, RKEC Projects Ltd, has over three decades of experience and specialization in civil and mechanical construction works. Prior to the formation of the Company, he was carrying on the business of civil construction as a sole proprietor under the name of M/s R. K. Engineers and Contractors, which has transformed finally into a public company in November 2016. Under his able guidance, the company has so far executed over
86 Projects successfully worth over Rs1,780cr. The company currently has an unexecuted order book of about Rs780cr.
In an interaction with Mamta Maity, indiainfoline,
Garapati Radhakrishna said, “
We believe that Infrastructure development has been the key priority of the Govt, despite the spending constraints being faced by the government because of high fiscal deficit.”
Can you tell us about RKEC Projects Ltd.’s business segments? And how is the regional presence of the company?
RKEC Projects is a 33 years old leading EPC (Engineering, Procurement and Construction) contractor and primarily engaged in civil construction of Buildings, Roads & Highways, Bridges, Marine Infrastructure and Electrification projects. So far, the company has completed 92 projects worth over Rs1,700cr.
In terms of regional presence, company is a PAN India construction player. During the last decade, company has undertaken and successfully completed many construction projects in India covering states of Andhra Pradesh, Tamil Nadu, Gujarat, Odisha, Rajasthan, Maharashtra, Kerala and Manipur. In addition to these, the company has recently expanded its presence to three more states, Karnataka, Uttar Pradesh and West Bengal with its ongoing projects.
What is the company’s order-book as on date and what are the key projects are being executed?
The company is currently executing nine projects amounting to Rs881.06cr. The unexecuted order book stands at Rs634.75cr at present. During the year FY19, we received seven projects worth Rs712cr. Farakka Bridge Project (construction of 4 lane-bridge over River Ganga) is one of our key largest contracts we received during the year. The remaining value of work on this project alone is over Rs450cr which accounts for about 55% of our total unexecuted order-book.
The other key projects under execution are - construction of coastal berth at JNPT port with total contract value of Rs143cr and Construction of Barge/Vessel Loading Jetty at Honnavar worth contract value of Rs95.94cr. In addition, during the current FY20, we have been declared as L1 in two projects amounting to Rs128.22cr. One of them is for construction of Liquid Cargo Handling Jetty at Haldia Dock Complex, for an amount of Rs91.29cr.
What are the opportunities and challenges that you face?
We believe that Infrastructure development has been the key priority of the Govt, despite the spending constraints being faced by the government because of high fiscal deficit. All the key Infra sectors like Roads & Highways, Ports, Marines Infra, Irrigation and Buildings would remain the focus areas and see the jump in tendering and ordering activities in the coming period. The government has a clear agenda of augmenting Infrastructure of this country which is very much required if the country’s economy is targeted to be Rs5 trillion economy in the next five years.
Apart from tight liquidity conditions in the system, any unavailability of labour, delay in land acquisitions or other environmental clearances may lead to slowdown in execution of projects. However, as the interest rates are expected to remain lower which would help the companies in funding of their projects. Moreover, Govt’s strong focus on improving liquidity in the system would help the sector to remain a key priority and focus area.
Could you throw light on the company’s projected order book status? What is your outlook?
With an unexecuted order book of Rs762.97cr, the company has a strong revenue visibility for the coming years. Moreover, the company has been exploring bids for projects and expected to add good amount of fresh orders going ahead. The company’s balance sheet also remains healthy with Debt/equity at 0.5x in FY19. This makes the company well placed to better execute its projects and further look for opportunities in this space leading to increase in profitability. We are targeting another Rs500cr worth of projects in the next six months.
Overall, the outlook of Indian Infrastructure sector is looking very encouraging with the strong measures taken up by the government in terms of recapitalization of banks and usage of RBI’s surplus money. We remain very positive on the Govt’s intent on improvement in system’s liquidity which would be the key driver to regain momentum in tendering and bidding activities.
Explain us shareholding pattern of the company. Any plans to sell stake?
As on March 2019, the promoters hold 73.62% of the total equity shares and the balance 26.38% is held by the public shareholders. Regarding the stake selling, we have no plans of selling any stake as of now.