INDUSTRY OVERVIEW
Global Infrastructure Sector
The global infrastructure sector has witnessed remarkable growth, with its value
reaching USD 2,242.3 billion in 2023. Experts anticipate this upward trajectory to
continue, projecting a substantial increase to USD 3,267.3 billion by 2027, reflecting a
notable growth rate of 6.48% during the forecast period.
While governments and businesses widely agree on the crucial role of infrastructure in
driving economic growth, there is a prevailing issue of underinvestment in many countries.
The World Economic Forum reveals that global infrastructure investment is projected to
reach USD 79 trillion by 2040. However, the estimated global infrastructure requirement
amounts to approximately USD 97 trillion, highlighting a significant gap of USD 18
trillion. To bridge this gap, the average annual global infrastructure investment would
need to increase by approximately 23% each year. Insuf cient investment in the road and
electricity sectors is primarily responsible for a substantial portion of this
infrastructure gap.
Asia is home to three out of ve countries with the most significant infrastructure
requirements, namely China, India and Japan. These countries collectively account for 39%
of the global investment needs in the infrastructure sector. Notably, China stands out, as
it alone is projected to require a staggering USD 28 trillion in infrastructure
investment.
Regional Infrastructure investment needs upto 2040 ($ billion)
Source: Global Infrastructure Outlook
Indian Infrastructure Sector
The India Infrastructure Sector Market is poised for substantial growth, with
expectations of expanding from USD 186.24 billion in 2023 to USD 294.12 billion by 2028.
This forecast indicates a remarkable compound annual growth rate (CAGR) of 9.57% over the
forecast period spanning from 2023 to 2028.
In the Union Budget 2023-24, capital investment outlay for infrastructure is being
increased by 33% to Rs. 10 lakh crore (US$ 122 billion), which would be 3.3% of GDP. The
Indian government has introduced various formats in order to attract private investments,
especially in roads and highways, airports, industrial parks and higher education and
skill development sectors. FDI in construction development (townships, housing, built-up
In December 2022, there was a notable increase in the production of various key
industries in India. Coal, electricity, steel, cement, fertilizers, re nery products, and
natural gas all experienced growth during this period. The combined Index of Eight Core
Industries (ICI) recorded a provisional increase of 7.4% in December 2022. This growth was
reflected in the combined index reaching 152.2. The positive performance was primarily
driven by the production of coal, re nery products, fertilizers, steel, electricity, and
cement industries. In August 2022, the Prime Minister of India inaugurated the countrys
first second-generation (2G) ethanol project in Panipat. The project, built by the Indian
Oil Corporation Ltd. (IOCL) at an estimated cost of over Rs. 900 crore (US$ 108.7
million), marked an important milestone in advancing sustainable energy initiatives.
Roads and Highways Sector
India has about 63.73 lakh km of road network, which is the second largest in the
world. National Highways play a very important role in the economic and social development
of the country by enabling efficient movement of freight and passengers and improving
access to market. MoRTH and its implementing agencies have implemented multiple
initiatives in last 8 years to augment the capacity of the National Highway Infrastructure
in India.
| National Highways |
1,44,955 km |
| State Highways |
1,67,079 km |
| Other Roads |
60,19,757 km |
| Total |
63,31,791 km |
In order to provide a boost to infrastructure development and enable it to overcome the
impact of COVID-19 pandemic, the Ministry has placed a target of 14,300 km for award,
which is highest ever and 12,200 km for construction for the FY year 2022-23. Overall road
projects exceeding 65,000 km in length, costing more than Rs. 11 lakh crore, are in
progress, of which work in respect of projects of more than 39,000 km length has been
completed and in balance length of more than 26,000 km works are in progress. NHs of 5,774
km length have been constructed during the first nine months of FY 2022-23. The Ministry
has sensitized all project implementing agencies to make extra efforts and maximize the
achievement of the targets for 2022-23. Above average rainfall during last monsoon is
adversely impacting construction progress. Accordingly, there has been a marginal
shortfall in construction of NHs as compared to the same period of previous financial year
2021-22.
The Ministry is closely monitoring construction progress and proactively working with
project implementing agencies, State Governments, contractors/developers, to resolve
issues/bottlenecks in projects and speed up construction of NHs. Periodic review meetings
are being held at various levels, and several steps have been taken to improve liquidity
of funds available with contractors/developers, to expedite progress.
Attractive Opportunities
India presents attractive opportunities in various infrastructure sectors, showcasing
its commitment to technological advancement and development. The country has joined a
global alliance of 15 nations focused on ensuring the ethical use of smart city
technologies. The governments ambitious plan to construct 65,000 kilometers of national
highways at a cost of Rs. 5.35 lakh crore (US$ 741.51 billion) signi es a significant
infrastructure push. Already, 144 Wayside Amenities (WSAs) have been awarded out of a
planned 600+ sites, and there are plans to develop 35 Multimodal Logistics Parks under the
Bharatmala Pariyojana, with a total investment of about Rs. 46,000 crore (US$ 5.55
billion), enhancing cargo handling capacity by 700 MMT.
Furthermore, the government aims to construct 23 new national highways by 2025, taking
advantage of Indias relatively low road-building costs compared to other Asian countries.
Andhra Pradesh is investing US$ 296.05 million to construct an extensive 8,970 kilometers
of roads, further boosting connectivity and infrastructure development. In February 2022,
the National Highways Authority of India (NHAI) unveiled an impressive plan to construct
5,795 kilometers of highways connecting 117 districts, with the project valued at Rs. 1
trillion (US$ 13.09 billion). These initiatives collectively underline Indias commitment
to improving its infrastructure, providing lucrative opportunities for investment and
development in the sector.
Increasing Investment
? Under the Union Budget 2023-24, the Government of India has allocated Rs. 2.7 lakh
crore (US$ 33 billion) to the Ministry of Road Transport and Highways.
? In FY 22 (until November 2021) private sector invested Rs. 15,164 (US$ 1.98 billion)
in roads.
? The Ministry allocated Rs. 3,150 crore (US$ 0.45 billion) for maintenance of roads
and highways in FY20 and Rs. 280 crore (US$ 40 million) for road transport and safety.
Budgetary outlays
? Roads have been the key focus area for budget allocations over the years.
? Under the Union Budget 2023-24, the Government of India has allocated Rs. 2.7 lakh
crore (US$ 33 billion) to the Ministry of Road Transport and Highways.
? In 2023-24, NHAI is allocated Rs. 1.62 lakh crore (US$ 20 billion), all of which is
budgetary support.
? In Andhra Pradesh, 70 projects underway, totaling 2,014 kms and costing Rs. 33,540
crore (US$ 4.09 billion) are currently in progress.
? In March 2023, NHAI has invited bid to help in developing Wayside Amenities at more
than 600 locations on National Highways and Expressways by FY25.
? In February 2023, Mr. Nitin Gadkari has approved the development of a 32km long
6-lane Access Controlled Green eld Highway on NH-544G Bengaluru Vijaywada Economic
Corridor in Hybrid Annuity Mode in Andhra Pradesh worth US$ 157 million (Rs. 1,295.65
crore).
COMPANY OVERVIEW
Business Overview
Dhruv Consultancy Services Limited (DCSL) was incorporated in 2003 as Dhruv Consultancy
Services Private Limited under the Companies Act, 1956. The Company is among Indias
leading infrastructure consultancy rms specializing in highways and bridges. It enjoys
robust in-house project management capabilities design engineering, project supervision
and maintenance, and advisory.
The company has a rich portfolio of 96 projects, including 23 Detailed Project Report
Preparation, 55 Construction Supervision, 13 Operation & Maintenance and 5 technical
audits. The company is presently supervising the longest expressway in India Delhi Mumbai
Expressway and altogether has 15% market share in the Indian Infrastructure Consultancy
segment.
The Companys clients primarily comprise of government agencies like MoRTH, NHAI,
UPEIDA, PMGSY among others. DCSL has initially established a strong foothold in
Maharashtra and later in more states, including Gujarat, Karnataka, Uttar Pradesh, Bihar,
Andhra Pradesh, Haryana, and others.
Design Engineering
Over a period of 2 decades, DCSL has successfully completed detailed project reports of
2000 kms of highways in India. This includes feasibility studies, economic analysis,
design of highway and structures, preparation of tender documents, land acquisition,
forest clearances and utility shifting, environmental and social impact assessment. In the
financial year 2023, DCSL was awarded three projects in Andhra Projects i.e. Nakrekal
Vodarevu, Pedna Laxmipuram, Amalapuram-Ravulapalem.
Project Management
DCSL has completed 1400km of Construction Supervision and is currently working on 2000
kms of highways all over the country. With in-house expertise of project supervision for
construction and maintenance activities, the Company is presently working on
access-controlled highways including Delhi-Vadodara, Amritsar-Bhatinda-Jamnagar,
Raipur-Vishakhapatnam, Delhi-Saharanpur-Dehradun, and Bengaluru-Vijaywada.
Advisory
DCSL has robust expertise in carrying out technical audits using high-tech machineries
namely Network Survey Vehicle (NSV), Falling-weight de ectometer (FWD), Horizontal and
Vertical Retro reflectometer, Mobile bridge inspection unit (MBIU) and Automatic traf c
counter-cum-classi er (ATCC). With a high level of accuracy, these machineries ensure
construction and maintenance are carried out as per standards.
FINANCIAL PERFORMANCE
Financial Analysis
The total revenue of the company for FY23 stood at 81.18cr against 75.06cr in FY22
registering a growth of 8%. The major contribution to the revenue is from Construction
Supervision projects of National Highways under MoRTH and NHAI.
The total expenditure for FY23 increased to 76.63cr from 67.66cr in FY22 registering a
growth of 13% mainly due to mobilization of newly awarded projects.
The employee costs have gone up by 10% from 17.39cr in FY22 to 19.14cr in FY23 due to
new recruitments done for newly awarded projects.
The nance costs has increased by 69.41 Lakh which includes Bank Guarantee issuance
charges of 21 lakh, interest costs of 36 lakh, bank processing fees of 3.57 lakh and
leasing charges of 8 lakh.
Depreciation has increased by 201.79 lakh in FY23 from 84.64 lakh in FY22 to 286.43 in
FY23 due to an increase in xed assets of Plant & machinery and Motor car.
EBITDA for FY23 increased to 10.29cr from in FY23 9.81cr in FY22 registering a growth
of 5%.
PAT has gone down by Rs 93 lakhs from 5.76Cr in FY22 to 4.82 Cr in FY23 due to the
increase in Depreciation costs, Professional fees and Employees cost. The company has
bagged traf c survey projects from Indian Highway Management Company Limited (IHMCL) for
Rajasthan, Haryana and Maharashtra for which equipments have been taken on lease which has
contributed to the increase in depreciation.
Key Financial Ratios
| Particulars |
2022-23 |
2021-22 |
| Return on Equity (%) |
8.45 |
12.56 |
| Return on Capital Employed (%) |
9.63 |
15.13 |
| Debt Equity Ratio |
0.27 |
0.28 |
| Net Pro t Margin (%) |
5.94 |
7.67 |
| Earnings per share ( ) |
3.28 |
4.03 |
Outlook
| Strengths |
| Specialized knowledge and in-house expertise in highways and structures |
| Diverse team with expertise in project management, design engineering, civil
engineering, nance and legal |
| A strong track record of 20 years with completed projects of around 3000 kms in India |
| Strong network across 23 states in the country |
| Ability to offer tailored solutions based on clients specific needs |
| Low Employee Attrition Rate |
| Robust internal control systems for operational ef ciency |
| Weakness |
| Limited availability of manpower due to high industry demand |
| Heavily dependent on central government agencies like NHAI or MoRTH |
| Fluctuations in infrastructure investment, economic conditions or changes in
government policies may affect revenues. |
| Retaining top talent in a competitive scenario becomes challenging |
| Opportunities |
| Increasing focus of Indian Government in infrastructure development |
| With addition of new technologies and systems, new clients can be attracted |
| Exploring opportunities in foreign markets to expand the geographical reach |
| Threats |
| Intense competition from competitor rms may lead to reduced profit margins |
| Changes in laws, permits, or regulations may affect project timelines and costs |
| A recession or economic slowdown can lead to reduced infrastructure spending by
government |
| Political instability could disrupt ongoing projects |
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