K&R at a glance
Indias only End-to-end solutions provider of Railway EPCC Services under one roof
Indian Railways Present Scenario
• 2.40 Lakh Crores of Railway budget allocated for the year 2023-24
• 47% of increment from the previous budgets
• 49% of track length extension
• Mechanization of ROBs to RUBs
• Upgradation of signaling system for better passenger safety techniques
Indian Railways Present Scenario
• 50,000+ track length extension opportunity
• Civil and Mechanical works of ROBs to RUBs convergence
• Upgradation of physical signaling system
• Upgradation of software signaling system
K&R Market Share
• With a proven track record from inception, K&R have been responsible for
many innovations on the horizon of Railway related any work
• Executed several projects offered from Indian Railways
• 20% of track laying, 30% of electrification, 20% of earth works,
18% of ROBs construction, 45% of land acquisition projects done.
K&R provided survey for Last Mile Rail Connectivity for the following clients
K&R Rail entered into Joint Venture Agreement with MEP Group for executing Road
and National Highway Project and also entered into MOU with Sri Avantika Contractors (I)
Limited for execution of Mining and other Projects in Odisha of Odisha State.
• JK Cements Limited.
• Sagar Cements Limited.
• Subarnarekha Port.
• Vedanta Aluminium Project in Odisha.
• Gujarat Mineral Development Corporation Coal Projects in Odisha.
• Salaya Terminal Project (Essar Group) in Gujarat for their Port Project. ?
Gulbarga Cement Project in Karnataka.
• The total expected Order Books value is more than Rs.3000 Crores.
K&R Rail has also opened another subsidiary known as "Robsons Engineering
& Constructions Pvt. Ltd" to meet the domestic and Global trade requirements to
the countries directly from the Indian sub-continent.
K&R Rail has also opened another subsidiary known as "K&R Global LLC
in Dubai" to execute the overseas projects and export requirements for Middle East
and African countries directly from the Indian sub-continent, and also meet the supply
requirements of Indian Railways.
K&R Rail Engineering Limited is also establishing offices in Saudi Arabia
shortly. This improves and add to our core competence and address the market in India and
abroad.
Strategy to Leverage the Opportunities
Augment Product Portfolio:
K&R is working towards utilizing the existing strengths to address the markets and
augmenting it capacities both in terms of offered services and products.
We are working to tie up with a South Korean company listed at KOSDAQ(UNECO). The idea
is to use UNECOs technology to manufacture Precious Slag Balls Pre Stressed Concrete
Sleepers. These sleepers offer better durability and can support train speeds of 350 kmph.
This will help us in establishing ourselves as core supplier to Indian Railways.
Establishing Consortium and JVs:
We are looking forward to establish consortium and JVs with partners offering
supplementary skills to address more projects.
Establishing Global Foot Prints:
We have established a subsidiary company in Dubai to address the upcoming projects in
Middle East and Africa.
Strategy to Leverage the Opportunities
usage for Passenger trains and freight) GCC Component of Kuwait National Railroad
(KNRR) From southern border of Kuwait with Kingdom of Saudi Arabia (Nuwaseeb Point) To
Shedadia (Kuwait Urban Area) which is the. line terminus where the Passenger Station is
located and the approved alignment by Kuwait Municipality with 200 m Right of Way.
• K&R Rail Engineering Limited is in advance stage of negotiation with NUROL
LLC, one of the biggest construction companies in UAE for a tender called Etihad Rail
Company PJSC for Railway Project of Design and Build Contract for Station Links-Sharjah
University.
• K&R Rail Engineering Limited has entered into a strategic MOU with the
Botonia - Sari, Siege Social: Kissosso - Commune De Matoto - Conakry - Republique De
Guinee for executing Projects of more than 2 Billion USD to 10 Billion USD in Guinee, West
Africa.
• K&R Rail Engineering Limited proposed to enter into MOU with MEP
Infrastructure Developers Limited for executing Projects in Congo, Central Africa.
• K&R Rail Engineering Limited is in advance negotiation with Kuwait based
company M/s. Sadeem Al Kuwait for Railway Project for a tender called by Kuwait Railroad
Authority for Phase-1 of 111 Km long (single track - dual K&R Rail Engineering Limited
to capture the business in the Middle East and other countries had established a 100%
subsidiary by name K&R Global LLC in Dubai of Middle East which will become
operational in the next 2-3 months.
Threats...
In certain cases, the project awarding authorities keep stiff qualification criteria
which may disallow small or midsize developers having inadequate financial or technical
scores to bid for the project. The Company has sufficient scores both in terms of
financial or technical aspects to be able to qualify for all categories of projects being
implemented or which are in the pipe line.
Force Maieure Threats
There are certain regions in the country which may carry the risk of the project having
to be abandoned due to force majeure events like natural perils, war, terrorism etc.
However, all the Agreements signed provide proper risk cover in such circumstances with no
adverse financial impact on the Company as it is backed by guarantee and covered through
insurance.
Change in Law
In case the Government makes changes in law which could have an impact on
infrastructure projects, the Agreement provides for the Contractor to be insulated from
any adverse impact arising from such change in law.
Threats are described as anything that would contribute to the interruption of any
infrastructure development in the country. Threats can be either in the form of major
policy changes by the Government, implementation of stringent qualification criteria and
insurgency threats in a specific region. These have been described below:
Policy Changes
Policies for development of infrastructure projects are now prepared keeping in view
longer gestation period and are being given equal importance by all the ruling Governments
as development of the road/rail sector is an example and which is given top most priority
at all levels in Government. However, there are chances of major policy changes by the
Government either National or at State level which can affect the development of a
particular segment of infrastructure. Looking at the current scenario and demand for
infrastructure development in the country, the chances of any major policy change which
can adversely affect infrastructure business in the country are negligible.
Selection Criteria
K&R Achievements
| Has executed Railway Projects of more than 2500 Cr. |
Has Executed Railway Projects for handling more than 40 MTPA to Indian Railway |
| Has executed Rly Embankment work of more than 20 Lacs Cum. |
Has given consultancy to Rly. Projects for handling more than 50 MTPA traffic in
Indian Railway |
| Has executed Maj. and Minor Rly. Bridges of more than 100 nos. |
Has Executed more than 25 EPCC Projects in India |
| Has executed Rly. OHE works of 1 more than 150 ETKM |
Has Executed more than 500 Consultancy Projects in India |
Competitive Advantages
| Experienced & Vision Oriented Leadership |
Strong Customer Relationship |
| Leading EPCC Construction " Company |
Focus on enhancing capacities with appropriate CAPEX allocation |
| Navigating Opportunities * across new geographies |
Strong Corporate Governance |
| Disciplined Financial P Management |
Global Presence |
Business Strategy
| New Management Introduction |
Focus on Increasing the Share of Value-Added Products |
Focus on Exports |
|
Product Mix: |
|
| KRREL has appointed Senior Personnel from the industry, at the helm of the affairs.
Their insights include setting up new operations, technology development, sales &
marketing, business development and project management, |
• Trading of Coal & Stainless Steel |
KRREL is consistently growing organisation, and exploring Railway projects in: |
| These driving forces ensures, meeting challenges of K&Rs business goals,
organizational development, financial performance and importantly customer satisfaction
within the time lines. |
• Construction of Highways |
Middle East-Qatar, Saudi Arabia & UAE |
|
• Toll collection projects of NHAI |
African countries - Algeria, Egypt & Morocco. |
|
• Execution of Civil works for L&T |
K&R Rail Engineering Limited is striving to capture the business in the Middle
East and other countries had established a 100% subsidiary by name K&R Global
LLC in Dubai of Middle East. |
|
• Supply of Bridge Steel Girders |
|
|
• Construction of Warehouses |
|
|
• Construction of High-rise Buildings |
|
|
KRREL has recently added of some very niche product lines which are highly margin
accretive and volume potential. T he Company is expecting 25% contribution of these
Value-Added Products byFY25. |
|
Risks and Concerns
Apart from that Construction risk, Environmental Risk and Time overrun risk, the
biggest challenges for any infrastructure project is acquiring land in time, as it often
involves resettlement of people and compensation issues. K&R Rail is having highly
qualified and experienced team of former railway engineers, revenue officers and
bureaucrats who are experts in identification, assessment, and mitigation all risk
strategically.
Internal control systems and their adequacy.
| CONTROL ENVIRONMENT |
• Demonstrate commitment to integrity and ethical values & Commitment to
competence. |
| K&R has implemented various internal control systems. |
• Exercise oversight responsibility. |
|
• Establish structure, authority and responsibility. |
|
• Enforce accountability. |
| RISK ASSESSMENT |
• Specify suitable objectives. |
| K&R put in place risk assessment analyst headed by the CEO for the same. |
• Identify and analyse risk. |
|
• Assess fraud risk. |
|
• Identify and analyse significant change. |
| CONTROL ACTIVITIES |
• Select and develop control activities. |
| K&R has initiated appropriate control activities by deploying smart edge IT
solution for enabling the same. |
• Select and develop general controls over technology. |
|
• Deploy through policies and procedures. |
| INFORMATION & COMMUNICATION |
• Use relevant Information. |
| K&R works with IT partners, who are leaders in their field to address the same. |
• Communicate internally. |
|
• Communicate externally |
| Monitoring |
• Conduct ongoing and/or separate ^ evaluations. |
| K&R put in place internal committee headed by the CFO for monitoring
activities. |
• Evaluate and communicate deficiencies. |
Capital Market Information
Market Indicator as on 25/08/23 |
| Incorporated |
1983 |
| Listed on |
BSE |
| BSE Scrip Code |
KRRAIL/514360 |
| Issued Share |
3,33,54,061 |
| Share Price as on 24.08.23) |
595.55 |
| Market Capital (Rs. Mn) |
11,458.30 |
| Share Holding Pattern as on |
|
| 31/03/23 |
|
| Promoter & Promoter Group |
74.88 % |
| Institutions |
0.00% |
| Public |
25.12% |
| Total |
100.00 % |
Key Financial Analysis
Discussion on Financial Performance with Respect to Operational Performance
During the period under review, the turnover of the Company increased by 99.82% to Rs.
3,902.46 Million in the financial year 2022-23 from Rs. 1,953.01 Million in the financial
year 2021-22. The significant increase is on account of merger of Subsidiary company
"M/s Robsons Engineering & Constructions Pvt. Ltd." and the number of
projects awarded during the financial year as compared to projects accorded in the
previous year. The increase in turnover also has had a significant impact on the results
for the year.
Other key operating data for the year were as under:
Earnings before Interest, Tax, Depreciation and Amortization grew from Rs. 115.34
Million in 2021-22 to Rs. 137.91 Million in 2022-23 registering an increase of 19.56% over
the previous year.
Profit Before Tax grew from Rs. 85.79 Million in 2021-22 to Rs. 88.55 Million in
2022-23 registering an increase of 3.22% over the previous year.
Profit after Tax grew from Rs. 60.55 Million in 2021-22 to Rs. 62.81 Million in 2022-23
registering an increase of 3.73% over the previous year.
Earnings per share on basic and diluted basis stood at Rs. 4.01 per share as at March
31, 2023 as against Rs. 3.95 per share as at March 31, 2022 registering a growth of 1.52%
over the previous year.
The increase in investments in a number of projects awarded were domiciled. This
resulted in an increase in the overall borrowings that were availed of partly fund the
investments in new projects.
The debt equity ratio as at March 31, 2023 stood at 0.88:1. The growth in the business
also resulted in an increase in debtors at the end of the year.
Outlook
The Company aims to procure mandates for the mega rail projects considered to be
landmarks in the Indian railway sector.
The Government of India has accorded the highest priority to Infrastructure after
Agriculture which itself suggests that there is likely to be a continuous flow of new
projects in all sectors and hence the Companys outlook for the coming years is positive.
The Company already has a large portfolio of projects under various stages of
implementation.
The Company believes that its financial position would improve with the number of
projects in the pipeline and the Company aims to procure mandates for the Mega rail
projects which are considered to be landmarks in the Indian Railway Sector both in terms
of project size and in physical and financial terms. The Company has also been declared as
the preferred bidder in an International project in UAE and is hopeful of additional
International mandates on a select basis.
The Company is also taking various steps such as bidding for Roads, Airports, and Metro
Rail development projects.
Human Resource and Industrial Relation
As on March 31, 2023 the company had 120 employees. At K&R the focus of learning
and development in on building the capabilities of employees so that they are fully geared
to handle the current and future needs of the company. This is also combined with its
strong belief that employees play a pivotal role in the Companys transformation and gear
up for future growth.
The Companys recruitment practice ensures that suitable candidates with merit are
recruited and provided with the right opportunities to grow within the organization. The
Companys policies favour recruitment at the entry levels and gradual rise for the
meritorious candidates within the organisation
During the year, training programs were held covering behavioural, functional,
managerial and leadership areas. The training programs at the entry level as well as the
continuous learning programs ensures that the Company has the right competency in its work
force that can deliver the customers business needs
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