Ramky Infrastructure Ltd Management Discussions.


Infrastructure sector is a key driver for the Indian economy. The sector is highly responsible for propelling Indias overall development and enjoys intense focus from Government for initiating policies that would ensure time-bound creation of world class infrastructure in the country. Infrastructure sector includes power, bridges, dams, roads, and urban infrastructure development. India was ranked 44 out of 167 countries in World Banks Logistics Performance Index (LPI) 2018. India ranked second in the 2019 Agility Emerging Markets Logistics Index.

Ramky Infra focused on reducing its financial leverage but demonetization of assets of the Company and will be focusing to reduce the financial leverage and will be driving organizational change that aimed to deliver operational robustness and sustained long-term profitability.

Market Size

Foreign Direct Investment (FDI) in Construction Development sector (townships, housing, built up infrastructure and construction development projects) stood at US$ 25.66 billion during April 2000 to March 2020, according to Department for Promotion of Industry and Internal Trade (DPIIT). The logistics sector in India is growing at a CAGR of 10.5 per cent annually and is expected to reach US$ 215 billion in 2020.


India requires investment worth Rs 50 trillion (US$ 777.73 billion) in infrastructure by 2022 to have sustainable development in the country. India is witnessing significant interest from international investors in the infrastructure space. Some of the key investments made in the sector are listed below:

Large investment in infrastructure has seen momentum as overall PE

(private equity)/VC (venture capital) investment touched an all-time high of US$ 14.5 billion in 2019.

The largest deal was done by Abu Dhabi Investment Authority, Public

Sector Pension Investment Board and National Investment and Infrastructure Fund as they made investment worth US$ 1.1 billion in GVK Airport Holdings Ltd.

In FY20, the cumulative growth of eight core industries stood at 0.6 per cent.

As on 31 March, 26.02 million households got electricity connection under the Saubhagya Scheme.

In 2019, infrastructure sector witnessed seven merger and acquisition

(M&A) deals worth US$ 1,461 million

Government Initiatives

The Government of India is expected to invest highly in the infrastructure sector, mainly highways, renewable energy, and urban transport.

In April 2020, the Government set a target of constructing roads worth

Rs 15 lakh crore (US$ 212.80 billion) in the next two years.

In May 2020, Border Roads Organisation (BRO) achieved major milestone by digging up a 440-metre long tunnel below the busy Chamba town on Rishikesh- Dharasu road Highway (NH 94).

Indian energy sector is expected to offer investment opportunities worth US$ 300 billion over the next 10 years.

NHAI will be able to generate revenue of Rs one lakh crore (US$ 14.31 billion) from toll and wayside amenities over the next five years.

In the Union Budget 2020-21, the Government has given a massive push to the infrastructure sector by allocating Rs 1,69,637 crore (US$ 24.27 billion) to develop the transport infrastructure.

Communication sector has been allocated Rs 38,637.46 crore (US$

5.36 billion) to develop post and telecommunications departments.

Indian Railways has received an allocation of Rs 72,216 crore (US$ 10.33 billion) under Union Budget 2020-21.


Following are the achievements of the Government in the past four years:

In 2019, the sector witnessed seven merger and acquisition (M&A) deals worth US$ 1,461 million.

In March 2020, NHAI accomplished the highest ever highway construction of 3,979 km of national highways in FY20.

Freight earnings in FY20 (till February 2020) stood at Rs 119,216.11 crore (US$ 17.06 billion), while its gross revenue stood at Rs 183,092.74 crore (US$ 26.20 billion) during the same period.

Cargo traffic handled stood at 707.4 million tonnes (MT) in FY20.

Electricity production in India reached 1,252.61 BU in FY20.

The largest PE investment witnessed was the acquisition of Pipeline

Infrastructure India by Canadian asset management firm Brookfields for US$ 1.9 billion in Q12019.

Indias rank jumped to 22 in 2019 from 137 in 2014 on World Banks

Ease of doing business - "Getting Electricity" ranking.

Energy deficit reduced to 0.7 per cent in FY20 from 4.2 per cent in


Road Ahead

The infrastructure sector has become the biggest focus area for the Government of India. India plans to spend US$ 1.4 trillion on infrastructure during 2019-23 to have a sustainable development of the country. The Government has suggested investment of Rs 5,000,000 crore (US$ 750 billion) for railways infrastructure between 2018-2030.

India and Japan have joined hands for infrastructure development in Indias Northeast states and are also setting up an India-Japan Coordination Forum for Development of Northeast to undertake strategic infrastructure projects for the region.


India is expected to become the third largest construction market globally by 2022.

India will require investment investment worth Rs 50 trillion (US$

777.73 billion) in infrastructure by 2022 to have sustainable development in the country.

Attractive Opportunities

Favorable valuation and earnings outlook makes this sector an attractive opportunity.

Only 24 per cent of the National Highway network in India is four-lane, therefore there is immense scope for improvement.

Increasing Investments

Infrastructure sector attracted US$14.7 billion across 74 deals, accounting for 40 percent of the total private equity /venture capital investment in 2019.

Construction Development sector and Infrastructure activities sector received FDI inflows amounting to US$ 25.66 billion and US$ 16.84 billion, respectively from April 2000 to March 2020.

Policy Support

Initiatives like ‘Housing for All and ‘Smart Cities Mission will drive the growth of the sector.

100 per cent FDI is permitted under the automatic across various infrastructure sectors.


Ramky Infra operates through the following principal business modes:

i. Engineering, Procurement & Construction (EPC) Business which is operated by the Company,

ii. Developer Business which is operated mainly through the special purpose vehicles.


The Company operates the EPC business in the following sectors:

i. Water and Waste Water projects such as water treatment plants, water transmission and distribution systems, elevated and ground level service reservoirs, sewage treatment plants, common effluent treatment plants, tertiary treatment plants, underground drainage systems and lake restorations;

ii. Roads & Bridges projects such as expressways, highways, bridges, flyovers, rural roads, terminals and dedicated service corridors;

iii. Building Construction, which includes commercial, residential, public, institutional and corporate buildings, mass housing, High-Rise, Healthcare Infrastructure, Integrated Townships projects and related infrastructure facilities such as hospitals and shopping malls; and

iv. Irrigation projects such as cross-drainage works, barrages, lift irrigation projects, canals, feeder channels; The flagship company of the Ramky Group, Ramky Infrastructure Ltd. is one of the leading infrastructure companies in India with a wide sectorial presence. Determined continually to foray into fast-growing infrastructure segments across India, the Company has diverse and extensive execution experience across key sectors of growth. Over the years core competence has been further developed by the engineering, planning and project execution skills. Ramky Infra has diversified its business portfolio which helps us in mitigate risk of slowdown in any one particular segment. The Company is professionally managed with very well-qualified and experienced personnel in all following areas including but not limited to engineering, procurement, legal, secretarial, finance and administration combined with a full-fledged MIS system.

Water and Waste Water Sector:

At Ramky, we realise the importance of water in the present times. Our design experts constantly innovate and focus on Water / Waste Water treatment & Distribution to offer reliable and complete water management solutions. A pioneer in the environ-friendly sector and has been a part of key projects till date.

Roads & Bridges Sector:

At Ramky, we know the vitality of roads for the development of the nation. Our Engineers ideate constantly to come up with the possible means of connectivity to make sure that India is powered with state of the art road infrastructure. With a host of prestigious projects underway, the company accelerates towards fast-track progress.

Buildings Sector:

Our construction experts walk in step with the emerging global design trends and construction techniques to ensure progress is built brick by brick. With expertise in building projects across various categories, we are at the forefront of the construction space.

Irrigation Sector:

Our water management experts invest efforts in channelizing the available water sources to ensure that prosperity reaches everyone. Over the years, we have been executing key irrigation projects with established expertise in design, planning, construction and maintenance of irrigation channels.

Industrial Construction Sector:

Our organizational experts constantly strive to improve and gain expertise procedures to deliver excellence to a cross-section of Industries. The company has specialized in delivering infrastructure and related services to empower industrial sector.

Developer Business

The Company conducts its business through subsidiaries/special purpose vehicles/joint ventures/ Associates formed for the development of PPP projects and other projects.


Name of SPV Name of Business
1 Ramky Pharma City (India) Limited A joint venture with GoAP to build, operate and maintain pharma industrial part at Visakhapatnam
2 MDDA-Ramky IS Bus Terminal Limited A joint venture with MDDA to operate Bus and Commercial Mall
3 Ramky Elsamex Hyderabad Ring Road Limited A subsidiary company which developed the Outer Ring Road Project in the State of Telangana under Built Operate and Transfer Model
4 Ramky Towers Limited A joint venture with State Government of Telangana to develop residential towers in Hyderabad
5 Srinagar Banihal Expressway Limited A subsidiary company which developed the Road project to NHAI in the State of Jammu & Kashmir

OPPURTUNITIES & THREATS Strengths & Opportunities

Ramky Infra is an Integrated Infrastructure company with inherent strengths of experienced management team with broad geographic and operational base. It has an execution expertise over diversified array of projects and being considered as one stop shop for end to end project execution.

Growing Competition of Indian industry due to focus on efficient and quality.

Vast export marked to explore.

Growing recognition of "Made in India" brand in global market

Major growth through outscoring opportunities

Presence of Deming award winning firms (Focus on quality)


Ramky Infra recorded the revenue of Rs. 12,535.76 Millions during the year, compared to Rs. 14,766.52 Millions in 2018-19.

Other Incomes

The Other incomes for 2019-20 of Rs. 886.87 Millions has decreased, compared to Rs.1,389.45 Millions in 2018-19.


The expenses for 2019-20 of Rs.13,311.42 Millions has decreased, compared to Rs. 15,686.52 Millions in 2018-19.

Finance Costs

The finance costs for 2019-20 of Rs. 894.97 Millions has decreased, compared to Rs. 1315.31 Millions in 2018-19.

Profit Before Tax

There is Profit Before Tax for 2019-20 of Rs.111.21 Millions compared to Profit Before Tax of Rs. 469.45 Millions in 2018-19

Profits after Tax

The Profit After Tax for 2019-20 of Rs.27.36 Millions as against Profit After Tax of Rs. 412.55 Millions in the previous year 2018-19.

Earnings Per Share

The EPS for 2019-20 decreased to Rs. 0.41 from Rs. 7.00 in Previous Year.


The consolidated financial statements have been prepared and presented in accordance with Indian Accounting Standards (IND AS) as per the Companies (Indian Accounting Standards) Rules, 2015notified under section 133 of the Companies Act, 2013 and other relevant provisions of the Act. The Current year results include the results of 15 Companies including 10 wholly owned subsidiaries, 5 Subsidiaries, 1 Associate and 3 Step-down Subsidiaries. These companies broadly operate in Roads, Bus Terminal, Industrial Parks and others sectors.


The consolidated turnover of the company for 2019-2020 is Rs. 13,870.84 Millions has decreased as compared to Rs. 17,487.63 Millions in 2018-19.

Profit / Loss after Tax

The consolidated Loss After Tax for 2019-20 is Rs. 2,660.29 Millions compared to consolidated Loss of Rs. 0.48 Millions in 2018-19.

Earnings per Share

The consolidated EPS for 2019-20 has decreased to Rs.(29.43) from Rs. 2.55 in Previous Year.


Risk is a multi-facet concept. In the context of construction industry, it could be the likelihood of the occurrence of a definite event/factor or combination of events/factors which occur during the whole process of construction to the detriment of the project a lack of predictability about structure outcome or consequences in a decision or planning situation, the un-certainty associated with estimates of outcomes -there is a chance that results could be better than expected as well as worse than expected etc. In addition to the different definitions of risk, there are various ways for categorizing risk for different purposes too. Some categorize risks in construction projects broadly into external risks and internal risks while others classify risk in more detailed categories of political risk, financial risk, market risk, intellectual property risk, social risk, safety risk, etc. The typology of the risks seems to depend mainly upon whether the project is local (domestic) or international. The internal risks are relevant to all projects irrespective of whether they are local or international.

International projects tend to be subjected to the external risk such as unawareness of the social conditions, economic and political scenarios, unknown and new procedural formalities, regulatory framework and governing authority, etc. Risk is inherent and difficult to deal with, and this requires a proper management framework both of theoretical and practical meanings. Significant improvement to construction project management performance may be achieved from adopting the process of risk assessment. The types of exposure to risk that an organization is faced with are wide-ranging and vary from one organization to another. These exposures could be the risk of business failure, the risk of project financial losses, the occurrences of major construction accidents, default of business associates and dispute and organization risks. It is desirable to understand and identify the risks as early as possible, so that suit-able strategy can be implemented to retain particular risks or to transfer them to minimize any likely negative aspect they may have. The risk management process begins with the initial identification of the relevant and potential risks associated with the construction project. It is of consider-able importance since the process of risk analysis and response management may only be performed on identified potential risks. Risk analysis and evaluation is the intermediate process between risk identification and management. It incorporates uncertainty in a quantitative and qualitative manner to evaluate the potential impact of risk. The evaluation should generally concentrate on risks with high probabilities, high financial consequences or combinations thereof which yield a substantial financial impact.

Once the risks of a project have been identified and analyzed, an appropriate method of treating risk must be adopted. Within a framework of risk management, contractors also should decide how to handle or treat each risk and formulate suitable risk treatment strategies or mitigation measures. These mitigation measures are generally based on the nature and potential consequences of the risk. The main objective is to remove as much as possible the potential impact and to increase the level of control of risk. More the control of one mitigation measure on one risk, the more effective the measure of risk the process of risk management does not aim to remove completely all risks from a project. Its objective is to develop an organized framework to assist decision makers to manage the risks, especially the critical ones, effectively and efficiently. Risks can be viewed as business, technical, or operational. A technical risk is the inability to build the product that will satisfy requirements. An operational risk is the inability of the customer to work with core team members. Risks are either acceptable or unacceptable. A acceptable risk is one that negatively affects a task on the non-critical path. An unacceptable risk is one that negatively affects the critical path. Risks are either short or long term. A short-term risk has an immediate impact, such as changing the requirements for a deliverable. A long-term risk has an impact sometime in the distant future, such as releasing a product without adequate testing. Risks are viewed as either manageable or unmanageable. A manageable risk is one you can live with, such as a minor requirement change. An unmanageable risk is impossible to accommodate, such as a huge turnover of core team members. Risk factors for this study are classified into eight categories namely.

Construction Risk

Design Risk

Environmental Risk

Financial Risk

Management Risk

Political Risk

Procurement Risk

Sub-Contractors Risk

Technology Risk.

Construction Risk:

Disputes between labours

Changing sequences in construction activity

Non availability of resources

Revision of design

Availability of camp for labours

Change in quantities of work

In Time work permissions for executing work Safety of workers

Stoppage of work due to Medical outbreak

Design Risk:

Late changes of design from client side

Will the level of details of design delivered by the owner affect over all construction time?

Improper specifications

Inadequate and incomplete design

Environmental Risk:

Impact of weather condition on completion of project

Pollution by construction waste

Procedure to facilitate construction waste clean-up or disposal

Financial Risk:

Delay from clients

Increment for staff benefits

Unprecedented price in raw materials

Fluctuations in Estimated finance than expected

Management Risk:

Documents and process directed as per agreement for mitigation of risk

Project team discussions on risk

Use of WBS and project milestones to help identify project risks

Time for planning

Loosing of critical staff at crucial point of construction

Documented process for identifying project risks

Political Risk:

Pressure from any political party

Local bodies (political/rowdies) compelling to use their resources

Union Issue

Procurement Risk:

Temporary demand of increase in price of materials

Specialized labour for fixation/Installation

there a chance of procurement team to know the sales chart of Is client?

Sub-Contractors Risk

Chances of sub-contractor walk out

Delay in work execution of sub-contractor

Revision of price

Technology Risk

Knowledge on equipments

Service for damaged equipments

Loss of data or software/hardware of computer

The construction companies need to include risk as an integral part of their project management. Decision making such as risk assessment in construction projects is very important in the construction management. The identification and assessment of project risk are the critical procedures for projecting success.


The pandemic and the nationwide lockdown that it triggered has dealt both demand and supply shocks to the economy, with wide ramifications on revenue collections and economic growth. It is likely to take quite some time for the consequent stress in the economy to be relieved and for growth to revive.

The crisis has prompted the Government to announce a series of monetary and fiscal relief packages designed to inject liquidity into the system and provide relief to stressed sectors. While these stimulus measures will provide relief to the affected people and some industries, the slowdown in economic activity is expected to significantly lower Indias GDP growth in FY 2020-21. Global supply chains have also been threatened by the pandemic. Governments around the world have been quick to respond to the crisis by implementing meaningful stimulus measures through a combination of fiscal and monetary easing, increased health spending and direct support to cover losses in incomes and revenues. Sustained efforts from Governments, focused on these measures could soften the economic impact of the Coronavirus. Your Companys operations were impacted due to the lock-down, however restarted its operations in a phased manner, as advised by the concerned authorities. There was no material impact on the financial results of the Company for the FY 19-20. However, during the current FY 20-21, to the extent to which COVID-19 pandemic will impact the Companys results will depend upon the future uncertain developments. Against this backdrop, the Company has undertaken a series of measures to mitigate the crisis, which includes securing the safety and livelihood of its staff and sub-contracted labour working at project sites, curtailing and reducing overheads at all operating levels, enhancing liquidity on its Balance Sheet through controlling working capital requirements through a mix of judicious cashflow planning and measured project execution.


With focus on responsible infrastructure development at Ramky Infra, CSR has evolved from being passive philanthropy to corporate community investments, which takes the form of a social partnership initiative creating value for stakeholders. Having said so, as per section 135 of The Companies Act 2013, Ramky Infra has formalised a CSR policy keeping Schedule VII in mind. The procedure for effective implementation of the policy has been made.


The companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These systems are designed to ensure that all the assets of the Company are safeguarded and protected against any loss and that all the transactions are properly authorized, recorded and reported. The Company has an internal audit function, which is empowered to examine the adequacy and compliance with policies, plans and statutory requirements. The internal audit function team comprises of well-qualified, experienced professionals who conduct regular audits across the Companys operations. The internal audit reports are placed before the Audit committee for consideration. The management duly considers and takes appropriate action on the recommendations made by the statutory auditors, internal auditors and the independent Audit Committee of the Board of Directors.


Human Resource Department has been partnering with the business in portraying the image of the organization. Revisiting HR basics and team building is the need of the day. Restructuring of the team and its modus operandi.

Despite economic turmoil and uncertain Industrial Scenario, refurbished HR Strategies adopted by our organization created buzz in the industry and well received by our employees. We have put faith in our resources and they are reciprocating with the same zeal through enhanced productivity.

All resources effectively adopted Job enlargement and enrichment, making it a lean and swift organization. We take pride in saying Ramky Infrastructure Limited is an Equal Opportunity Employer.

The Company continues to invest in talent development through a well-established academic interface programme, providing internships, inducting leadership pipeline through campus recruitments, in-house classroom-based training and OJTs.

Workforce well-being remained a priority and we continues to invest in various initiatives starting from comprehensive health insurance for its employees, life insurance and other standard associated welfare activities in the industry. HR compliance is approached from both reactive and proactive standpoints. HR continues to track the changes in employment and labour laws in the country for statutory compliance. Reactive compliance efforts focus on preventing, limiting or mitigating the risks and liabilities. Proactive compliance initiatives are considering measures such as changes in policies and procedures as well as changes in the legal environment for mitigating future risks, and enhancing the compliance awareness of our leaders. To inculcate the spirit of camaraderie, various events were conducted regularly where in employees & their families had an opportunity to understand the finer aspects of competition, recognitions and teamwork.

Open house meetings, skip level meetings and group interactions, enhanced the alignment in the Company, accelerating the thrust and drive to reach farther than others.


This communication contains statements that constitute ‘forward looking statements including, without limitation, statements relating to the implementation of strategic initiatives and other statements relating to our future business developments and economic performance.

While these forward looking statements represent the managements judgments and future expectations concerning the development of our business, a number of risks, uncertainties and other important factors could cause actual developments and results to differ materially from our expectations.

These factors include, but are not limited to general market, macroeconomic, governmental and regulatory trends, movements in currency exchange and interest rates, competitive pressures, technological developments, changes in the financial conditions of third parties dealing with us, legislative developments and other key factors that could adversely affect our business and financial performance. Ramky Infra undertakes no obligation to publicly revise any forward looking statements to reflect future events or circumstances.