NCC to induct partners for Maharashtra smart meter SPVs, says official
Informist, Friday, Mar 1, 2024
--NCC: Looking for equity partner for Maharashtra smart meter SPVs
--NCC official: On track to meet 20% YoY revenue growth aim FY24
--NCC: On track to meet 260-bln-rupee fresh orders accrual aim FY24
--NCC official: Total order book at 589 bln rupees as on Feb end
--NCC: Aim FY24 standalone net debt at around 13-15 bln rupees
--NCC official: Debt at healthy level, in line with order book size
By Narayana Krishna
HYDERABAD - Infrastructure developer and construction major NCC Ltd plans to induct an equity partner for two of its smart meter projects to be incorporated through special purpose vehicles (SPVs), and the company is likely to finalise it in the next couple of quarters, Neerad Sharma, the company's head of strategy and spokesperson told Informist.
He said NCC is looking to rope in equity partners for two of its smart meter projects in Maharashtra, executed through special purpose vehicles. The company is in talks with potential candidates and may finalise the partners in the next couple of months, he said.
In August, NCC bagged three smart meter projects--two in Maharashtra and one in Bihar--worth a total of around 80.8 bln rupees. While the company wants to execute the Bihar order on its own, it is looking for an equity partner for the Maharashtra projects, which is worth around 57.6 bln rupees. The smart meter contracts in Maharashtra are for two zones – one for Nashik and Jalgaon for installation of 2.9 mln smart meters, and the second for the Latur, Nanded and Aurangabad zone for 2.8 mln meters. NCC has to install the smart meters at customer locations within 27 months, besides operation and maintenance of these meters for 10 years.
Sharma said that the company has already started the work like customer surveys and setting up infrastructure for the projects, as it involves a lot of field execution.
MEETING FY24 AIM
Sharma said the company is on track to meet NCC's revenue growth guidance as well as its fresh order book accruals target, for 2023-24 (Apr-Mar). NCC guided a 20% year-on-year revenue growth for the current financial year and had set a fresh order accruals aim of 260 bln rupees.
For 2022-23, the company's standalone revenue was 133.5 bln rupees and net profit was 5.7 bln rupees. For the nine months ended December, the company reported a revenue of 128.7 bln rupees, up 37.9% on year and a net profit of 4.4 bln rupees, up 13.4% on year.
As of February end, the company reported fresh order accruals of 227 bln rupees, while its total order book was at 589 bln rupees, Sharma said.
Sharma said the company has a decent pipeline of orders worth over 30 bln rupees at present, which would help it surpass the fresh order accruals' aim for the current fiscal. NCC undertakes construction of buildings, irrigation, transportation, electrical, mining, real estate and railways.
He said the company is also on track to meet its margin guidance for the current financial year ending March. NCC guided its earnings before interest, tax, depreciation and amortisation or EBITDA margin for the current fiscal at over 10%. For 2022-23, the company's EBITDA margins were at 10.1%. Margins were aided by better execution and cost management, he said. The company has been maintaining its EBITDA margin at around 10% for the last three years.
Sharma said the company is also working to maintain its debt at healthy levels. As on Dec 31, NCC's standalone net debt was at 13.7 bln rupees. The company is aiming to maintain the debt in the 13-15 bln rupees range, in line with the order book size and working capital requirements in execution, he said. For Apr-Dec, NCC's finance costs were up 19.6% on year at 4.4 bln rupees. End
