G S Johar-Chairman, C & C Constructions

Impressive growth has been witnessed on back of strong traction in our business in Bihar and Afghanistan. An articulate blend of strong management capabilities, well qualified employees, state-of-the-art machinery and efficient raw material procurement has been instrumental in enabling the Company to prosper. All this has led to an overall good growth momentum.

 

In the next financial year we expect to bag more orders from the global markets on back of our tie up with Isolux-Corsan. This tie up has given us access to latest technologies which has helped us in reducing costs and improving the quality of the projects undertaken. Also we expect the pace of awarding projects by our government to increase unlike this year where the awarding process had slowed down on back of various bottlenecks. We currently have a order backlog of Rs 4,178. We have also in pipeline orders of over 2,000 crore. We have also put in qualifications of over 30,000 crore. We would be very satisfied if we could add 60 per cent to our order book. In terms of work done we would expect the growth of 50 per cent.

While our thrust areas remain on roads/ highways and the fast growing BOT project segments, we believe that there is also a lot of opportunity and potential for growth in our other emerging and promising businesses like buildings, railways, transmission and water & sanitation space. Going forward we expect these emerging businesses to reach significant scale. The government has awarded projects in excess of 5000 kms this financial year. By 2013 the government expects to reach its ambitious target of 20kms/day which translates to ~ 7000 km a year. This is a huge op¬portunity in front of us from which we expect to benefit.

 

Order book is Rs 4,178 crore as on 28th Feb 2011. 

We have signed MOU with Cinepolis for setting up and operating a multiplex cinema theatre in 67200 sqft We have also signed MOU with Future Value Retail Limited for running a Hyper market in name of Big Bazaar in 35000 sqft. Additionally 2.66 Lakh Sqft of office space, 3.45 Lakh Sqft of retail space and 1.3 Lakh Sqft of space for Hotel is planned. Till February 2011, we have sold 1.43 Lakh Sqft of office space, 0.52 Lakh Sqft of retail space.

We plan a capex of Rs 35-40 crore in this financial year and about Rs 60 crore in the next financial year. In this financial year we do not need any fund raising. As on dec 31st 2010 we have Rs 90 crore of cash and cash equivalents on our books so our capex requirement will be met internally.

Our tie up with Isolux-Corsan a leading infrastructure conglomerate of Spain will help us establish our presence in global markets. Isolux-Corsan is present across 22 countries and is present in almost all the verticals in the infrastructure space. This partnership will help us accelerate growth from diverse geographies such as Asia, Soviet Block (excluding Eastern European countries) and Africa. We have already partnered with Isolux-Corsan for a number of bids in Transmission and Road verticals. Over a period of time we have developed our expertise in operating in difficult terrain such as Afghanistan and we are among the top 5 road contractors in Afghanistan. We have also received repeat orders from international contractors like Louis Berger.

Our senior management has a vast experience across geographies and industries and has been with us for a while. Out of 2688 total employees that are with us 210 engineers, 906 technical and 727 other skilled personnel. In addition another 5,413 people including 331 engi¬neers, 1814 technical and 1488 other skilled personnel are employed with JVs. This demonstrates that we have sound HR practices and are able to attract and retain talent in the organization. 

Tell us about the risks and challenges lie ahead for the company.

In our global operations logistical challenges of equipment mobilization, international procurement and stable man power to be managed remain a challenge. Slowing down of government tenders for various infrastructure projects remains a concern. We operate in difficult ter¬rains like Bihar and Afghanistan which have inherent natural calamities and other challenges. Rising interest costs would put burden on our interest outgo.

The coming quarters look interesting with our increasing participation in more number of bids with our JV partners’. These bids should throw up opportunities which would help us maintain our growth trajectory. If you look at our margins of 20.1 per cent for Half year ending 31st December 2010, it has been the highest in the sector on account of our proven capabilities in undertaking challenging projects. The significant opportunities arising in the infrastructure space in India would benefit us which would help us drive growth at our topline and margin level. Also our partnering with Isolux-Corsan would help us establish our global presence and bid for projects internationally. We are committed to enhancing value for all our stakeholders by undertaking complex construction contracts which in turn would help us command higher margins and drive our topline.