Infrastructure report

1.
June 10, 2015
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Infrastructure
Ready for a long ride!
Sector Update
Kunal Sheth
kunalsheth@plindia.com
+91‐22‐66322257
Samir Bendre
samirbendre@plindia.com
+91‐22‐66322256
Rating Summary
Rating CMP (Rs) TP (Rs)
Upside
(%)
ASBL BUY 166 188 13.3
SADE BUY 293 346 18.1
Source: Bloomberg, PL Research
Outlook for Indian Road sector has seen marked improvement over the last one
year due to increased focus from the present government, improvement in
ordering, tender pipeline and traffic growth. National Highways Authority (NHAI)
road awards in FY15 were at ~3000km (~2x FY14 awards); NHAI/Ministry of Road
Transport and Highways (MoRTH) is targeting ~9000km of awards in FY16.
Government has also increased allocation to road sector in the current budget (up
45% YoY). Visible pipeline, improved traffic and lower interest rate should augur
well for the sector dynamic over the next few years. We remain positive on Ashoka
Buildcon (ASBL) and Sadbhav Engineering (SADE), given their strong operating road
portfolio, robust balance sheet and proven execution capability. Amongst the EPC
players, we like KNR Construction (Not Rated) & MBL Infrastructure (Not Rated).
 Pace of ordering picking up: NHAI awarded ~3000km in FY15 which is
significantly higher than 1,165km worth of road projects awarded in FY13 and
1435kms in FY14. Further under the National Highway Development Programme
(NHDP), ~15000km of road projects are yet to be awarded over the next two
years. Of this, NHAI including MoRTH targets to award 9000km in FY16 and the
remaining 6000km in FY17.
 Project delay irritants like land acquisition and funding getting sorted out:
Increased budgetary allocation to road sector, increased cess on Petrol and
Diesel and borrowing by NHAI should be able to take care of funding
requirement to finance NHAI/MoRTH capex. Of the 9000km of road projects
which NHAI targets to award in FY16, 60% of the land is already acquired. For
the remaining 15000 km of road projects which are yet to be awarded, NHAI
estimates land requirement of 15,000 hectares, we believe, this will be acquired
over the next twenty four months.
 Traffic growth improving: Traffic grew by 5‐6% (the highest traffic growth in the
last 3‐4 years) for FY15 compared to a de‐growth of 1% in FY14. We expect this
momentum to continue over the next 2‐3 years on account of a GDP uptick,
higher industrial & mining activity.
 Policy support to kick start the Road sector: In order to revive the Road sector
and bring private sector back on board, CCEA has approved two policy initiatives
to get the sector moving: 1) CCEA has approved a comprehensive Exit policy
framework that now permits concessionaires/developers to divest 100% equity,
two years after completion of construction. Unlocking equity from this project
will help revive Private participation by making equity available from fresh
investments. 2) In order to revive projects stuck due to lack of funds, NHAI has
been authorized to provide funds to such projects from its overall
budgets/corpus as loans at a pre‐determined rate of return.

2.
June 10, 2015 2
Infrastructure
Exhibit 1: Key Comparison ‐ ASBL & Sadbhav Engineering (SADE)
ASBL SADE
Total Lane Kms 4307 3739
Total Projects 17 13
Operational/Under Construction 14/3 8/5
NHAI Projects 9 11
State Projects 8 2
Traffic Mix‐Commercial (%) ~75 ~80
Major state presence NH‐6 NH‐3/8
Delta of activity
Road assets located along Mining belts and
Industrial activities
Road assets located along the main freight
corridors of India with high industrial traffic
growth
Total Toll collection In FY15 ( Rs bn) 8.8 5.3
Order book end FY15( Rs bn) 31 81
EPC key segment exposure Road /T&D Road/Mining/Irrigation
Standalone D:E(x) 0.4 0.7
Source: Company Data, PL Research
Exhibit 1: ASBL ‐ SOTP
Method Value (Rs m) Per share value (Rs) Basis
EPC business PER 18,500 101 12x March'17 PAT
BOT business NPV 16,251 87 Cost of equity 14%
Total Value 34,751 188
Source: PL Research
Exhibit 2: SADE ‐ SOTP
Particulars Method Multiple Value (Rs m) Per Share Value
Construction business PER 17x March'17 32,873 194
BOT (80%) NPV Ke 14% FY16 NPV 25,771 152
Total 58,644 346
Source: PL Research

3.
June 10, 2015 3
Infrastructure
Exhibit 3: ASBL ‐ NPV Snapshot
Project
Total Value
(Rs m)
Ashoka's
Effective Stake
(%)
Ashoka's Value
(Rs m)
Per share
value
Sheri Nallah Bridge 223 100.00% 223 1
Ahmednagar Aurangabad 226 100.00% 226 1
Nashirabad ROB 480 100.00% 480 3
Pune‐Shirur 461 100.00% 461 3
Dewas Bypass 865 100.00% 865 5
6 Foot over bridges 58 100.00% 58 0
Katni Bypass 361 99.89% 361 2
Indore Edalabad 3,,187 99.74% 3,179 20
Wainganga Bridge 1,,539 50.00% 769 5
KSHIP – II 1,,783 31.10% 554 4
Belgaum Dharwad 1,780 61.00% 1,086 7
Sambalpur Baragarh 1,,845 61.00% 1,126 7
Dhankuni Kharagpur 3,,652 61.00% 2,228 14
Bhandara Road 340 31.00% 105 1
Durg Chattisgarh 2,,933 31.00% 909 6
Jaora‐Nayagaon 13,,451 24.88% 3,346 21
Pimpalgaon‐Nasik‐Gonde (4,437) 17.10% (759) (5)
Chennai ORR 3,333 31.00% 1,033 7
Total 27,585 16251 87
Source: Company Data, PL Research
Exhibit 4: SADE ‐ NPV Snapshot
Particulars Stake NVP SEL valuation Per share value
Mumbai Nashik 20 8,713 1,743 12
Dhule Maharashtra 27 4,558 1,231 8
Maharashtra Checkpost 90 8,602 7,742 52
Ahemdabad Ring road 100 3,785 3,785 25
Nagpur Seoni 100 135 135 1
Bijapur Hungud 77 4,558 3,510 23
Rohtak Panipat 100 3,902 3,902 26
Aurangabad Jalna 100 1,977 1,977 13
Hyderabad Yadgiri 100 1,531 1,531 10
Shreenathji Udaipur 100 2,829 2,829 19
Rajshamand Bhilwara 100 2,606 2,606 17
Rohtak Hisar Tollway Private Limited 100 1,269 1,269 8
Karnatka State Highway 50 (89) (45) 0
Total 44,376 32,214 215
Source: PL Research

4.
June 10, 2015 4
Infrastructure
Awarding on uptick after a lull
Exhibit 5: Trend in NHAI awards
0
1000
2000
3000
4000
5000
6000
7000
8000
FY01
FY02
FY03
FY04
FY05
FY06
FY07
FY08
FY09
FY10
FY11
FY12
FY13
FY14
FY15
(Kms)
Total Award
Source: Company Data, PL Research
NHAI awarded 3,000km worth of road projects in FY15; this is significantly higher
than 1,165km worth of road projects awarded in FY13 and 1435kms in FY14. Further,
under NHDP, around 15000km of road projects is expected to be awarded over the
next two years. Out of the 15,000km, NHAI including MoRTH plans to award 9000km
in FY16 (5.600Km by NHAI and 3,400 by MoRTH) and the remaining 6000km in FY17.
Out of 5600Km from NHAI, 2500km are by way of EPC tenders, 2300km under BOT
and 800km under the Hybrid model). NHAI expects a total outlay of Rs1.5trn for
these projects. Recently in the budget, government Increased allocation for roads by
Rs140bn (up 45% YoY) & Rs500bn additional support to road and other
infrastructure by converting excise on petrol and diesel in to cess.
Exhibit 6: Recent pipeline of tenders from NHAI
Pipeline of projects in next few months Length (km) Indicative project cost (Rs bn)
BOT 1,324 171
EPC 1,023 153
Source: NHAI, PL Research
Exhibit 7: Pending ordering in NHDP (As on end of FY15)
Program To be Awarded (in Km)
NHDP‐III 2,805
NHDP‐IV 9,892
NHDP‐V 2,944
SARDP‐NE 278
Total 15,919
Source: NHAI

5.
June 10, 2015 5
Infrastructure
Exhibit 8: Execution by NHAI
FY11 1,780
FY12 2,248
FY13 2,844
FY14 1,901
FY15 1,691
FY16E 2,300
Source: NHAI, PL Research

6.
June 10, 2015 6
Infrastructure
Exhibit 9: List of project awarded by NHAI in FY15
Package name Road In Kms
Awarded Cost
(Rs m)
Name of the contractor
Four laning of Aurangabad‐Yedishi section 190 18,753 M/s IRB Infrastructure Developer Ltd.
Jaisalmer‐Barmer section 131 2,988 GR Infra Projects Limited
Tirumayam to Manamadurai section 78 2,520 M/s Dilip Buildcon Limited
Jodhpur to Pachpadra 86 2,124 M/s Sadbhav Engineering Limited
Bagundi to Barmer 74 1,672 M/s G R Infraprojects Limited
Four laning of Kaithal – Rajasthan border section 166 13,930 M/S IRB Infra
Construction flyover at Bahalgarh ‐ 698 M/S Gawar Construction
2 Laning Chappra – Rewaghat – Muzaffarpur section 73 3,370 M/S Supreme Infrastructure India Ltd
Bikaner – Phalodi section to four lane 160 3,270 M/S IRCON
2 Laning of Thanjavur – Pudkottai section of 226 55 1,589 M/S Gayatri
2/4 Laning of Talchar ‐ Dubari‐Chandikhole section 132 8,580 M/s Corson Corivam Construction SA
Phalodi ‐Jaisalmer section of NH‐15 to two/four lane 160 4,279 M/s Corson Corivam Construction SA
Four laning of Patna ‐ Gaya ‐ Dhobi section of NH‐83 127 12,320 M/s IL&FS Engineering and Construction Company Ltd
2 laning of Karaikudi ‐ Ramanathapuram section of NH‐210 80 2,800 M/s Transstroy ( India) Ltd
2 laning of Sitarganj ‐ Tanakpur section of NH‐125 52 2,431 M/s H.G Infra Engineering (P) Ltd
4 Laning of Ludhiana – Talwandi Bhai section 6 378 M/S Ceigall India Limited
2 Laning of Jodhpur ‐ Pokaran section 139 2,650 M/s GR Infraprojects Ltd
2 Laning of Chas ‐ Ramgarh section 78 3,330 M/s Dilip Buildcon Ltd
2 Laning of Bijapur – Gulbarga – Homnabad section 220 5,230 M/S Larsen and Tubro Limited
2 Laning Barmer – Sanchor – Gujarat Border section 106 3,438 M/S Monte Carlo Limited
4 laning Varanasi bypass 17 2,611 M/S Apco Infratech Private Limited
Ambala –Kaithal Package 2 45 4,590 M/s Sadbhav Eng Ltd.
Hisar‐Dabwali Pkg‐1 57 5,490 M/s G.R Infra Projects Ltd.
Hisar‐Dabwali Pkg‐2 88 6,480 M/s G.R Infra Projects Ltd.
Nagapattinam‐Thanjavur 79 3,970 Madhucon Projects Ltd.
4 Lanning of Jabalpur Lakhnadone section 81 7,426 M/s L&T Ltd.
4 Lanning of Rewa Katni Jabalpur Pkg‐1 69 6,220 M/s L&T Ltd.
4 Lanning of Rewa Katni Jabalpur Pkg‐2 69 6,220 M/s L&T Ltd.
4 Lanning of Rewa Katni Jabalpur Pkg‐IV 68 6,630 M/s L&T Ltd.
4 Lanning of Shivpuri‐Guna Section of NH‐3 97 8,304 IRCON
4 Lanning of Hospet‐Chitradurga NH‐13 120 13,880 M/s Tril Roads Pvt. Ltd.
4 Lanning of Ghaghara Bridge to Varanasi Section 59 6,743 M/s Dilip Buildcon‐Varha Infra Ltd(JV)
Four Lanning of Parwanoo‐ Solan of NH‐22 39 7,488 M/s G.R Infra Projects Ltd.
Ambala‐ Kaitahal Pkg‐I 51 4,577 Indian
Kharar‐Kurali 14 2,072 Indian
Total 3,068 189,050
Source: NHAI

7.
June 10, 2015 7
Infrastructure
EPC has been the preferred route
EPC (Engineering Procurement Construction) has been the preferred route of award
over the last two years due to lack of interest in BOT projects owing to subdued
traffic growth and over‐leveraged balance sheet for most players. EPC orders
contributed ~75% of awards in FY15.
Exhibit 10: Mix of EPC/BOT
0
1000
2000
3000
4000
5000
6000
7000
8000
FY01 FY02 FY03 FY04 FY05 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15
BOT projects awarded (KM) EPC projects awarded (KM)
Source: NHAI, PL Research
BoT seeing some come back with improved traffic
While leveraged balance sheet and low traffic in the last few years had reduced
interest in BOT projects, higher traffic growth has brought back some interest in
BOT. During FY15, five BOT projects (850km) were successfully awarded. Players who
won BOT projects in FY15 were IRB, Essel Infra and TRIL.
Exhibit 11: BOT projects awarded recently
Project Length (Kms) Winning bidder
Chitradurga Hospet 219 TRIL
Bikaner Phalodi 160 Essel Infra
Delhi Panipat 79 Essel Infra
Aurangabad Yedeshi 190 IRB
Rajasthan Kaithal 210 IRB
Total 858
Source: NHAI, PL Research

8.
June 10, 2015 8
Infrastructure
Traffic growth outlook, trending up
Exhibit 12: Traffic growth trend
‐6.0
‐4.0
‐2.0
0.0
2.0
4.0
6.0
8.0
Q3FY14 Q4FY14 Q1FY15 Q2FY15 Q3FY15
(%)
Source: Company Data, PL Research
A recent CRISIL report highlighted that traffic had been slowing down over the last
few years. Growth slowed to about 3‐4% in 2012 and 2‐3% in 2013 and further to
~1% in 2014 compared to growth of 7‐8% in 2007‐11. However, over the last two
quarters, we have started to see improvement in traffic in the range of 5‐6%.
Generally, sensitivity of cargo traffic to GDP is 1.2% i.e. for every 1% increase in GDP,
cargo traffic improves by 1.2%.
Hybrid model to bring back private participation
Road transport and Highways ministry is working on new “hybrid PPP” model in
which the government will bear 40% of the construction cost and the developer will
invest the remaining 60%. The 'construction support' will be disbursed in five equal
instalments of 8% each. The timing of each such payment is linked to percentage of
project cost spent by the concessionaire. With low traffic growth and lack of interest
in PPP projects, the highways ministry began awarding projects on EPC mode, where
the government provided 100% funding. The new model is expected to revive the
PPP model.
Funding in place for lined‐up capex
Road sector in India is funded through budgetary allocation, cess, toll collections and
borrowings. In the Union Budget of FY16, the government has increased allocation
for roads by Rs140bn (up 45% YoY); an additional Rs500bn has been allocated to
road and other infrastructure by converting excise on petrol and diesel into cess.
Recently, the government has increased cess on petrol and diesel from Rs2 per litre
to Rs6 per litre. NHAI has toll/premium collection of ~Rs70bn per annum. The
Ministry of Finance (MoF) is targeting issue of tax free bonds of Rs450bn in FY16, of
which, Rs250bn‐Rs 300bn would be for NHAI and the remaining will be for IRFC.

9.
June 10, 2015 9
Infrastructure
Land – Large part already acquired
Over the past four years, NHAI has acquired 30,000 hectares of land. It has already
acquired about 60% of land required for around 9000km worth of road projects
targeted to be awarded in FY16.
Exhibit 13: Land acquired by NHAI
Particulars Hectares
FY15 (upto Dec14) 5,800
FY14 8,229
FY13 6,600
FY12 9,800
Source: NHAI
For the remaining 15000km of road projects which are yet to be awarded, NHAI
estimates land requirement of 15,000 hectares. This is expected to be acquired in
FY16 and FY17. Part of the required 15000 hectares that is yet to be acquired could
be public land, where compensation would be minimal. Additionally, out of the total
15000 km of road projects, around 40% are two‐lane road projects where the ROW
is already with NHAI and land requirement is largely for additional alignment.
NHAI will not award any road project unless it possesses 80% of land in case of BOT
projects and 90% of land in case of EPC projects.
Beyond FY17
India targets a total national highway network of 95,000km, of which, the current
NHDP programme entails 50,000km. In addition to the remaining 45000km of
national highways, there is a potential award of 15,000km for roads in border areas,
coastal areas and North East regions, which is under the ambit of Roads Ministry.

10.
June 10, 2015 10
Infrastructure
Policy support to kick‐start the sector
Exhibit 14: Key Policy Initiatives in Road sector over last few years
Source: Company Data, PL Research
In order to revive the Road sector and bring private sector back on board, CCEA has
approved two policy initiatives to get the sector moving:
Exit Policy: CCEA approved a comprehensive Exit policy framework that now permits
concessionaires/developers to divest 100% equity, two years after completion of
construction. It is relevant to note here that during the last few years, PPP projects
have not been able to attract bids; one of the primary reasons being lack of
availability of equity in the market among the qualified bidders. This would help
unlock equity from completed projects making it potentially available for investment
into new projects. This decision will also harmonize conditions uniformly across all
concessions signed prior to 2009 with the policy framework for post 2009 contracts
which permit divestment of equity up to 100%, two years after completion of
construction.
There are 80 such BOT projects awarded prior to 2009 that have been completed
and the locked‐in‐equity in these projects works out to approximately Rs45bn. Once
this is unlocked and is re‐invested in new projects, this could support 1500kms of
new highways on PPP mode, thus, help in reviving the response to BOT projects.
Classification of
road BOT projects,
loans secured
Forest land
environmental
clearance delinked
for road widening
projects
2013‐
14
80% LA before
project awarded
Premium
rescheduling for
stressed projects
Fast track
clearance: (i) States
for clear projects
upto 40acres of
forest land. (ii)
increased limit for
sand mining. (iii)
online filing and
clearance of ROB
and RUBS
2014‐
15 100% exit for pre‐
2009 awarded
projects
NHAI to infuse
funds into stuck
projects
2015‐
16

11.
June 10, 2015 11
Infrastructure
Fund infusion to salvage languishing projects: Out of the ongoing 240 projects,
some are languishing due to delays on account of land acquisition, want of statutory
clearances, local issues and shortage of construction materials among others. CCEA
approved a special intervention for the projects that are in the advanced stage of
completion but are stuck due to either lack of additional equity or lenders inability to
disburse further. NHAI has been authorized to provide funds to such projects from
within its overall budgets/corpus on a loan basis at a pre‐determined rate of return.
NHAI has been directed to develop a robust mechanism to determine eligibility of
the project as also the extent of funds required to complete projects in time‐bound
manner. It is expected that about 16 such projects languishing in various part of the
country where public is facing difficulty on account of incomplete works will benefit
from this decision. This will also add momentum to the overall growth of the
highways sector in India which is already on the path of revival.

12.
June 10, 2015 12
Infrastructure
Income Statement (Rs m)
Y/e March 2014 2015 2016E 2017E
Net Revenue 17,949 23,197 28,916 34,191
Raw Material Expenses 12,988 16,712 19,534 23,516
Gross Profit 4,961 6,485 9,382 10,675
Employee Cost — — — —
Other Expenses 1,015 1,375 1,517 1,794
EBITDA 3,945 5,110 7,865 8,881
Depr. & Amortization 1,389 1,517 2,468 2,725
Net Interest 1,090 2,523 4,344 4,503
Other Income 246 198 419 377
Profit before Tax 1,467 1,070 1,053 1,653
Total Tax 688 796 925 1,035
Profit after Tax 779 275 128 618
Ex‐Od items / Min. Int. (353) (540) (586) (599)
Adj. PAT 1,132 815 714 1,217
Avg. Shares O/S (m) 158.0 158.0 186.4 186.4
EPS (Rs.) 7.2 5.2 3.8 6.5
Cash Flow Abstract (Rs m)
Y/e March 2014 2015 2016E 2017E
C/F from Operations 4,115 21,211 14,205 25,079
C/F from Investing (10,184) (20,432) (15,491) (19,766)
C/F from Financing 6,497 10,487 5,262 2,853
Inc. / Dec. in Cash 428 11,265 3,976 8,166
Opening Cash 517 945 12,210 16,186
Closing Cash 945 12,210 16,186 24,352
FCFF 393 (94,111) 9,494 17,705
FCFE 6,889 (83,624) 9,786 20,558
Key Financial Metrics
Y/e March 2014 2015 2016E 2017E
Growth
Revenue (%) (3.1) 29.2 24.7 18.2
EBITDA (%) 6.1 29.5 53.9 12.9
PAT (%) 2.3 (28.0) (12.4) 70.4
EPS (%) 1.8 (28.0) (25.7) 70.4
Profitability
EBITDA Margin (%) 22.0 22.0 27.2 26.0
PAT Margin (%) 6.3 3.5 2.5 3.6
RoCE (%) 3.9 3.9 5.3 5.7
RoE (%) 9.8 6.3 4.5 6.4
Balance Sheet
Net Debt : Equity 2.4 2.2 1.4 1.0
Net Wrkng Cap. (days) 10 60 70 94
Valuation
PER (x) 23.2 32.2 43.3 25.4
P / B (x) 2.1 2.0 1.7 1.6
EV / EBITDA (x) 14.3 10.8 7.2 5.7
EV / Sales (x) 3.1 2.4 1.9 1.5
Earnings Quality
Eff. Tax Rate 46.9 74.3 87.8 62.6
Other Inc / PBT 16.7 18.5 39.8 22.8
Eff. Depr. Rate (%) 6.6 1.1 1.8 1.8
FCFE / PAT 608.6 (10,262.8) 1,370.4 1,689.3
Source: Company Data, PL Research.
Balance Sheet Abstract (Rs m)
Y/e March 2014 2015 2016E 2017E
Shareholder's Funds 12,628 13,159 18,508 19,389
Total Debt 31,032 41,519 41,811 44,663
Other Liabilities 4,645 5,185 5,771 6,370
Total Liabilities 48,306 59,863 66,090 70,423
Net Fixed Assets 119,871 138,786 151,809 168,850
Goodwill — — — —
Investments 2,847 2,847 2,847 2,847
Net Current Assets (74,433) (81,791) (88,587) (101,295)
Cash & Equivalents 945 12,449 16,455 24,776
Other Current Assets 11,499 15,199 17,044 20,588
Current Liabilities 86,877 109,438 122,086 146,658
Other Assets 21 21 21 21
Total Assets 48,306 59,863 66,089 70,422
Quarterly Financials (Rs m)
Y/e March Q2FY15 Q3FY15 Q4FY15 Q3FY15E
Net Revenue 4,314 4,556 8,030 4,556
EBITDA 935 1,054 1,713 1,054
% of revenue 21.7 23.1 21.3 23.1
Depr. & Amortization 369 376 356 376
Net Interest 516 795 944 795
Other Income 56 34 71 34
Profit before Tax 106 (83) 485 (83)
Total Tax 145 139 271 139
Profit after Tax 58 13 378 13
Adj. PAT 58 13 378 13
Source: Company Data, PL Research.
Ashoka Buildcon
BUY; CMP: Rs166; TP: Rs188

13.
June 10, 2015 13
Infrastructure
Income Statement (Rs m)
Y/e March 2014 2015 2016E 2017E
Net Revenue 23,581 29,702 35,044 44,293
Raw Material Expenses — — — —
Gross Profit 23,581 29,702 35,044 44,293
Employee Cost 602 974 877 1,093
Other Expenses 20,485 25,722 30,338 38,229
EBITDA 2,494 3,006 3,828 4,971
Depr. & Amortization 474 817 1,051 1,196
Net Interest 958 891 999 1,165
Other Income 142 164 175 193
Profit before Tax 1,205 1,462 1,953 2,802
Total Tax (242) 321 586 869
Profit after Tax 1,447 1,141 1,367 1,934
Ex‐Od items / Min. Int. (383) — — —
Adj. PAT 1,064 1,141 1,367 1,934
Avg. Shares O/S (m) 151.7 169.6 169.6 169.6
EPS (Rs.) 7.0 6.7 8.1 11.4
Cash Flow Abstract (Rs m)
Y/e March 2014 2015 2016E 2017E
C/F from Operations 1,355 (1,673) 3,233 2,342
C/F from Investing (1,979) (1,403) (1,800) (1,800)
C/F from Financing 1,054 2,683 (1,087) (753)
Inc. / Dec. in Cash 430 (393) 345 (211)
Opening Cash 218 762 351 697
Closing Cash 762 369 697 485
FCFF (1,755) (3,860) 934 (123)
FCFE 146 (3,110) 984 427
Key Financial Metrics
Y/e March 2014 2015 2016E 2017E
Growth
Revenue (%) 30.2 26.0 18.0 26.4
EBITDA (%) 60.1 20.5 27.4 29.8
PAT (%) 43.6 7.3 19.8 41.4
EPS (%) 42.9 (4.1) 19.8 41.4
Profitability
EBITDA Margin (%) 10.6 10.1 10.9 11.2
PAT Margin (%) 4.5 3.8 3.9 4.4
RoCE (%) 10.3 8.4 8.6 10.7
RoE (%) 11.9 9.8 9.6 12.3
Balance Sheet
Net Debt : Equity 0.8 0.7 0.6 0.6
Net Wrkng Cap. (days) — — — —
Valuation
PER (x) 41.8 43.5 36.3 25.7
P / B (x) 4.6 3.6 3.3 3.0
EV / EBITDA (x) 21.0 19.5 15.3 11.9
EV / Sales (x) 2.2 2.0 1.7 1.3
Earnings Quality
Eff. Tax Rate (20.1) 22.0 30.0 31.0
Other Inc / PBT 11.8 11.2 9.0 6.9
Eff. Depr. Rate (%) 6.5 9.5 10.6 10.7
FCFE / PAT 13.8 (272.6) 72.0 22.1
Source: Company Data, PL Research.
Balance Sheet Abstract (Rs m)
Y/e March 2014 2015 2016E 2017E
Shareholder's Funds 9,572 13,628 14,857 16,652
Total Debt 8,633 9,383 9,433 9,983
Other Liabilities 357 244 244 244
Total Liabilities 18,562 23,255 24,534 26,879
Net Fixed Assets 4,982 5,465 5,713 5,818
Goodwill — — — —
Investments 5,210 5,313 5,813 6,313
Net Current Assets 8,370 12,478 13,008 14,749
Cash & Equivalents 762 351 697 485
Other Current Assets 19,326 24,229 28,323 35,191
Current Liabilities 11,717 12,102 16,011 20,928
Other Assets — — — —
Total Assets 18,562 23,255 24,534 26,879
Quarterly Financials (Rs m)
Y/e March Q1FY15 Q2FY15 Q3FY15 Q4FY15
Net Revenue 6,855 5,946 7,223 9,674
EBITDA 715 596 776 957
% of revenue 10.4 10.0 10.7 9.9
Depr. & Amortization 220 223 226 148
Net Interest 221 221 199 250
Other Income 16 18 (27) 118
Profit before Tax 290 170 323 678
Total Tax 20 68 (57) 289
Profit after Tax 270 101 379 389
Adj. PAT 270 101 379 389
Source: Company Data, PL Research.
Sadbhav Engineering
BUY; CMP: Rs293; TP: Rs346

14.
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Infrastructure
Appendix
Exhibit 15: List of contracts terminated and re‐awarded
Stretch Length (km) When terminated
Chitradurga bypass 18 Apr‐2006
Ganjam to Icchapuram (OR‐VIII) 51 14‐01‐2004
Shikohabad to Etawah (GTRIP I‐B) 59 09‐06‐2004
Srikakulam to Champawati (AP‐1) 48 21‐12‐2004
Etawah Bypass 14 05‐04‐2005
Haveri ‐ Harihar 56 16.01.2007
Harihar ‐ Chitradurga 77 16.01.2007
Balasore –Bhadrak (OR‐III) 63 20‐12‐2007
Sunakhala – Ganjam (OR‐VII) 56 03‐04‐2008
Tumkur Bypass 13 May‐2008
Bridges Section (WB‐III) 2 Aug‐2008
Six laning of Panchi Gujran to Kamaspur (Sonepat)
(NS‐17/HR)
22 11.12.2004
Eight laning of Haryana / Delhi Border to Mukaraba
Chowk (NS‐18/DL)
13 11.12.2004
Kanniyakumari – Panagudi (NS‐32) 31 Jan‐2007
Pathankot to Bhogpur(NS‐38/PB) 40 Sep‐2008
Eight laning of Haryana / Delhi Border to Mukaraba
Chowk (NS‐18/DL)
13 13‐01‐2009
Wadner‐Devdhari(NS‐60/MH) 29 Mar‐2009
Kelapur‐Pimpalkhatti ( NS‐60) 22 May‐2010
Gundla Ponchampalli to Bowenpalli / (NS‐23) 23 Dec‐04 & Oct‐11
Lucknow – Kanpur (EW/3A) 16
Lucknow Bypass (EW‐15/UP) 23 22‐03‐2008
Haldia Port 53 26.04.07
Cochin Port 10 28‐05‐2007
Tuticorin Port 47 Nov‐2009
Chennai – Ennore Express way 10 24‐06‐08
Chennai – Ennore Express way 15 Sep‐2008
Barwa‐adda‐Panagarh 123 May‐2012
Source: NHAI

15.
June 10, 2015 15
Infrastructure
Exhibit 16: List of terminated contracts by NHAI
Stretch Length (km) When terminated
Deewapur to UP/Bihar Border(LMNHP‐9) 41 Nov‐13
2 Laning of Forbesganj‐Jogwani 9 Oct‐2013
Hospet – Chitradurga 120 Dec‐2013
Kannur ‐ Kuttipuram (Package ‐II) 82 Nov‐2013
Kannur ‐ Kuttipuram (Package ‐I) 83 Sep‐2013
Khagaria – Bakhtiyarpur 113 Jan‐2014
Gopalganj ‐ Chappra 92 Apr‐2014
Rampur ‐ Kathgodam 93 Apr‐2014
Cuttack ‐Angul 112 Jul‐2014
Vijayawada ‐ Machhlipatnam 65 Aug‐2104
Patna ‐ Buxar 125 Aug‐2014
Jowai – Assam /Meghalaya Border 102 Nov‐2014
Bhopal ‐ Sanchi 54 Jan‐2015
4‐Laning of Angul ‐ Sambalpur 153 Nov‐2013
Jabalpur to Lakhanadone 81 July‐2012
Meerut ‐ Bulandshahar 66 Sep‐2013
Lukcnow – Sultanpur 126 Oct‐2013
Raipur ‐ Bilaspur 127 Feb‐2104
Shivpuri –Dewas 330 May‐2014
Aligarh ‐ Kanpur 283 Sep‐2014
Chhapra – Rewaghat ‐ Muzzaffarpur 73 Nov‐2014
Anandapuram‐Visakapatnam‐Anakapalli 58 Dec‐2013
Six‐Laning of Gundugolanu Rajamundry 121 Dec‐2013
Source: NHAI

16.
June 10, 2015 16
Infrastructure
Exhibit 17: Foreclosed Contracts/LOA cancelled and withdrawn
Stretch Length (km) When terminated
Goa/KNT Border ‐ Panaji 69 ‐
Maharashtra/Goa border –Panaji‐Goa/KNT Border 139 ‐
Chethalai ‐ Ochira 84 ‐
4 Laning of Coimbatore‐Mettupalayam 54 Aug‐2013
4‐Laning of Solapur ‐ Bijapur 111 Dec‐2013
Kota – Jhalawar 88 Sep‐2013
Karnataka /Kerala Border ‐ Kannur 127 Jan‐2014
UP/Haryana Border‐Yamunanagar –Saha—Barwala‐Puchkula 107 Mar‐2014
Jabalpur‐Katni ‐Rewa 226 Jan‐2013
Bimitrapur ‐ ‐Barkate 86 Mar‐2014
Hospet –Bellary‐Karnataka /AP Border 95 Mar‐2014
Muhulia – Baharagora‐ Kharagpur 127 Sep‐2014
Jalgaon – Gujarat /Maharashtra Border 209 Sep‐2014
Amravati ‐ Jalgaon 275 Sep‐2014
2 laning of Gulabpur – Uniara 214 Nov‐2014
2 laning of Raipur – Jessa ‐ Khera 32 Nov‐2014
Aurangabad‐Barwa Adda 220 Nov‐2013
Agra – Etawah Bypass 125 May‐2014
Source: NHAI

17.
June 10, 2015 17
Infrastructure
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