ARSS Infrastructure Projects Ltd is one of the fastest growing construction companies of India, focusing on infrastructure construction segment including highways, buildings and railways. Incorporated in 17th May 2000 by a group of professionals, it has completed 80 projects across India, with aggregate contract value of over Rs.7000 million, for various clients all over India.
Shareholding Pattern: The promoters hold 18.86% while the general public 81.08% of the shares of the company. The corporate bodies, own 21.11% of the shares of the company. Among the general category, SREI Equipments Finance Private Limited, holds 1.06% of the shares of the company.
Triggers:
- The Company is presently concentrating on major projects and abandoning small and non remunerative projects. Conducive political environment and stable government would be helpful for the industry to revive and gain momentum.
- The Company has an order book of more than Rs.2000 core in hand. The company is one of the major player in infrastructure sector in Eastern India and is expected to be a major beneficiary of the current set of the REFORMS undertaken by the NDA government.
- During the financial year FY14, the turnover of the Company has gone up to Rs.901.42 Cr from Rs.770.98 Crores in the previous financial year with a profit margin of Rs.1.67 Crores as against a loss of Rs.64.59 Crores in the previous year. The financial result of FY14 were marginally better due to strict adherence to cost cutting, abandonment of loss making projects and proper utilization of resources. Moreover, the company achieved turnaround in business even though the infrastructure industry all over India is passing through a very tough phase. Now with favourable government policies and NDA Government's thrust on the infrastructural development, the management is hopeful of better performance in FY15.
- The Company has an order book of more than Rs.2000 Crore, which includes the following major works:
a) Supply and installation of track (excluding supply of rails) Signaling and overhead equipment (OHE) & associated equipment for 25 KV AC traction, in connection with doubling of railway line between Barang - Rajatgarh (25 KM) Cuttack Barang (12KM) and 3rd line between Barabg Khurda Road (35KM) in the State of Orissa, India with a contract value of Rs.210.69 crores.
b) Construction of new 2 lane Highway from Km 38.00 to Km 71.00 (Length=33 Km.) in Mizoram in Phase “A” of SARDP-NE (Package-II), having a contract value of Rs.190.18 crores.
c) Balance work of construction of Roadbed including Minor and Major Bridges, facilities and General Electrification for doubling of Railway line between Barang-Rajatgarh (excluding Ghantikal-Naraj Section), Cuttack- Barang and 3rd line between Barang- Bhubaneswar in the State of Orissa, having a contract value of Rs.158.47 crores.
d) Widening to 2-lane and improvement in km 0.00 to 102.9 of Paralakhumundi -R. Udayagiri-Mohana Road (S.H.-34) under LWE Scheme, with a contract value of Rs.153.91 crores.
e) Construction of BRTS Corridor and development of road Contract for Package No. IIB: Sanganer Airport to 22Godam Via Rambagh crossing including Elevated Road at Durgapura (10.50 Km). (NCSL) with a contract value of Rs.130.00 crores.
f) Construction of earthwork, bridges, supply of P-way material, supply of ballast and P-way linking for proposed private railway siding taking off from Chacher railway station to in plany yard and including inplant yard of NTPC Mauda (but excluding works within railway boundary and excluding rail over rail bridge) Dist Nagpur (M.S.) with a contract value of Rs.114.49 crores.
g) Improvement of existing intermediate lane of NH-44 Rathachera - Chauraibari section to two lane with paved shoulder from Km 230/200 to Km 247/000, Km 260/109 to 261/761 & Km 271/00 to 284/053 (Aggregating to = 30.279 Km) under SARDP-NE in Assam under Silchar NH-Division in State of Assam with a contract value of Rs.104.04 crores.
h) Earthwork in formation (excluding Blanket), minor bridges between Km 19.000 to Km. 47.000 and 3 nos. of Steelgirder bridges, 8 no.s of Road Over Bridges between Km 19.000 to Km 67.000 in connection with Angul-Sukinda new railway BG line in the state of Odisha, India. With contract value of Rs.144.00 crores.
i) Contract Package 3: “BOLANGIR (Excl) - TITLAGARH (Incl) section (63.193 Kms) part of SAMBALPUR-TITLAGARH Doubling in SAMBALPUR Division of East Coast Railway in the states of ORISSA, India with a contract value of Rs.106.52 crores.
j) Widening & Strengthening of Parvatipur - Laxmipur road (SH-51) from 12/600 to 42/830 Km, 44/280 to 53/900 Km, 54/900 to 59/200 Km and 65/180 to 68/380 Km on EPC mode with a contract value of Rs.96.50 crores. - The Company is well on its course to meet its growth targets despite increase competition. Effective business strategies have allowed the Company executing projects in a timely manner and economies on critical resources though joint venture in large projects. The foray into high potential business of railways, roads and bridges has been successful during the year FY14 and boosted the order in flow. The Company is strengthening its manpower for execution of high value projects and adding assets for development of infrastructures to complete all contracts in time.
- The Indian Infrastructure sector is poised for growth with the present political machinery taking charge in New Delhi. Moreover, the Company does not have any accumulated losses at the end of the financial year FY14 nor has it incurred any cash losses in the financial year H1FY15.
ARSS Infrastructure Projects Ltd, also came out with decent set of numbers for the Q2FY15. The total income of the company for Q2FY15 came out to be Rs.165.16 Cr as against Rs.187.85 Cr in Q2FY14. The net profit of the company came out to be Rs.2.23 Cr as against a net loss of Rs.16.17 Cr in the same period previous year. This gives a basic EPS of Rs.1.50 as against a negative EPS of 10.90 in the corresponding period previous year. For the whole year, FY15 the company is likely to garner an EPS of Rs.6.
Conclusion: The company is a major player in the Indian Railways Sector and is expected to be a major beneficiary of the current set of the REFORMS undertaken by the NDA government. The book value of the shares of the company is Rs.239.76, while the market cap is only Rs.68.28 Cr. The P/E of the company is 1.58, against the industry P/E of 27.69. The traders can buy the scrip of the company at the CMP of Rs.44, for a short term target of Rs.53.