September 12, 2014
To decongest the city, the Bangalore police are planning to set up traffic sensing mechanisms to monitor and better regulate movement of vehicles, police Commissioner M.N. Reddi said.
On Thursday, he told reporters that Bangalore has over 300 junctions. Setting up traffic sensing units at key junctions would help the traffic police to better manage vehicular movement. “We have a first class traffic management centre. However, we are still unable to assess the traffic flow. With signal optimisation, we can have green corridors or green waves to ease congestions.”
The traffic police would also ensure that lane discipline is adhered to by earmarking sections for slow and fast moving vehicles. He said that with paid parking systems, haphazard parking, especially in densely populated business centres, could be eliminated.
September 9, 2014
Construction to start by 2015
Minister for Public Works H.C. Mahadevappa has said survey work on the six-lane Bangalore-Mysore National Highway (NH 275) project will get going next week and construction is expected to begin by 2015.
Upgrading of the existing four-lane Bangalore-Mysore State highway to a six-lane at a cost of Rs. 3,000 crore was conceived owing to ever-increasing traffic density between the two cities. The project is expected to be completed in two years.
Mr. Mahadevappa said it will be a toll highway but will have a service road for the entire stretch. The fare will be determined based on distance travelled, he said.
The road will have flyovers at Bidadi and Srirangapatna and bypasses across Ramanagar, Channapatna and Mandya. There will be underpasses at 500-metre intervals through the Maddur stretch.
The cost of land acquisition for the project is pegged at Rs. 1,100 crore, construction at Rs. 1,600 crore and maintenance and utility at Rs. 300 crore. A total of Rs. 2.75 crore is being spent on the survey. The highway project work will be implemented under Design, Build, Finance, Operate & Transfer (DBFOT) basis on public-private partnership. The private player will maintain the road for a period of 18 years.
In all, the Union Ministry of Surface Transport has approved upgrading of 1,680 km of State Highway into National Highway in the State.
September 4, 2014
It envisages technology-driven management of traffic in city
Chief Minister Siddaramaiah will be launching the Mysore Traffic Improvement Project — MTRAC — at a programme in the city on Friday.
The MTRAC project was scheduled for inauguration on August 22, but was put off at the eleventh hour following the death of writer U.R. Ananthamurthy. Mr. Siddaramaiah will now launch the project at the Karnataka Police Academy’s new auditorium at 10 a.m. on Friday, according to a press release here.
The MTRAC, an ambitious technology-driven traffic management project, which will be implemented at a cost of Rs. 40 crore, seeks to adopt the latest technology to make transport more efficient.
Mysore, which has a population of about 12 lakh, has more than 6.5 lakh vehicles, said Police Commissioner M.A. Saleem. “We don’t want Mysore to go the Bangalore way,” he said.
Ensuring smooth flow of traffic has become a huge task and using technology to enhance management has become the need of the hour, he said.
The MTRAC framework includes setting up a Central Area Traffic Control System for junction improvements, interlinking of signals, street furniture and road marking in addition to introducing a Corridor Traffic Control System featuring Intelligent Transportation Systems, including signal progression and VMS.
July 30, 2014
Bangalore has at least 10 start-up companies that are helping commuters pool together to commute using technology to inform them who they can share their transport with and when. Some start-ups provide cabs, some others offer mobile phone applications to tell people when someone else has a seat avaliable in their vehicle.
However, they want more people to go online to increase the probability of finding another person commuting to the same place at the same time.
Four start-ups that have been offering these services in the city are Ridingo, Rideally, Urban Drive and MoveInSync.
Ridingo (wwww.ridingo.com), which has 7,000 registered users — with 200 to 300 logging in everyday, is targeted at office commuters. It fixes the cost of the trip and the driver earns Rs. 3 per km.
When asked about how safe it is for acquaintances to travel together, Vardhan Koshal, one of the founders, said there are enough details taken for the police to track down people, if required. Besides, it does not allow men to share women’s vehicles.
Mr. Koshal said the “aim is fill all empty seats in cars so that everyone travelling by is comfortable and secure.”
The second start-up, Rideally (www.rideally.com), is an open platform to connect people for sharing a taxi. It offers a free application for smartphones and targeted at those living in apartments, corporates, and college students. An average of 30 people each day use the application.
For safety, commuters can choose who they want to share their vehicle with: public, community or group, much like privacy levels in social media.
Hariprakash Agrawal, founder, Rideally, said the company would soon have its own cabs for hire as well.
Similarly, Urban Drive provides shared taxi services on a monthly subscription-basis for commuters. The company has a tie-up with three cab companies.
Jitin Gupta, one of the two founders, said it is targeted at companies that do not provide transport for its employees.
MoveInSync has patented a technology that manages transport fleet (pick and drop), tells passengers where the vehicle is, how long they will have to wait till it reaches them; and says it is safe for women. It allows the control room to track the vehicle, find the distance it has covered, and identify cabs with women travellers. The “auto clubbing” feature suggests which passengers could travel together. Commuters have a PIN-based authentication.
Deepesh Agarwal, founder, said 10,000 people are using 1,000 cabs in Bangalore with the help of the technology.
July 28, 2014
The 11-point directive by the police to compulsorily install Global Positioning System (GPS) devices and CCTV cameras, among other things, in schools has brought cheer and jeer from different quarters.
While companies offering the technology solutions are expecting good business, a section of the schools have expressed their displeasure.
Shashi Kumar D., general secretary, Karnataka Private Schools Joint Action Committee (an umbrella of State, ICSE, CBSE, and IB board schools in Karnataka) has written to Police Commissioner M.N. Reddi, urging him to call for a meeting of all stakeholders and review the guidelines. Taking exception to the fact that government schools have been left out of the purview of the directive, he said that it gives an impression that offences were happening only in private schools.
On the other hand, Bobbie Kalra, Chief Executive Officer, NorthStar, a company that works only with schools, said the sales of CCTV cameras witnessed an increase by at least 70 to 80 per cent in the last quarter, with the demand expected to increase further. He said cost-wise, the devices had to be made affordable for the masses.
“While the device is a one-time expenditure, maintenance is an important factor,” he said. D. Deekshith, MD, OSS GPS Tracking Solutions, said that with the stipulation, the demand was bound to increase.
Source: The Hindu
July 17, 2014
A new mobile app, Lets drive Along, aims to make carpooling safe and fun
Traffic snarls and Bangalore have become synonymous over the past few years, as more and more cars clog the city roads making the daily commute a stressful activity for millions across the city. Let’s Drive Along is an attempt to reduce city traffic and make the commute an easier experience. The mobile app provides a host of features that will make car pooling a safe activity.
Srinath S, who created this app, after quitting his IT job says, “The main reasons why people are not happy with the concept of carpooling is issues like the lack of flexible timing and security concerns. This app offers the option for users to pick timings that suits them best. As far as the security aspect is concerned, before accepting a request, a user can see the profile of those interested in the carpool.
“This public profile will have information about the place where the person stays, the company he works for and his phone number. This ensures that you do not need to share a ride with a complete stranger. The app allows you to create lists of potential car pool mates. You are under no obligation to carpool on a daily basis.”
Srinath adds, “You cannot wish away all cars from the city roads. Two cars take up as much space as a bus that transports 50 people. I want to ensure that more people can carpool and travel together. It will bring down travel expenses and ensure that the traffic snarls are reduced considerably.”
Srinath says, “We work on a points system and do not have a monetary aspect. We are open to anyone who owns a car and wants to commute to any location in the city. Points are used and given based on the number of trips undertaken by the commuter. For example, you will gain more points if you drive more people and lose points if you are not driving.”
He adds, “You can pick the days you want to carpool. The response has been fairly encouraging and we are getting more and more hits on a daily basis.
“The police and a number of civic organisations are also helping us. We hope to get more people spread across the city, so that the network covers the entire city.”
March 28, 2013
IRB Infra bags order for 4-laning road project, stock gains
Shares of IRB Infrastructure Developers gained more than 2 percent on Tuesday after the company’s subsidiary IRB Westcoast Tollway (special purpose vehicle) has executed concession agreement with NHAI for the road project.
The project includes construction of four laning of Goa/Karnataka border to Kundapur section of NH-17 in the State of Karnataka on design, build, finance, operate and transfer (toll) basis.
“Estimated cost of the project is approximately Rs 2,600 crore and the construction is to be completed within 910 days from the appointed date,” the company said in a release sent to exchanges.
The SPV will get tolling rights on NH-17 upon completion of construction. The grant sought by the SPV from NHAI is Rs 536.22 crore.
At 14:09 hours IST, shares went up 0.72 percent to Rs 112.30 on Bombay Stock Exchange.
Market capitalisation of the company currently stands at Rs 3,732.45 crore.
February 28, 2008
There is no proposal of two-laning of all single-lane NHs across the country on BOT basis, which are not covered under approved phases of NHDP. However, NHDP-Phase-IV, involving upgradation of NHs to two-lane standards with paved shoulders primarily on BOT basis, is yet to be approved by the Government.
The Eleventh Five Year Plan (2007-12) endorsed by the National Development Council (NDC) during its meeting held on 19.12.2007 recommended that the targets for stretches other than NHDP have to be prioritised according to their importance to the national economy so that the available resources are not spread thinly among competing projects. The major targets for non-NHDP components include:
i. Accelerated efforts to bring NHs network to a minimum of two-lane standard within the next ten years and four-laning small segments of non-NHDP stretches.
ii. Removing existing deficiencies, like inadequate capacity, insufficient pavement thickness, etc. in the road network by strengthening the National Highway network/improving riding quality.
The condition of the National Highways (NHs) is monitored on regular basis. Further, the development and maintenance of NHs is a continuous process to keep them in traffic worthy conditions and are taken up as per the availability of funds, traffic intensity and inter-se priority.
This information was given by the Minister of State for Shipping, Road Transport and Highways, Shri K.H. Muniyappa in a written reply in the Rajya Sabha today.
February 18, 2008
Mega investments in infrastructure and the recent market correction offers an exciting investment opportunity in construction stocks.
The robust GDP growth rate experienced by the country in the last few years is indeed commendable and was aided by investment in infrastructure. To sustain growth rates, it is imperative for India to make higher investments towards setting up world-class infrastructure. As per the planning commission estimates, investments in infrastructure is set to go up by a whopping 130 per cent to $520 billion for the eleventh Five Year Plan (FY 2008-12) as against the $226 billion made during the tenth plan (FY 2003-2007).
Construction companies will be among the first beneficiaries of these investments and will deliver good and sustainable long-term growth.
Since the investment plans for each of the sub-segments in infrastructure space varies, based on priorities, there is reason to believe that not all the segments or companies will grow at all times. For instance, regional players or less diversified ones may experience volatility in revenues. For companies, faster project execution capabilities and access to key construction machinery (equipment) are equally critical, which in turn will determine the growth rates and profitability margins, respectively for any company. For example some companies are looking at purchasing their own equipment to tackle rising hiring costs and protect margins.
Thankfully, despite issues, the huge opportunity dwarfs concerns. Says Satish Ramanathan, head equities, Sundaram BNP Paribas, “While the future is promising, earnings could be volatile. Choose companies on valuations, order book and services portfolio.”
Last, but not the least, the recent correction in stock markets provides an opportunity to buy good companies in the space at reasonable valuations. Among many stocks, we have picked 10 stocks—four large caps (Read: Bigger the better) and six mid-caps, which are likely to emerge as key beneficiaries of the ongoing investments in the infrastructure sector. Bigger companies are well-established, diversified and less risky. Investors with low risk appetite can consider them. The smaller ones are efficiently managed and are on the growth path with good earnings visibility. Notably, they may also grow faster, given the size of the opportunity and their individual strengths. But, small size also means that there is an element of risk and hence, investors need to review them on a quarterly basis and look at the flow of new business and financial performance.
|ON THE HIGHWAY|
Era Infra Engineering
Era Infra Engineering, which was earlier into the construction of industrial and commercial space, has diversified into verticals such as railways, roads and highways, airport, urban infrastructure and oil and gas. The company now commands a sizeable order book of Rs 4,100 crore, which is thrice its FY08 estimated revenue.
The company is also developing commercial and residential buildings on its 500 acre land in and around Delhi and Jaipur. Though some of these projects will only be completed by FY10 and FY11, four of them will be completed in FY09 thus providing significant revenue growth.
Besides, the company is also investing about Rs 200 crore in growing the building structure segment. Building structures, which includes the construction of metal structures used at public and private places, is a high growth and high margin business accounting for 21-22 per cent operating margins. The company is currently having total capacity of 45,000 tonne per year of structure, which will be expanded to 185,000 tonne per annum by September 2008. The contribution from new capacity will reflect partially in FY09 and fully by FY10. The expanded capacity at current realisation of Rs 58,000 per tonne can get additional revenue of Rs 750-850 crore per year, assuming 70-80 per cent capacity utilisation.
Additionally, the company is also investing in plant and equipment to scale up its in-house capabilities; currently, 75 per cent of its equipment requirement is met in-house (gross assets at Rs 500 crore). The company will further spend about Rs 200-250 crore over the next year towards purchase of equipment. This will help cut costs and generate additional revenues by way of renting out to third parties.
That apart, Era also plans to increase its Ready Mix Concrete (RMC) capacity 10-fold by installing about 50 new RMC plants over the next 2-3 years, at an estimated cost of Rs 350-400 crore. About 90 per cent of the new RMC production will be sold to third parties. Expect this business to contribute a large chunk to revenues.
Given its in-house equipment and RMC facilities, Era enjoys healthy operating margins of about 20 per cent and RoNW (return on net-worth) of 30 per cent, among the best in the industry. The company’s core business is growing at robust pace, which along with the strong order book and investments will drive growth.
Sadbhav Engineering, with a focus on the road segment, would be a key beneficiary of the ongoing investments in this segment. Of the company’s current order book of Rs 2,300 crore, road projects account for over 70 per cent, including 32 per cent from BOT projects. Enhanced focus on BOT projects has seen the company win four BOT road projects in consortium with other players over the last six months; Sadhbav’s equity contribution is pegged at Rs 92 crore. Going forward, the BOT projects are expected to contribute significantly to revenues as the company has achieved financial closure of Aurangabad-Jalna and Nagpur-Shinoi project during Q3FY08. It expects the Mumbai-Nasik expressway project to achieve closure by December 2008.
From Q4FY08 onwards, its projects in the relatively higher margin mining segment (9 per cent net margin) would be a positive trigger, and will help in improving its bottom line. The revenue will accrue from its ongoing project with GHCL and the recent Rs 245.24 crore order from the Northern Coalfields. Sadbhav Engineering currently has 15 per cent of its current order book from mining. However, the mix is expected to go up as domestic companies are allotted more mines and thus, reflects huge potential for excavation work.
Considering its current order book, which is over three times its FY08 estimated revenue, the company is expected to maintain revenue growth of over 50 per cent for the next two years. Also, with the increasing share of mining and the captive resources, the operating margins are expected to improve from 11.9 per cent in the FY07 to 12.5 per cent in FY08 and 13 per cent in FY09. The expansion in margins will also lead to the higher earnings growth. While these positives are partly reflecting in the higher valuations, the stock has good potential.
Pratibha Industries is emerging from being a small player handling projects with an average size of Rs 10-20 crore to a bigger player. The most recent order bagged by the company is as big as Rs 300 crore. The company, which was primarily into the water projects (about 70 per cent), has diversified into other construction segments such as industrial projects, roads, urban infrastructure, airports, railways, pipeline and tunneling. The company has a strong focus and expertise in handling water-related projects, accounting for 60 per cent of its total order book.
Further, to grab the growing opportunities in the water segment, micro tunneling and piping projects, the company has formed a JV with Ostu Stettin of Austria, the world’s third largest tunneling company. It will help getting complex projects involving tunneling for laying pipes in high density urban areas for underground tunneling.
Besides, the company is also integrating backwards into manufacturing of SAW spiral pipes, with a capacity of 90,000 tonnes per annum. These pipes will be used for captive consumption as well as commercial sales to other companies for use in water transmission, oil and gas, sewerage and other industrial usage.
Within construction, the company has also diversified into some of the high potential segments, having undertaken (either independently or jointly) construction of complexes, buildings, airports and roads.
A strong order book of almost 4.5 times its FY08 estimated revenue and better outlook for urban infrastructure and water-related projects, indicates a robust future for the company. Besides, growth would be driven by the increasing revenue share of pipe manufacturing business in FY09. According to estimates, the SAW pipe segment alone can add about Rs 240 crore of revenue in FY09 at 60 per cent capacity. Overall, the stock is attractive from a long-term perspective.
Ahluwalia Contracts, primarily into construction of residential and commercial projects, is now diversifying into the urban infrastructure space. Although urban infrastructure still contributes just 3 per cent of its revenues, the company plans to increase its share to 20-25 per cent over the next three years.
On these lines, the company will bid for select BOT projects, especially multi-level car parking and bus terminus. The company has already been awarded a BOT project in Rajasthan for constructing a bus terminus, which also includes a commercial complex, wherein the targeted IRR (internal rate of return) is a sound 20 per cent. There is huge opportunity in the multi-level car parking segment, as over 30 projects are likely to be awarded in Delhi alone.
The company being an established player in the National Capital Region (NCR) is expected to gain from the residential and commercial projects consequent to the 2010 Commonwealth Games, to be held in Delhi and also the all round infrastructural development in the NCR region. It has already won some of these projects, including the recently bagged Rs 688 crore Commonwealth Games 2010 village residential project.
Considering its growth plans and projects in hand, the company is incurring a capital expenditure of around Rs 55 crore in FY08 and Rs 110 crore in FY09. This will also include the expansion of its RMC capacity from 210 cubic meter per hour currently to 300 cubic meter per hour in FY09. The RMC division, which contributed over 18 per cent to revenues in FY07 (Rs 81.40 crore), should see its revenues grow at a healthy pace over the next two years.
The healthy order book (3.24 times of FY08 estimated revenues) provides earnings visibility over next two years. Over the long-term, growth will be aided by the company’s diversification.
North East and eastern India are considered to be underdeveloped. Investments are required towards construction of roads, ports, power and other infrastructure facilities. The Centre has already indicated that it intends to spend Rs 50,000 crore towards construction of roads and another Rs 2,000 crore for rail connectivity in the North-East over the next five years.
Tantia, which generates about 96 per cent of its revenue from the eastern and north eastern region by undertaking roads and railway projects, will be the key beneficiary.
To further capitalise on this, the company is foraying into other segments of infrastructure and BOT projects. Its relatively smaller size and limited presence is reflecting in the lower valuation it enjoys vis-à-vis its peers, which should hopefully correct as the market gains confidence in the company. What is currently playing in its favour are opportunities and relatively less competition in the North East.
Considering the industry outlook and healthy order book to be executed over the next 30 months, the company may maintain revenue growth of over 50 per cent in the next two years.
In a recent development, Gayatri Projects signed an MoU with DLF to jointly undertake construction of road projects on BOT basis. The new entity will leverage the capabilities of the two companies and, is expected to develop projects worth over Rs 1,000 crore every year. The tie-up with DLF is also expected to provide Gayatri Projects an entry into the real estate business; it would be developing properties along with DLF. Gayatri Projects is a focused player in the construction of roads and irrigation segment, which account for about 98 per cent of its order book. The company is now venturing into urban infrastructure and the water treatment segments, which will not only help diversify revenue streams but also improve margins; these are already high at over 15 per cent compared with the industry average. That’s because, the company owns nearly 100 per cent of the project related equipments.
Apart from constructing infrastructure, like other companies, the company is looking at capitalising on the growing opportunities in the BOT segment. It currently has five BOT road projects, which have already achieved financial closure. Of this, revenue from three projects is expected to start flowing from March 2010. Analysts value the BOT projects at Rs 120-170 per share, based on the discounted cash flow method. The BOT projects will provide a sustainable or steady cash flow in the long run and help in improving its profitability on the back of higher margins.
Given the high opportunities in the infrastructure sector and diversification into other geographies and segments, the cash contract (non-BOT) business will continue to grow at a robust rate, over the longer term. For the next two years though, earnings will grow on a sustainable basis, backed by the strong order book of Rs 3,400 crore (almost 4.5 times its FY08 estimated revenue) executable over the next 30 months. At current price levels, the stock is trading at a relatively lower valuation, compared with its peers and, is capable of delivering good returns.
Bigger the better
Bigger companies score heavily on size, services portfolio, strong execution capabilities and have a proven track record, all of which provide great comfort and hence justify premium valuations.
IVRCL Infrastructures & Projects
The increasing allocation towards water-related projects augurs well for IVRCL, which generates 57 per cent of its revenue from it. Besides, IVRCL is also present in other growing segments such as roads, building & structures and power. Its order book of Rs 11,000 crore provides strong revenue visibility. Analyst value the company at Rs 550-650 per share on a sum-of-parts valuation of its different businesses and investments in subsidiaries like Hindustan Dorr Oliver and IVR Prime.
Hindustan Construction Company
A dominant player in transport segment, Hindustan Construction is now focusing more on profitable segments such as water and power. Of its order book of Rs 9,050 crore, power projects accounts for 44 per cent and water projects 22 per cent. This diversification will not only help it grow faster but also improve margins. Long-term growth will be aided by improving revenue mix, strong order book and its real estate business (12,500 acre Lavasa project, valued at Rs 60-100 per share. On a sum-of-parts basis, analysts value its share between Rs 210-260.
Nagarjuna Construction has been growing at 58 per cent annually over the last four years and is expected to grow at about 40-45 per cent during FY08-10. The growth will be driven by robust order book coupled with expansion of volumes and margins, led by diversification into segments like metal, oil & gas and real estate development. Nagarjuna is investing in BOT projects; has five road projects, two hydro power and two sea port projects. Its businesses are valued at Rs 315-395 per share.
After acquiring Singapore-based Sembawang in FY07, Punj Lloyd tapped the growing global energy market with extended services portfolio. In the domestic market, it has forayed into onshore drilling, real estate and ship building business with 25.1 per cent stake in Pipavav Shipyard. Its consolidated order book of Rs 18,500 crore, provides reasonable comfort. Going forward, net profit is expected to grow faster on the back of turnaround of Sembawang; consolidated operating margins are expected to improve to 10 per cent by FY09 (8 per cent in FY07).
Source: Jitendra Kumar Gupta : business-standard.com
December 6, 2007
Hyderabad-based multi-disciplinary engineering and construction player, Navayuga Engineering Company, has bagged a Rs 710 crore project from the National Highway Authority of India (NHAI).
The contract envisages designing, construction, financing and maintenance of an access-controlled highway project between the Bangalore and Nelamangala section on NH-4 on a build-operate-transfer (BOT) basis in Karnataka.
Debt syndication of Rs 540 crore has been done by
Bhubaneswar-based SRB Consultancy Private Limited from a consortium of banks.
The six-lane highway project, total length of which is 19.5 kilometres with elevated highway for 4.5 kilometres, terminates at Nelamangala. The scope of the work also includes underpasses and service roads for the entire length on both sides of the highway.
According to a company press release, revenues generated from the proposed tolling will accrue to an SPV (special purpose vehicle) formed for implementing the project.
The concession period of the project is 20 years, including the construction period of two years. The project is expected to be completed by the end of 2009, it added.