New orders to the tune of Rs 582 crore won by Ramky Infra signal a revival in order inflow after the sluggish season prevailing in the latter half of FY-11.

The stock of the company rose after the order announcement, ending with a gain of 6 per cent to close at Rs 299.

Improving order book

Total order book of the company stands at about Rs 11,580 crore, up just 10 per cent from the outstanding order book in June 2010.

Order book seems set to improve, however, with the company securing orders worth Rs 870 crore over the past four months.

Bulk of the new orders secured is also in the water and waste management segments where the company has considerable expertise.

Compared to the other segments such as roads in which the company operates, water and waste projects offer better margins.

Further, average order size over the past few months has shown an improvement to Rs 174 crore from the Rs 93 crore in FY-10. Order book currently stands at a comfortable 3.5 times consolidated FY-11 revenues.

Supporting developer operations

Ramky also has a clutch of projects as a developer, such as a joint venture for the four laning of Srinagar-Banihal highway section from NHAI.

Given the long gestation periods and investments required for such large-scale development projects, it is Ramky's construction contracts that will help sustain near-term revenue flows.

The company has four completed projects as a developer.

The construction segment clocked a revenue growth of 53 per cent in FY-11 while the development business grew 36 per cent.

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