Gayatri Projects has bagged a highway contract worth ₹1,255 crore from the National Highways Authority of India (NHAI) under the fourth phase of the National Highway Development Project (NHDP). The project is a joint venture with Russian construction company PTPS. The contract is going to be executed on an engineering, procurement and construction (EPC) basis. Speaking to BTVi , Gayatri Projects MD Sandeep Reddy says the company is only focusing on EPC contracts.

In the last 18 months, the company’s order book has more than doubled to over ₹10,000 crore on the back of a robust inflow of orders, most of which have been through the EPC model. As of now, 95 per cent of Gayatri’s order book is through EPCs. The company has completely refrained from bidding for BOT (build–operate–transfer) projects after having completed such projects. The company is hoping to maintain 14-15 per cent margin, mainly through its focus on EPC contracts. Excerpts:

Can you share the details of the NHAI project? How significant is this for you? What execution outlay are you anticipating?

This is part of the NHAI-EPC contract. It is a cash contract. It is a 156-kilometre stretch for four-laning with concrete pavement, from Angul to Sambalpur in Odisha.

We have submitted this as a joint venture where we will do 70 per cent of the work and the Russian company will do the rest. This is part of our current plan of focussing only on EPC contract. As of now, we have already won nearly ₹5,000 crore worth of order. With the new order, we have won almost ₹6,000 crore worth of order.

What is the updated figure of your order book?

We had an order book of around ₹6,800 crore on April 1, 2015. In FY16, we won new orders of ₹5,000 crore. This year, we have already won nearly ₹3,000 crore of orders.

Is a large chunk of it coming from the NHAI?

Yes.

How quickly is this order going to reflect on the balance sheet? What kind of margins are you looking at from this project?

Margins are about 14-15 per cent. If you look at our quarterly results, we have been achieving 14-15 per cent. This is on line with our strategy of now concentrating only on EPC contracts. As of now, 95 per cent of our order book is through EPC.

We have completely refrained from bidding for BOT projects. We have completed all our BOT projects. We are now going to concentrate only on EPC business. We hope to have a good growth for the next three years in terms of the top-line. We will start billing this project only may be after June or September of next year.

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