Ahluwalia Contracts to enter core sector

To undertake project on BOT  and BOOT basis

MUMBAI: Ahluwalia Contracts India Ltd (ACIL), the Delhi-based civil construction and turnkey services company, is diversifying into infrastructure projects and would undertake Build-Operate-Transfer (BOT) and Build-Own-Operate-Transfer (BOOT) projects.

ACIL is negotiating contracts with companies in the eastern and the northern parts of the country and believes that these deals could push the order book at Rs 4,500 crore at the end of FY2009, sources said.

The company plans to incur capital expenditure of Rs 55 crore in FY2008 and Rs 110 crore in FY2009 for the timely execution of large projects. The funds for this would be raised through debt and internal accruals.

ACIL’s order book stood at Rs 2,800 crore at the end of Q2 of the current fiscal, executable in 36 months. Out of Rs 2,800 crore, the residential vertical contributes Rs 1,230 crore followed by retail at Rs 680 crore and commercial at Rs 510 crore. In terms of geography, the northern part contributes around 50% to the total order book. Eastern, western, and southern parts account for 20%, 15% and 15% respectively of the order book.

The infrastructure projects form only 3% of the current order book but ACIL expects that it has the potential to reach 20-25% in the next three years.

Talking to DNA Money, Vikaas Ahluwalia, director, Ahluwalia Contracts, said, “. We had bid for eight multilevel car parking projects, out of which we expect to win two to four projects in the coming quarters.”
The average sizes for these projects are in the range of Rs 125-160 crore. Hence, it could add Rs 250-500 crore to the order book.

ACIL also has some large orders in the pipeline such as the Jawaharlal Nehru stadium renovation project worth around Rs 400 crore.

Brokerage firm Sharekhan said in a note to clients on November 8 that ACIL’s average order size increased to around Rs 55-60 crore as compared with around Rs 20 crore a year back. The average order size increased primarily due to large projects such as Commonwealth games village project (worth Rs 688 crore) and construction of district courts (around Rs 150 crore).

Besides, the company also has Ready Mix Concrete (RMC) division, which operates 7 RMC plants.

It is expanding its capacity in the RMC business.