TRACK CONSTRUCTION & INFRASTRUCTURE
December 16, 2015 InfraTrack
Nitin Arora Research Analyst [email protected] +91 22 66242491
Kushan Parikh Research Associate [email protected] +91 22 66121431
India Equity Research | Construction & Infrastructure © December 16, 2015 Sector Update Emkay
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Adani Ports ACCUMULATE CalloutKey trends observed during the month with respect to project tenders, awards, CMP Target Price port traffic, NHAI and PGCIL awards. 252 295 . Total value of tenders issued in November 2015 stood at Rs598 bn (+59.8% YoY,) due to the roadways (+62% YoY, accounts for 57% of the total tenders issued in Nov2015). Ahluwalia Contracts BUY
Tendering increased in the railways (+659.5% YoY, 13% of total tenders issued in CMP Target Price Nov2015), water supply (+37% YoY, 6% of total tenders issued in Nov 2015) and 257 280 community services (+38% YoY, 6% of total tenders issued in Nov2015). Total value of
tenders issued in YTDFY16 stood at Rs3614 bn (+37.3% YoY) Ashoka Buildcon ACCUMULATE
. Total value of contracts awarded in November 2015 stood at Rs312.5 bn (+117.6% YoY) CMP Target Price driven by railways sector (+204% YoY, 49% of total projects awarded in Nov2015), power 193 201 equipment sector (+208.5% YoY, 16% of total projects awarded in Nov2015). Total value
of contracts awarded in YTDFY16 stood at Rs2208 bn (+27% YoY) Gujarat Pipavav REDUCE . NHAI has awarded projects amounting to Rs304 bn/2721 km in YTDFY16. The NHAI CMP Target Price awarded EPC contracts worth Rs196 bn/1918 km and awarded BOT contracts worth 151 155 Rs108 bn/803 km.
. As far as the competitive intensity is concerned in the EPC projects, out of the 35 projects IL&FS Transportation HOLD awarded so far, 13 were bid at a discount of 1-20% to benchmark cost, two at par while CMP Target Price 12 projects went at a premium of about 1.4-28%. 81 110 . Major Indian Ports handled 49 MMT in November 2015, showing growth of 0.9% YoY and grew by 1.4% MoM. YoY growth was seen in POL (+3.7% YoY), iron ore (+6.8 YoY), IRB Infrastructure BUY containers (+0.8% YoY) and others (+21.3% YoY) which gets offset by de-growth in CMP Target Price fertilizer (-18.5% YoY) and coal (-18.0% YoY). In YTDFY16 Major Indian Ports handled 236 318
396.9 MMT of cargo, a growth of 3.2% YoY, led by higher traffic seen across thermal coal (+13.1% YoY), fertilizer (+4.4% YoY) and others (+5.9% YoY) while iron ore (-43.5% YoY) J Kumar BUY has declined CMP Target Price . November 2015 monthly container traffic de-grew 1.2% YoY to 0.64 mn TEUs, led by de- 370 400
growth at Chennai (-8.9% YoY) and and JNPT (-0.5% YoY) whereas volumes at Kolkata (+2.3% YoY) and Cochin (+13.3% YoY) grew. Container traffic at Major Indian Ports grew Larsen & Toubro BUY to 5.4 mn TEUs (+1.8% YoY) in YTDFY16. Kolkata (+8.7% YoY, 6.9% share of total), V.O. CMP Target Price Chidambarnar (+10.2% YoY, 7.4% share of total) and Cochin (+9.8% YoY, 5% share of 1,283 1,700 total) were the major growth drivers while JNPT (+0.2% YoY, 55% share of total) and
Chennai (+0.1% YoY, 19.4% share of total) exhibited muted performance NCC ACCUMULATE . The month of November 2015 saw PGCIL award contracts worth Rs3.6 bn largely in CMP Target Price Insulators (Rs217 mn) and Substation (Rs1.32 bn). In YTDFY16 PGCIL has awarded 73 90 contracts worth Rs121.3 bn (+24% YoY)
Financial Snapshot Sadbhav Engg BUY CMP Target Price EPS EV/EBITDA P/E (Rs mn) FY16E FY17E FY16E FY17E FY16E FY17E 332 340 Adani Ports 12.7 12.9 19.4 17.4 19.9 19.5 Ahluwalia Contracts 11.9 16.2 12.2 9.1 21.6 15.9 Simplex Infra ACCUMULATE Ashoka Buildcon 2.7 6.2 11.1 8.2 42.1 31.3 CMP Target Price Gujarat Pipavav 5.6 6.2 17.2 13.6 35.0 24.3 319 395 IL&FS Transportation 6.7 15.4 11.3 9.1 21.0 5.3 IRB Infrastructure 18.2 19.5 8.8 7.6 13.0 12.1 J Kumar 15.1 21.6 11.1 8.7 24.5 17.1 Nitin Arora Larsen & Toubro 46.0 61.4 19.3 15.8 27.9 20.9 [email protected] NCC 3.5 4.9 8.7 7.6 21.0 14.8 +91 22 66242491 Sadbhav Engineering 8.9 11.8 18.1 14.4 14.5 15.0 Simplex Infrastructure 14.9 26.7 7.0 6.2 21.2 11.9 Kushan Parikh Source: Emkay Research Note: Sadbhav Engg. P/E ratio is FY16E/17E implied P/E as we have valued the company on [email protected] SoTP basis and estimate only standalone EPS. +91 22 66242431
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Construction & Infrastructure India Equity Research | Sector Update
Tenders Issued
. Total value of tenders issued in November 2015 stood at Rs598 bn (+59.8% YoY,) due to the roadways (+62% YoY, accounts for 57% of the total tenders issued in Nov2015).Tendering increased in the railways (+659.5% YoY, 13% of total tenders issued in Nov2015), water supply (+37% YoY, 6% of total tenders issued in Nov 2015) and community services (+38% YoY, 6% of total tenders issued in Nov2015). We witnessed total number of tenders decreased 6.7% on a YoY basis. . Out of Rs77.5 bn worth tenders, Rs38.1 bn are three orders coming from Ircon International Ltd. for constructing various tunnel sections, bridges and a station yard of the Katra-Banihal stretch of the Udhampur-Srinagar-Baramulla new broad gauge railway line in Jammu & Kashmir. . Water tenders included three tenders worth Rs16.4 bn combined coming from Telangana state for it Drinking Water Supply project. . Total value of tenders issued in YTDFY16 stood at Rs3614 bn (+37.3% YoY). We witnessed strong tendering in roadways, railways, community services, hospitals and water supply projects. . In November 2015, State govt tenders rose to Rs301.6 bn (+51% YoY), while Central govt tenders were up at Rs296.4 bn (+71% YoY) and private tenders stood at Rs290 mn. . State govt tenders in YTDFY16 increased to Rs2053 bn (+39% YoY), Central govt tenders increased to Rs1551 bn (+47% YoY) and private domestic tenders increased to Rs9.1 bn.
Exhibit 1: Tenders Published 78.3% MoM in November 2015 Exhibit 2: Number of tenders decreased by 2.1% MoM to 2178
800000 200 5000 100
600000 100 4000 50 3000 400000 0 0 2000 200000 -100
1000 -50
Rs Million Rs
MoM Growth (%) Growth MoM No. of Tenders of No.
0 -200 (%) Growth MoM 0 -100 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 State Government Central Government State Government Central Government Growth Rate MoM Growth Rate MoM Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 3: Tenders Published 59.8% YoY in November 2015 Exhibit 4: Number of tenders decreased by 6.7% YoY to 2178
500 150 400 120 90 300 60 200 30 100 0 0 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
YoY Growth (%) Growth YoY -30 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 -100
YoY Growth (%) Growth YoY -60 -200 -90
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 5: YTDFY16, Value of tenders increased by 37.3% Exhibit 6: YTDFY16, Number of tenders increased 3.8% to 19960
4000 30000 3500 25000 3000 20000 2500 2000 15000
In Rs bn Rs In 1500 10000 1000 No. of Tenders of No. 5000 500
0 0
YTDFY11 YTDFY12 YTDFY13 YTDFY14 YTDFY15 YTDFY16
YTDFY12 YTDFY13 YTDFY14 YTDFY15 YTDFY16 YTDFY11 Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 3
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 7: Sector wise details of tenders published in the month of November 2015 – In Value terms In Rs million Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Roadways 210,280 260,900 78,070 223,900 85,160 143,490 96,050 146,790 157,210 2,55,150 139,450 114,040 340,410 Community Services 27,750 23,140 21,270 35,920 35,680 32,240 40,420 34,220 25,490 81,430 32,680 34,630 38,340 Irrigation 40,040 14,520 8,260 23,160 15,260 23,110 17,940 14,030 20,990 12,010 18,960 20,300 20,390 Water Supply 25,450 10,120 19,830 47,240 14,600 11,580 24,380 10,120 183,010 90,680 50,290 14,080 34,890 Railways 10,200 30,930 11,120 10,360 14,330 88,690 30,570 15,640 22,690 18,230 32,490 53,470 77,470 Power Distribution 19,580 39,640 8,560 18,680 7,460 9,730 38,980 32,830 16,870 27,990 20,400 22,930 15,910 Thermal Power 450 2,550 3,220 4,940 520 1,250 2,270 2,480 1,320 5,740 2,370 1,680 3,280 Hospitals 17,360 5,610 11,320 23,920 9,080 11,040 18,190 18,550 24,240 4,520 12,440 14,160 Real Estate 12,060 2,960 17,120 9,240 31,490 Others 28,550 40,130 54,110 29,930 49,140 63,460 57,600 156,840 63,920 1,22,490 57,010 61,970 53,490 Total 374,360 439,290 210,050 408,410 263,190 391,870 350,740 431,140 510,050 637,960 358,170 335,540 598,340 Growth Rate YoY 4.2 -29.1 -71.1 -22.0 -60.5 384.0 62.0 57.5 31.5 47.1 -7.7 -29.7 59.8 Growth Rate MoM -21.6 17.3 -52.2 94.4 -35.6 48.9 -10.5 22.9 18.3 25.1 -43.9 -6.3 78.3 Source: Projects Today, Emkay Research
Exhibit 8: Sector wise details of tenders published in the month of November 2015 - In numbers Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Roadways 674 574 582 531 648 855 753 681 1,162 982 837 677 556 Community Services 309 496 484 530 356 391 537 433 324 412 262 311 417 Irrigation 93 184 123 98 165 248 189 163 93 106 97 105 111 Water Supply 147 265 112 303 123 276 159 140 243 211 71 141 176 Railways 87 110 85 105 101 142 116 142 192 134 158 186 158 Power Distribution 277 217 207 131 208 231 187 348 194 227 178 195 229 Thermal Power 116 63 42 58 75 83 68 103 129 73 70 60 57 Hospitals 58 39 48 47 38 95 100 97 86 452 44 72 Real Estate 69 35 40 47 50 Others 562 417 358 331 357 385 338 500 482 464 24 505 402 Total 2,334 2,384 2,032 2,170 2,120 2,696 2,492 2,610 2,916 2,695 2,149 2,224 2,178 Growth Rate YoY -28.9 -39.6 -45.4 -33.0 -23.7 119.7 14.3 34.5 12.9 -28.9 -31.7 9.8 -6.7 Growth Rate MoM 15.2 2.1 -14.8 6.8 -2.3 27.2 -7.6 4.7 11.7 -7.6 -20.3 3.5 -2.1 Source: Projects Today, Emkay Research
Exhibit 9: Break up in value terms of tenders in November 2015 Exhibit 10: Break up of number of tenders in November 2015 Thermal Hospitals Others Power 2% 9% Others 1% Hospital… 18% Roadways Power 26% Distribution Roadways Thermal 3% 57% Power Railways 3% 13% Water Power Supply Distribution Community 11% Services 6% Irrigation Railways Water Community Irrigation 19% 3% 7% Supply Services 5% 8% 6% Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 4
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 11: YTDFY16, improvement seen in most segments Exhibit 12: YTDFY16, improvement seen in most segments (Value terms) (No. of Contracts) Others Rs Million Others Number of Contacts Real Estate Real Estate Hospitals Hospitals Thermal Power Thermal Power Power Distribution Power Distribution Railways Railways Water Supply Water Supply Irrigation Irrigation Community Services Community Services Roadways Roadways 0 500000 1000000 1500000 0 2000 4000 6000 8000
YTDFY15 YTDFY16 YTDFY15 YTDFY16
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 13: Tenders in numbers terms down 17.5% YoY Exhibit 14: Road tenders in value terms +61.9% YoY
2000 200 400000 700 600 150 300000 500 100 400 300 1000 50 200000 200
0 Mn Rs In 100
100000 0
YoY Growth (%) Growth YoY No. of Tenders of No. -50 (%) Growth YoY -100 0 -100 0 -200 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Roadways YOY - Growth Roadways YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 15: Tenders in Number terms +19.4% YoY Exhibit 16: Irrigation tenders in value terms -49.1% YoY 70000 200 300 150 60000 150 250 100 50000 100 200 50 40000 50 150 0 30000 0
100 -50 Mn Rs In 20000 -50
No. of Tenders of No. YoY Growth (%) Growth YoY 50 -100 10000 -100 (%) Growth YoY 0 -150 0 -150 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Irrigation YOY - Growth Irrigation YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 17: Tenders in number terms +19.7% YoY Exhibit 18: Water supply tenders in value terms up 37.1% YoY 200000 800 350 100 300 600 50 150000 250 400 0 200 100000 150 -50 200
100 Mn Rs In 50000
No. of Tenders of No. 0 YoY Growth (%) Growth YoY
-100 (%) Growth YoY 50 0 -150 0 -200 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Water Supply YOY - Growth Water Supply YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 5
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 19: Tenders in Numbers terms is up 81.6% YoY Exhibit 20: Railway tenders in value terms +659.5% YoY
250 100 100000 800 80 200 60 80000 600 40 150 60000 400 20 0 40000 200 100
-20 Mn Rs In
20000 0
YoY Growth (%) Growth YoY YoY Growth (%) Growth YoY No. of Tenders of No. 50 -40 -60 0 -200 0 -80 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Railways YOY - Growth Railways YOY - Growth Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 21: Tenders in Number terms is down 17.3% YoY Exhibit 22: Power distribution tenders in value terms -18.7% YoY
400 700 140000 5000 350 600 120000 4000 500 300 100000 400 3000 250 300 80000 200 2000 200 60000 150 1000 100 40000
100 Mn Rs In
YoY Growth (%) Growth YoY No. of Tenders of No. 0 20000 0 (%) Growth YoY 50 -100 0 -1000 0 -200 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Power Distribution YOY - Growth Power Distribution YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 23: Tenders in number terms is down 50.9% YoY Exhibit 24: Thermal power tenders in value terms +628.9% YoY
140 100 10000 1200 120 1000 50 8000 100 800 600 80 0 6000 400 60 -50 4000 200
40 Mn Rs In 0
YoY Growth (%) Growth YoY (%) Growth YoY
No. of Tenders of No. -100 2000 20 -200 0 -150 0 -400 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Thermal Power YOY - Growth Thermal Power YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 25: Tenders in number terms down significantly Exhibit 26: Real estate tenders in value terms down significantly 250 400 70000 1000 60000 200 300 800 50000 200 600 150 40000 100 400 100 30000 0 200
In Rs Mn Rs In 20000
YoY Growth (%) Growth YoY YoY Growth (%) Growth YoY
No. of Tenders of No. 50 -100 10000 0 0 -200 0 -200 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Real Estate YOY - Growth Real Estate YOY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 6
Construction & Infrastructure India Equity Research | Sector Update
Key Highlights – Projects Tendered
During November 2015, a total of 2,178 project tenders worth Rs598.34 bn were floated. Among the notified tenders, 1,591 tenders worth Rs301.63 bn were by State Government, 572 tenders worth Rs296.43 bn were by the Central Government and the remaining 15 tenders were by private companies. During the month, the most notable tender was issued by the U.P. Expressways Industrial Development Authority (UPEIDA). On 7 November 2015, UPEIDA invited pre-qualification bids for shortlisting of contractors for the implementation of Lucknow to Ballia Access Controlled Expressway greenfield project (The Purvanchal Expressway) on EPC basis in six packages as follows: . Package-I: From Kabirpur (Dist. Lucknow) to Husainpur (Dist. Sultanpur) (km 0.00 to km 59.20). The contract value was Rs22.97 bn. . Package-II: From Hussainpur (Dist. Sultanpur) to Kurebhar (Dist. Sultanpur) (km 59.20 to km 124.00). The contract value was Rs21.73 bn. . Package-III: From Kurebhar (Dist. Sultanpur) to Hamirpur (Dist. Sultanpur) (km 124.00 to km 184.50). The contract value was Rs21.94 bn. . Package-IV: From Hamirpur (Dist. Sultanpur) to Miria Rerha (Dist. Azamgarh) (km 184.50 to km 237.20). The contract value was Rs19.01 bn. . Package-V: From Miria Rerha (Dist. Azamgarh) to Surar (Dist. Ghazipur) (km 237.20 to km 296.20). The contract value was Rs21.32 bn. . Package-VI: From Surar (Dist. Ghazipur) to Bharauli (Dist. Ballia) (km 296.20 to km 347.50). The contract value was Rs16.98 bn. In the roadways sector, the most notable tender was issued by the Ministry of Road Transport & Highways (MoRTH). On 16 November 2015, MoRTH re-invited bids for construction, operation and maintenance of Zozila Tunnel including approaches on National Highway No. 1 (Srinagar - Sonamarg - Gumri Road) 14.083 km long single tube bi-directional tunnel with parallel egress tunnel in the state of Jammu & Kashmir on DBFOT (Annuity) basis. The contract value was Rs90.9 bn. Earlier, MoRTH had issued the tender for the same project on 01 August 2015. In the community services sector, the most notable tender was issued by the Building Construction Department, Jharkhand. On 15 November 2015, BCD, Jharkhand invited bids for construction of proposed Jharkhand assembly building complex at Site-1 HEC Area, Ranchi. The estimated contract value was Rs3.69 bn. In the water supply sector, the most notable tender was issued by the Hyderabad Metro Water Supply & Sewerage Board. On 21 November 2015, HMWSSB invited bids for the construction of RCC service reservoirs & providing inlet, outlet & distribution network for water supply distribution network project for the peripheral circles of GHMC under three packages as follows: . Package-I: Alwal, Kapra, Uppal & Ramchandrepuram circles. The contract value was Rs5.43 bn. . Package-II: Qutubullapur, L B Nagar & Gaddiannaram and Rajendranagar circles. The contract value was Rs5.39 bn. . Package-III: Kukatpally, Serilingampally, Patancheru circles. The contract value was Rs5.61 bn.
Emkay Research | December 16, 2015 7
Construction & Infrastructure India Equity Research | Sector Update
Projects Awarded
. Total value of contracts awarded in November 2015 stood at Rs312.5 bn (+117.6% YoY) driven by railways sector (+204% YoY, 49% of total projects awarded in Nov2015), power equipment sector (+208.5% YoY, 16% of total projects awarded in Nov2015). GE Global Sourcing India Pvt. Ltd was awarded Rs146.6 bn project by Indian Railways for setting up a diesel locomotive factory in Bihar. . Total value of contracts awarded in YTDFY16 stood at Rs2208 bn (+27% YoY). We witnessed growth in awarding in roadways (+152.5% YoY), railways (79.2% YoY), water (+78.8% YoY) and power distribution (30% YoY). . In November 2015, domestic awards increased to Rs284.4 bn (+111.7% YoY,) and international awards during the month increased to Rs28.1 bn (204.1% YoY). . Domestic awards on YTDFY16 basis stood at Rs1819.5 bn (+45.8% YoY) while international awards stood at Rs388.7 bn (-20.8% YoY).
Exhibit 27: Nov 2015, projects awarded in value terms +29.3% MoM Exhibit 28: Nov 2015, projects awarded in number terms +17.5% MoM 500000 300 300 150 250 400000 250 100 200 200 300000 150 50 100 150 200000 50 0
100 Terms % In Rs Million Rs 0 100000 Terms% In
No. of Awards of No. -50 -50 50 0 -100 0 -100 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Indian Overseas Growth Rate MoM Indian Overseas Growth Rate MoM Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 29: Nov 2015, projects awarded up 117.6% YoY Exhibit 30: Nov 2015, projects awarded number terms +53.4% YoY
400 500
300 400
200 300 200 100
YoY Growth (%) Growth YoY 100 YoY Growth (%) Growth YoY 0 0 -100 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 -100
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 31: YTDFY16 projects awarded up 27% YoY Exhibit 32: In YTDFY16 projects awarded in number terms +6.4% YoY
2500 1600 1400 2000 1200 1500 1000 800
1000 600 In Rs bn Rs In
In Numbers In 400 500 200
0 0
YTDFY14 YTDFY11 YTDFY12 YTDFY13 YTDFY15 YTDFY16
YTDFY15 YTDFY16 YTDFY12 YTDFY13 YTDFY14 YTDFY11 Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 8
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 33: Sector wise projects awarded during November 2015 in value terms Sectors - Value Rs mn Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Roadways 24,530 6,090 26,250 33,710 42,980 97,520 62,980 28,000 23,940 79,840 57,870 24,810 29,650 Power Distribution 20,220 91,470 17,560 35,670 87,010 46,810 28,870 45,860 87,970 52,630 37,490 24,120 27,680 Power Equipment 15,990 21,200 67,250 51,180 57,770 2,140 183,840 980 5,760 60,520 36,490 49,330 Railways 50,880 1,240 28,590 15,000 3,020 4,620 310 40,870 30,770 5,200 15,540 12,230 154,680 Real Estate 260 340 940 3,100 27,750 30,890 37,050 410 4,460 5,060 9,690 1,850 8,940 Process 3,620 18,440 7,850 4,890 15,160 850 6,700 49,020 780 22,190 22,010 137,940 1,940 Pipeline 90 2,860 130 280 430 50 20 15,000 6,490 90 10 130 Infrastructure 2,660 35,540 13,850 560 1,050 1,670 510 - 200 Water 4,580 6,380 12,780 30 3,410 5,030 1,290 2,910 6,990 14,900 44,150 10 10,270 Irrigation 10 10,630 6,750 2,340 7,310 8,000 1,670 550 330 1,890 1,230 990 6,290 Mining - - Community Services 190 4,720 520 2,930 4,970 560 2,300 870 9,320 190 5,500 1,370 880 Hospitals 830 920 10 170 8,810 180 60 - - Others 19,740 4,300 22,090 24,710 19,870 200,020 1,150 15,370 10,780 12,990 24,390 1,920 22,510 Total 143,600 204,130 190,580 136,370 263,670 453,550 153,320 369,570 191,830 207,200 278,480 241,740 312,500 Growth Rate YoY -18.1 -11.0 32.9 -69.6 -10.1 163.4 -37.4 302.0 -42.8 73.7 -31.7 7.9 117.6 Growth Rate MoM -35.9 42.2 -6.6 -28.4 93.3 72.0 -66.2 -13.3 -5.9 8.0 34.4 -13.2 29.3 Source: Projects Today, Emkay Research
Exhibit 34: Projects awarded in Nov 2015 - Value terms Exhibit 35: Projects awarded in Nov 2015 - Numbers of contracts Community Community Water Hospitals Services Others Services Others 3% Irrigation Roadways 1% 0% 7% 8% 2% 9% 12% Infrastructure Irrigation Roadways 0% Power 6% 33% Pipeline Distribution Water 0% 9% Process 1% 1% Infrastructure 0% Real Estate Power Power 3% Equipments Pipeline Distribution 2% 8% 16% Power Process Real Estate Equipments Railways 8% 5% Railways 50% 9% 7% Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 36: In YTDFY16, awarding increased in most sectors – Value Exhibit 37: In YTDFY16, contracts awarded increased in most sectors Terms - Number Terms
Others Others Number of Contracts Hospitals Rs Million Hospitals Community Services Community… Mining Mining Irrigation Irrigation Water Water Infrastructure Infrastructure Pipeline Pipeline Process Process Real Estate Real Estate Railways Railways Power Equipments Power Equipments Power Distribution Power Distribution Roadways Roadways 0 200000 400000 600000 0 100 200 300 400
YTDFY15 YTDFY16 YTDFY15 YTDFY16
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 9
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 38: Projects awarded November 2015 up 20.9% YoY Exhibit 39: Projects awarded in November 2015 up significantly YoY Roadways 50000 80000 120000 1500 Irrigation 100000 40000 60000 1000 80000 30000 40000 60000 500
20000 20000 In Rs Mn Rs In
40000 Mn Rs In 0 10000 0 (%) Growth YoY 20000 (%) Growth YoY 0 -500 0 -20000 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Roadways YoY - Growth Irrigation YoY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 40: Projects awarded November 2015 +124.2% YoY Exhibit 41: Projects awarded November 2015 up 2044% YoY 50000 15000 Water 200000 Railways 2500 40000 2000 10000 150000 1500 30000 5000 100000 1000 20000 In Rs Mn Rs In 500 In Rs Mn Rs In 50000 0 (%) Growth YoY
10000 0 YoY Growth (%) Growth YoY 0 -5000 0 -500 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov- Mar-14 Jul-14 Nov- Mar-15 Jul-15 Nov- 13 14 15 Water YoY - Growth Railways YoY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 42: Projects awarded November 2015 up 36.9% YoY Exhibit 43: Projects awarded November 2015 up 208.5% YoY
100000 Power Distribution 6000 250,000 Power Equipments 2000
80000 200,000 1500 4000 60000 150,000 1000 2000
40000 100,000 500 In Rs Mn Rs In 0 Mn Rs In
20000 (%) Growth YoY 50,000 0 YoY Growth (%) Growth YoY
0 -2000 0 -500 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15
Power Distribution YoY - Growth Power Equipments YoY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Exhibit 44: Projects awarded November 2015 up significantly YoY Exhibit 45: Projects awarded November 2015 down 13.7% YoY
40000 Real Estate 4000 50000 Community Services + Hospitals 10000
3000 40000 8000 30000 6000 2000 30000 20000 4000
1000 20000 In Rs Mn Rs In In Rs Mn Rs In 2000 10000
0 (%) Growth YoY 10000 0 (%) Growth YoY 0 -1000 0 -2000 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Nov-13 Mar-14 Jul-14 Nov-14 Mar-15 Jul-15 Nov-15 Real Estate YoY - Growth Community Services + Hospitals YoY - Growth
Source: Projects Today, Emkay Research Source: Projects Today, Emkay Research
Emkay Research | December 16, 2015 10
Construction & Infrastructure India Equity Research | Sector Update
Key Highlights – Projects Awarded
During November 2015, a total of 135 contracts with order value totaling Rs303.01 bn were awarded. These orders (domestic as well as overseas) were bagged by 102 companies across various sectors. Further, of the 135 finalized contracts, 5 were bagged by Indian companies to execute job work overseas. Indian Railways issued Letter of Award (LoA) for setting up of the Diesel Locomotive Factory at Marhowra in Saran district of Bihar to USA-based company M/s. GE Global Sourcing India. A joint venture company between the Ministry of Railways and GE Global Sourcing India will be created to build and run the factory. The factory to manufacture and supply Modern Diesel Electric Locomotives of 4500 HP and 6000 HP to Indian Railways. These locos, in combination can operate as 9000 HP and 12000 HP multiple units (1000 locos to be manufactured in a period of ten years). Bharat Heavy Electricals Limited (BHEL) secured the second largest project orders worth Rs46.14 bn for setting up two Supercritical Thermal Power projects involving one unit each of 800 MW sets, in Andhra Pradesh. The projects are 1x800 MW Dr. Narla Tata Rao Thermal Power Station (Dr NTTPS) Stage-V of Andhra Pradesh Power Generation Corporation (APGENCO) and 1x800 MW Sri Damodaram Sanjeevaiah Thermal Power Station (SDSTPS) Stage-II, popularly known as Krishnapatnam Supercritical Thermal Power Project, of Andhra Pradesh Power Development Company (APPDCL). The scope of work in the projects includes supply, erection and commissioning of boilers, turbines, generators and associated auxiliaries. The third largest contract, valued at Rs10.24 bn, was bagged by Pratibha Industries from Government of Telangana, Rural Water Supply & Sanitation Department, TWPS., Circle, Karimnagar (Water Supply Project) for providing drinking water to habitations in LMD- Karimnagar, Ramadugu Segment & LMD-Manakondur, Husnabad, Huzurabad Segment in Telangana including operation and maintenance for 10 years. The project was scheduled for completion in 30 months.
The roadways sector saw the finalization of 40 new contracts worth Rs26.5 bn. The largest contract in the sector was finalized by National Highways Authority of India (NHAI), for a Rs6.44 bn job to PNC Infratech for improvement / augmentation of Aligarh-Moradabad section of NH- 93 to two lane with paved shoulders from km 85.650 to km 232.020 in Uttar Pradesh under NHDP Phase-IV on EPC basis. The project is scheduled for completion in 30 months. During November 2015, fourteen contracts worth Rs27.69 bn were awarded in the power distribution sector. Power Grid Corporation of India (PGCIL) owned 11 of the 14 contracts finalized in the month. However, the largest contract in this sector was finalized by the Saudi Electricity Company. The company awarded a Rs7.18 bn job to Larsen & Toubro (L&T) for construction of five 132 kV substations at Hail in Saudi Arabia. The scope involves detailed design, engineering, construction, testing and commissioning of 132 kV gas insulated switchgear, 132/13.8 kV, 50/67 MVA power transformers, 132/33 kV, 80/100 MVA power transformers, 13.8 kV switchgears, 33 kV switchgear, control and protection systems, substation automation systems, HVAC, Novec firefighting system, along with associated auxiliary system and civil works.
Overseas Contract In November 2015, Indian companies bagged five overseas contracts worth Rs28.1 bn in Heavy/Light Commercial Vehicles, Power Distribution, Crude Oil/POL Pipeline & Solar based Power sectors from countries like the South Africa, Saudi Arabia, USA & Philippines. The largest overseas contract, valued at Rs13.34 bn was bagged by Ashok Leyland from Government of Cote D’Ivoire for supply of 3600 vehicles. This contract is being funded by EXIM Bank of India and the company has to supply the trucks and buses over the next 12 months.
Emkay Research | December 16, 2015 11
Construction & Infrastructure India Equity Research | Sector Update
Other Developments
The last date for submission of bids for the construction of six lane elevated road from Basaveshwara Circle to Hebbal Flyover via Le-Meridien Hotel and Mekhri Circle in Bengaluru was extended up to 26 December 2015. National Highways Authority of India has cancelled its tender issued on 30 October 2014 for four- laning of Aunta-Simaria (Ganga Bridge with approach road) section of NH 31 from km 197.900 to 206.050 (design chainage) and (existing chainage km 204.741 to km 209.945 of NH-31) [total design length - 8.150 km] in the state of Bihar on EPC basis due to change in contract model. The project is now proposed to be taken up on Hybrid Annuity mode instead of EPC mode. Lack of participation forced tender issuing authorities to extend the last date of submission of 504 project tenders and cancellation of around four tenders during November 2015.
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Construction & Infrastructure India Equity Research | Sector Update
Highway Pulse
NHAI awards contracts worth Rs304 bn/2721 Km in YTDFY16 . NHAI has awarded projects amounting to Rs304 bn/2721 km in YTDFY16. The NHAI awarded EPC contracts worth Rs196 bn/1918 km and awarded BOT contracts worth Rs108 bn/803 km. . As far as the competitive intensity is concerned in the EPC projects, out of the 35 projects awarded so far, 13 were bid at a discount of 1-20% to benchmark cost, two at par while 12 projects went at a premium of about 1.4-28%. . During the month NHAI came out with tenders on additional 10 projects (Rs82.25 bn/409 km) under the Hybrid Annuity model of which 2 projects were earlier tendered in EPC mode (Rs13.6 bn/60 km) and another 2 projects were earlier tendered as a single BOT Toll project (Rs18.2 bn/105 km). . Sadbhav Engg won two EPC projects on a continuous stretch, UP/Haryana border- Yamunanagar-Saha-Barwala-Panchkula Section Packages 1 & 2. In Package 1 (44.3 km), L1 was Sadbhav Engg at Rs4.68 bn, L2 was PNC Infratech at Rs5.14 bn. In Package 2 (45.2 km) L1 was Sadbhav Engg at Rs4.37 bn, L2 was KSS-Ramky Infra at Rs4.59 bn. . In Solapur-Bijapur BOT project, L1 was Uniquest Infra Ventures at a premium of Rs68 mn, L2 was Essel Infra at a grant of Rs1700 mn. . In Guna-Biora BOT project, L1 was Dilip Buildcon at a grant of Rs270 mn, L2 was Oriental Structures at a grant of Rs990 mn, L3 was Sadbhav Engg at a grant Rs1860 mn, L4 was ITNL at a grant of Rs3545 mn and L5 was IRCON at a grant of Rs3900 mn. . In Biora-Dewas BOT project, L1 was Oriental Structures at a grant of Rs2528.9 mn, L2 was Sadbhav Engg at a grant of Rs4860 mn, L3 was Essel at a grant of Rs4950 mn, and L4 was ITNL at a grant of Rs5543 mn. . IL&FS Transportation won two BOT projects on a single stretch, National Highway 6. In Fagne-Maha/Guj border (Package 3), L1 was IL&FS Transportation at a grant of Rs2450 mn, L2 was Essel Infra at a grant of Rs2520 mn, L3 was Sadbhav Engg at a Grant Rs3960 mn and L4 was ACL at a grant Rs6580 mn. In Amravati-Chikli (Package 1), L1 was IL&FS Transportation at a grant of Rs1835 mn, L2 was Sadbhav Engg at a grant Rs3150 mn, L3 was IRB Infra at a grant Rs5850 mn, L4 was Essel Infra at a grant Rs6030 mn and L5 was TRIL at a grant of Rs7380 mn. . PNC Infratech declared the L1 Bidders for two roads projects of National Highways Authority of India for an aggregate project cost of Rs. 15.06 bn (PNC Share Rs9.30 bn). The projects involve rehabilitation and augmentation of four laning of Koilwar – Bhojpur won at a project cost of Rs8.25 bn won 1.4% premium to the benchmark cost. Second lowest bidder (L2) was BSCPL Infrastructure which bid the project at Rs8.7 bn. Third lowest bidder (L3) was HCC which bid the project at Rs9.2 bn. Bhojpur - Buxar section won at a project cost of Rs6.81 bn, 6% premium to the benchmark cost. Second lowest bidder (L2) was Ashoka Buildcon which bid the project at Rs7.09 bn. Third lowest bidder (L3) was BSCPL which bid the project at Rs7.3 bn . The NHAI has awarded six packages of Eastern peripheral expressway project. . Package 1 -22 km. Sadbhav Engg has quoted project cost of Rs7.92 bn in line with NHAI benchmark cost of Rs7.71 bn. The L2 in this project was L&T quoted Rs8.39 bn and L3 was GR Infrastructure quoted Rs8.74 bn. . Package 2 -24 km. Sadbhav Engg has quoted project cost of Rs7.56 bn in line with NHAI benchmark cost of Rs7.85 bn. The L2 in this project was L&T quoted Rs8.20 bn and L3 was GR Infrastructure quoted Rs8.34 bn. . Package 3 – 24.5 km L1 Lowest bidder JP associates Quoted project cost at 7.47 bn 5% below the NHAI benchmark cost , L2 was Corson corivam at Rs7.76 bn . Package 4 - 22 km L1 Ashoka Buildcon quoted project cost at Rs7.89 bn in line NHAI benchmark cost , L2 Oriental structures quoted at 7.98 bn . Package 5 - 21 km L1 Oriental structures bid 1% below the NHAI benchmark cost , and L2 was Ashoka Buildcon at Rs6.84 bn . Package 6 – 22 Km L1 Gayatri projects bid the project 12% below the benchmark cost, L2 was GR Infrastructure at Rs6.98 bn.
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Construction & Infrastructure India Equity Research | Sector Update
. Gayatri Projects won another 4 EPC projects in the state of West Bengal, 2 projects on the contiguous stretch of NH-233, 4 laning Ghaghra Bridge to Varanasi section, package 1, 60 kms at a premium of 11.1% and package 2, 59 kms at a premium of 14.3%. . L&T won its second NHAI project for the year, in EPC mode, 4 laning of Baharagora to Singhara section of NH-6 at adiscount of 18.2%. . In September 2015, NHAI awarded the 4 packages of JNPT roads (57 kms) in EPC mode, of which one package was won by Ashoka Buildcon (10.6 kms, awarded cost Rs4.14 bn) at a premium of 4.7% while the other three packages were won by a JV of J. Kumar Infraprojects and J.M. Mhatre Infra (46.3 kms, awarded cost Rs16.34 bn) where J. Kumar Infra’s share is Rs10.65 bn. . PNC Infratech was declared L1 in the Aligarh Moradabad Road Project (146.4 kms), awarded at Rs6.45 bn (+28% premium to benchmark), L2 was NCC at Rs7 bn.
Exhibit 46: Length completed as of September 2015 stands at 901 kms 2848 3000 2693 2500 2205 2249 1901 2000 1682 1784 1441 1500 901 1000 753 635 500
0
FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY15
FY14 FY16 YTD FY16
Length completed (Km) September
Source: NHAI, Emkay Research
Emkay Research | December 16, 2015 14
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 47: List of projects awarded under EPC Type (in Rs Mn) in YTDFY16 Project Cost % Bidding (including EPC below Length land cost work Awarded NH LOA benchmark Projects Bidder (in Km) Type plus R&R) cost Cost No Issue Date cost Madurai- Ramanathapuram (NHDP - 3) KNR Const 115.0 EPC 9370.8 9370.8 49 0.0% UP/Haryana border-Yamunanagar-Saha- Sadbhav Engg 44.6 EPC 6008.5 4800.0 4680 73 5/19/2015 -2.5% Barwala-Panckula Section (Pckg 1) UP/Haryana border-Yamunanagar-Saha- Sadbhav Engg 41.8 EPC 5623.4 4500.0 4365 73 5/19/2015 -3.0% Barwala-Panchkula Section (Pckg 2) Four Laning of existing Thiruvananthapuram Bypass from Kazhakkoottam KNR Const 26.8 EPC 8452.4 6212.0 6690.6 47 5/14/2015 7.7% (Thiruvananthapuram) to Mukkola Junction Balance Work of 4-Laning of Gorakhpur - Punj Lloyd 41.1 EPC 4838.1 5418.4 28 12.0% Gopalganj Section Four laning of Ghoshpukur – Salsalabari L&T Ltd 83.8 EPC 18172.3 10830.0 11330.2 31D 6/1/2015 4.6% Section(pckg - 1) Two Laning with PS of Gulabpura to Uniara Dilip Buildcon - 204.0 EPC 8299.4 5707.3 5970.0 148D 6/12/2015 4.6% Section Ranjit Buildcon JV Four laning of Koilwar to Bhojpur PNC Infratech 110.0 EPC 8140.0 8250.0 30/84 Aug-15 1.4% Four laning of Bhojpur to Buxar PNC Infratech 47.6 EPC 6420.0 6810.0 84 Aug-15 6.1% Eastern Peripheral Expressway (6 lane) Pckg 1 Sadbhav Engg 22.0 EPC 7711.8 7920.0 NE-11 Aug-15 2.7% Eastern Peripheral Expressway (6 lane) Pckg 2 Sadbhav Engg 24.5 EPC 7857.8 7560.0 NE-11 Aug-15 -3.8% Eastern Peripheral Expressway (6 lane) Pckg 3 JP Associates 24.5 EPC 7885.1 7470.0 NE-11 Aug-15 -5.3% Eastern Peripheral Expressway (6 lane) Pckg 4 Ashoka Buildcon 22.0 EPC 7893.1 7898.9 NE-11 Aug-15 0.1% Eastern Peripheral Expressway (6 lane) Pckg 5 Oriental Structures 21.0 EPC 6645.3 6588.8 NE-11 Aug-15 -0.9% Eastern Peripheral Expressway (6 lane) Pckg 6 Gayatri Projects 22.0 EPC 7685.6 6750.0 NE-11 Aug-15 -12.2% 4 laning of Ghaghra Bridge to Varanasi section Gayatri Projects 59.9 EPC 6670.0 7410.0 233 Aug-15 11.1% (package 1,2 & 3) 4 laning of Ghaghra Bridge to Varanasi section Gayatri Projects 59.0 EPC 6868.9 7850.0 233 Aug-15 14.3% (package 1,2 & 3) Four laning of Sultanpur to Varanasi [Package-I] Gayatri Projects 74.5 EPC 10275.3 9860.0 56 Aug-15 -4.0% Four Laning Of Sultanpur-Varanasi [Package-II] Gayatri Projects 58.0 EPC 8152.8 8060.0 56 Aug-15 -1.1% 4 Lanning of Baharagora to Singhara Section L&T Ltd 111.6 EPC 12829.4 9087 7435.0 6 7/6/2015 -18.2% Section D-E, D-G JNPT Phase-II (Package IV) Ashoka Buildcon 10.6 EPC 4744.2 3955.1 4140.0 4B 9/18/2015 4.7% J. Kumar Infra-JM 348A, Amra Marg JNPT Phase II (Package III) 12.2 EPC 5476.7 5000.0 Aug-15 Mhatre Infra JV SH54 Gavanphata Interchange JNPT Phase-II J. Kumar Infra-JM 4B, 24.2 EPC 6518.5 5947.0 (Package –II) Mhatre Infra JV SH54 Karalphata Interchange JNPT Phase-II, J. Kumar Infra-JM 4B, 9.8 EPC 5700.7 5390.0 (Package-I) Mhatre Infra JV SH54 4 - lane Islampur Bypass Ashoka Buildcon 10.3 EPC 2385 2770.0 31 16.2% Rehab & upgradation of existing road to 2-lane with PS config in Jowai – Meghalaya/Assam G. R. Infraprojects 102.3 EPC 4792.1 4682.7 44 9/10/2015 -2.3% Border section Rehabilitation and Augmentation of 4 Laning Of M.G. Contractors 14.1 EPC 2392.3 2122.4 21 9/24/2015 -11.3% Kharar-Kurali Section Pvt. Ltd. Improvement of Amritsar bypass by construction Varaha Infra 24.6 EPC 2731 2293.4 1 9/4/2015 -16.0% of additional structures and service road 2-Lane With PS Chhapra-Rewaghat- G. R. Infraprojects 73.1 EPC 5161.3 3370 102 Aug-15 Muzaffarpur Section Two Laning With PS of Biharsharif-Barbigha- G. R. Infraprojects 54.6 EPC 3995.4 2300.6 82 Aug-15 Mokama (2nd Call) Four laning of Patna to Koilwar Madhucon Projects 43.93 EPC 5560.7 4919 30 Aug-15 Two Laning with paved shoulder of Chhapra – G. R. Infraprojects 94.26 EPC 8548.0 6407 85 Aug-15 Gopalganj Four-Laning of Forbesganj to Jogbani Section JKM Infraprojects 9.3 EPC 3220.9 2581 57A Aug-15 (ICP at Jogbani) 2 laning with PS of Uncha Nagla-Khanuawa- H G Infra Eng. Pvt 75 EPC 2759 12 Aug-15 Roppas-Dolpur Ltd Aligarh Moradabad PNC Infratech 146.4 EPC 5033 6445.0 93 28.0% Total 1918.2 108311.8 196225.8 186478.2 Source: NHAI, Emkay Research
Emkay Research | December 16, 2015 15
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 48: List of projects awarded under BOT Type (in Rs Mn) in YTDFY16 Project Awarded Length Cost Cost LOA Issue Projects Bidder (in Km) Type (Rs Mn) (Rs Mn) NH No Date Six Laning of Agra – Etawah Bypass Section IRB Infra 124.5 BOT(Toll) 26500.0 Premium 810 2 7/6/2015
Four/Six Laning of Solapur- Bijapur Section Uniquest 109.1 DBFOT (Toll) 13775.4 Premium 70 52 5/20/2015
Four laning of Guna - Biora Dilip Buildcon 93.5 BOT 10129.0 Grant 270 3 6/29/2015
Four laning of Biora –Dewas Oriental Structures 141.3 BOT 15837.9 Grant 2528.9 3 6/29/2015
4/6-laning of Fagne – MAH/Guj Border (Pckg-III) IL&FS Transportation 140.8 DBFOT 18857.4 Grant 2450 6 7/25/2015
4/6 laning of Amravati-Chikli (Pckg-I) IL&FS Transportation 194.0 DBFOT 22881.8 Grant 1835 6 7/24/2015
Total 803.1 107981.5 Source: NHAI, Emkay Research
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Construction & Infrastructure India Equity Research | Sector Update
Exhibit 49: List of tenders issued under EPC mode Project Completion Main- Road Stretch (EPC Route) State NH No. Length Cost Rsmn yrs tenance 4-laning of Varanasi Gorakhpur section [Package-III Birnon Uttar Pradesh 29 60.0 8523.2 2.5 4 Village To Amilla Village] 4-laning of Varanasi Gorakhpur section [Package-IV Amilla Uttar Pradesh 29 60.3 10381.5 2.5 4 Village to Gorakhpur] Four laning of Ghoshpukur – Salsalabari Section (pckg - 2) West Bengal 31D 71.1 9720.0 Two Laning with paved shoulder of Chhapra – Gopalganj Bihar 85 94.3 6406.8 Four laning of Yadgiri- Warangal Section Telangana 163 99.1 11410.0 Four laning of Bakhtiyarpur – Mokama section Bihar 31 44.6 9861.4 Four laning of Simaria- Khagaria Bihar 31 60.2 6072.5 Four laning of Aunta – Simaria (Ganga bridge with approach rd) Bihar 31 8.2 4898.9 2.5 4 Four Laning of Nerchowk-Kullu stretch [Aut-Takoli Section Himachal Pradesh 21 6.7 5561.1 2.5 4 (Tunnel), Package-V] Four laning of Nerchowk - Kullu stretch [Rehukaldhar - Aut Himachal Pradesh 21 4.6 5751.4 2.5 4 Section (Tunnel), Package-IV] Nerchowk-Kullu stretch [Bata-Rehukaldhar Section (Tunnel), Himachal Pradesh 21 2.6 3774.3 2.5 4 Package-III] Four laning of Nerchowk-Kullu stretch [Pandoh-Bata Section Himachal Pradesh 21 13.0 6907.8 2.5 4 (Tunnel), Package-II] Dalkhola Bypass section from Design Chainage West Bengal 34 5.4 809.3 2 4 4-laning of Varanasi Gorakhpur [package-II from Sandah to Uttar Pradesh 29 76.0 8566.4 2.5 4 Birnon] Service Road and RCC Drain incld. Storage Lane at Chat 22 Punjab 2.8 240.6 Junction on Ambala-Chandigarh (new NH-152) Upgradation of Kullu-Manali section from Km 272.00 to Km NH-21 Himachal Pradesh 37.3 2184.7 2 4 309.345 (Designed Chainage) (now NH-3) Rehabilitation and upgradation of Birmitrapur – Barkote section Odisha 23 126.0 8600.5 2.5 4 by Two/Four laning of NH – 23 Four Laning With PS From Chichra To Kharagpur West Bengal 6 50.8 7696.3 2.5 4 Six laning of Kamrej - Chalthan Section Gujarat 8 16.3 2994.4 2 3 Flyover at (km 544/650), including ROB incld Services Roads, Maharashtra 6 4086 3 4 Footpath for RCC drains on Urban link to Nagpur-Raipur road Four laning of Chandigarh-Kharar section from Sector-39 Punjab 21 & 95 10.2 4473 2.5 4 (Round about) at Chandigarh to Kharar Rehab & Upgradation of Four Laning with PS of Talibani to 2.5 4 Sambalpur Section Odisha 6 50.7 5228 200 4 Laning of Sargaon- Bilaspuraa (Package III) Chhattisgarh 35.5 4132 2 4 (new NH130) 200 (new 2 4 4 Laning of Simga - Sargaon (Package II) Chhattisgarh NH130) 42.4 4784 200 (new 2 4 4/6 laning of Raipur- Simga (Package I) Chhattisgarh NH130) 48.6 5867 4- Laning of Vijayawada – Machilipatnam Andhra Pradesh 9 64.6 8711 2 4 Rehab & upgrade of Jharpokharia Baripada Baleshwar section Odisha 5 80.6 8571 2.5 4 Four laning of Haridwar Nagina section Uttarakhand/UP 74 73.0 9895 2.5 4 Four Laning of Nagina-Kashipur section Uttarakhand/UP 74 102.0 12908 2.5 4 Six laning of Kamrej - Chalthan Section Gujarat 8 16.3 2994 2 3 New 4 lane Bridge across Varsova Creek & its approaches with 8 (New NH- Interchange on NH-8 (New NH-48) between Surat –Dahisar Maharashtra 1651 2 4 48) section Four Laning of Mahulia-Baharagora- JH/WB Border Section of Jharkhand 33 & 6 71.6 8233 2.5 4 NH-33 & NH-6 ROB cum Flyover at Ranichak upto Haldia Dock Complex West Bengal 41 1889.8 2.5 4 New 4 lane Bridge across Varsova Creek & its approaches with 8 (New NH- Maharashtra 1651 2 4 Interchange on NH-8 (New NH-48) between Surat –Dahisar 48) Four Laning of Mahulia-Baharagora- JH/WB Border Section of Jharkhand 33 & 6 71.6 8233 2.5 4 NH-33 & NH-6 Source: NHAI, Emkay Research
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Construction & Infrastructure India Equity Research | Sector Update
Exhibit 49: List of tenders issued under EPC mode (Contd…) Project Completion Main- Road Stretch (EPC Route) State NH No. Length Cost Rsmn yrs tenance ROB cum Flyover at Ranichak upto Haldia Dock Complex West Bengal 41 1889.8 2.5 4 Four Laning of Hassan to Maranahally (pkg 1) Karnataka 75 45.2 7014 2 4 Four Laning of Hospet-Bellary-Karnataka/AP Border Karnataka 63 95.4 11674 2 4 Four-Laning of Balance Connectivity Road from Visakhapatnam Andhra Pradesh 16 829 1.5 4 Port Four Laning Of From Addahole (Near Gundya) to Bantwal Karnataka 75 65.0 8700 2.5 4 Cross - Pckg 2 Four Laning of Hubli - Hospet Section from Proposed Hubli Karnataka 63 143.7 16642 3 4 Bypass to Hospet (Hitnal NH-13 Junction) Four Laning of Kerala/Tamil Nadu Border to Villukuri Tamil Nadu 47 27.3 7078 2 4 Four Laning of Villukuri to Kanyakumari and Nagercoil to Tamil Nadu 47B 42.8 6412 2 4 Kavalkinaru Total 1759.7 255726.4 Source: NHAI, Emkay Research
Exhibit 50: List of tenders issued under BOT mode Length Project cost Road Stretch (BOT Mode) State NH No. (In Km) (Rs Mn) Type Six Laning of Handia Varanasi Section Uttar Pradesh 2 72 23617 BOT(TOLL) Six Laning of Chakeri Allahabad section Uttar Pradesh 2 145 16616 BOT(TOLL) Six- Laning of Baleshwar-Chandikhole Odisha 5 137 2177 BOT(TOLL) Four-Laning from Telebani to Sambalpur Odisha 6 75 6589 BOT(TOLL) Dimapur – Kohima (4 laning) Nagaland 39 49 10899 BOT(Annuity) Nagina-Kashipur Uttarakhand 74 99 10990 BOT(TOLL) Lucknow-Sultanpur UP 56 126 12760 DBFOT Four Laning of Haridwar - Nagina Uttarakhand 74 72 9150 BOT Four Laning from Singhara to Binjabahal Section Odisha 6 104 10780 BOT 4-laning of Cuttack – Angul Odisha 42 112 13771 BOT Six Laning of Kharar to Ludhiana Punjab 95/21 76 12820 DBFOT 4/6-laning of Chikli-Fagne (Package-II) Maharashtra 6 150 18881 DBFOT Four Laning of Binjhabahal to Telebani Section Odisha 6 78 8588 DBFOT (Toll) Four laning of Kodinar to Veraval Section (Package-VI) Gujarat 8E 41 7807 DBFOT (Toll) Four/Six laning of Bhavnagar-Talaja Section (Package –I) Gujarat 8E 48 8412 DBFOT (Toll) Two/ Four Laning of Tamil Nadu/Karnataka Border to Bangalore Section Karnataka 209 171 6674 DBFOT (Toll) Six Laning of Bihar- Jharkhand Border (Chordaha) to Barwa Adda Section Jharkhand 2 152 27687 BOT(toll) Six Laning of Aurangabad to Bihar - Jharkhand Border (Chordaha) Section Bihar 2 70 10055 BOT(toll) Six Laning Of Vijayawada – Gundugolanu Section Of NH-5 Including 6- Andhra Pradesh 16 78 12479 DBFOT (Toll) Lane Hanuman Junction Bypass And 4-Lane Vijayawada Bypass Four laning of Barhi-Hazaribagh Section Jharkhand 33 41 3768 BOT(toll) Six laning of Chilakaluripet - Vijayawada Section Andhra Pradesh 16(old NH5) 83 37160 BOT(toll) Six Laning of Kishangarh Udaipur Ahmedabad Section (near Gulabpura) to Rajasthan 79 125 11823 BOT(toll) (end of Chittorgarh bypass) - package 2 Six Laning of Kishangarh to Gulabpura Section Rajasthan 79 & 79A 90 9838 DBFOT (Toll) Four/Six Laning of Bodare to Dhule section Maharashtra 211 (new 67 8396 DBFOT (Toll) NH-52) Four/six Laning of Aurangabad to Telwadi road section Maharashtra 211 (new 87 12522 DBFOT (Toll) NH-52) Total 2346.6 314257.8 Source: NHAI, Emkay Research
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Construction & Infrastructure India Equity Research | Sector Update
Exhibit 51: List of tenders under Hybrid Annuity mode Length Project cost Road Stretch (Hybrid Annuity Mode) State NH No. Type km (Rs mn) Delhi – Meerut Expressway (UP Border to Dasna) - Package II Delhi/UP 24 19.3 13765.1 DBOT (Hybrid Annuity) Delhi – Meerut Expressway (Dasna to Hapur) - Package III Delhi/UP 24 22.3 10236.9 DBOT (Hybrid Annuity) Delhi – Meerut Expressway - Package I Delhi/UP 24 8.7 6636 DBOT (Hybrid Annuity) 235 (New DBOT (Hybrid Annuity) Four Laning of Meerut-Bulandshahr section Uttar Pradesh 61.2 6803.8 NH-334) Four Laning of Solan Kaithalighat Section (NHDP Phase-III) Himachal Pradesh 5 22.9 5211.4 DBOT (Hybrid Annuity) 87 (New NH 4-Laning of Rampur-Kathgodam section [Package-II] Uttarakhand 49.8 5714.4 DBOT (Hybrid Annuity) No. 9, 109) 87 (New NH 4-Laning of Rampur-Kathgodam section [Package-I] Uttar Pradesh 43.4 6159.4 DBOT (Hybrid Annuity) No. 9) Four laning of Ner Chowk – Pandoh including Pandoh Bypass Himachal Pradesh 21 31.3 9593.3 DBOT (Hybrid Annuity) section (Package – I) Four Laning of Takoli Kullu section Himachal Pradesh 21 28.7 4048.5 DBOT (Hybrid Annuity) Four Laning of Gagalheri-Saharanpur-Yamunanagar (UP/Haryana Uttar Pradesh 73 51.5 10093.6 DBOT (Hybrid Annuity) Border) section 4-Laning of Chutmalpur-Ganeshpur section & Roorkee- Uttar 72A & 73 53.3 8098.8 DBOT (Hybrid Annuity) Chutmalpur-Gagalheri section Pradesh/Uttarakhand Four Lane Stand Alone Ring Road/Bypasses for Nagpur City, Maharashtra 28.0 5479.9 DBOT (Hybrid Annuity) Package-II Four Lane Stand Alone Ring Road / Bypass for The Nagpur City, Maharashtra 33.5 4955.6 DBOT (Hybrid Annuity) Package-I Construction of new link (NH-133B) (Junction of NH-133B and 131A on Manihari Bypass) and Construction of Manihari Bypass Jharkhand/Bihar 131A 21.9 19055.5 DBOT (Hybrid Annuity) (Junction of NH-133B and 131A on Manihari Bypass) near Narenpur in Bihar including Ganga Bridge to 4 lane standard Four Laning of Tuljapur – Ausa (including Tuljapur Bypass) Section Maharashtra 361 67.4 9050 DBOT (Hybrid Annuity) Total 134.4 42663.2 Source: NHAI, Emkay Research
Emkay Research | December 16, 2015 19
Construction & Infrastructure India Equity Research | Sector Update
Port Pulse
In YTDFY16 Major Indian Ports handled 396.9 MMT of cargo, +3.2% YoY . Major Indian Ports handled 49 MMT in November 2015, showing growth of 0.9% YoY and grew by 1.4% MoM. YoY growth was seen in POL (+3.7% YoY), iron ore (+6.8 YoY), containers (+0.8% YoY) and others (+21.3% YoY) which gets offset by de-growth in fertilizer (-18.5% YoY) and coal (-18.0% YoY). . V.O. Chidambarnar (+16.9% YoY), Mormugao (+36.9% YoY), Paradip (+8.9% YoY) and Kandla (+6.9% YoY) saw growth in volumes while Ennore (-13.5% YoY), Chennai (-10% YoY), Cochin (-11.2% YoY) and JNPT (-0.1% YoY) witnessed decline in volumes. . November 2015 monthly container traffic de-grew 1.2% YoY to 0.64 mn TEUs, led by de- growth at Chennai (-8.9% YoY) and and JNPT (-0.5% YoY) whereas volumes at Kolkata (+2.3% YoY) and Cochin (+13.3% YoY) grew. Given the weakness witnessed in exports we believe that container volume growth in west coast has slowed. . In YTDFY16 Major Indian Ports handled 396.9 MMT of cargo, a growth of 3.2% YoY, led by higher traffic seen across thermal coal (+13.1% YoY), fertilizer (+4.4% YoY) and others (+5.9% YoY) while iron ore (-43.5% YoY) has declined. Mormugao (+27.1% YoY) on the West Coast and V.O. Chidambarnar (+18.8% YoY) on the East Coast grew fastest. . Container traffic at Major Indian Ports grew to 5.4 mn TEUs (+1.8% YoY) in YTDFY16. Kolkata (+8.7% YoY, 6.9% share of total), V.O. Chidambarnar (+10.2% YoY, 7.4% share of total) and Cochin (+9.8% YoY, 5% share of total) were the major growth drivers while JNPT (+0.2% YoY, 55% share of total) and Chennai (+0.1% YoY, 19.4% share of total) exhibited muted performance.
Exhibit 52: Top 5 Ports by YTDFY16 Growth in total volume YTDFY16 Vol. YTD Growth %Share of Port (mn MT) % Total Volume Mormugao 11.5 27.1% 2.9% V.O. Chidambaranar 24.8 18.8% 6.2% Kolkata 33.0 17.3% 8.3% Kandla 65.7 5.1% 16.6% Ennore 20.7 4.1% 5.2% Source: IPA, Emkay Research
Exhibit 53: YTDFY16 Commodity-wise traffic handled (in MT) Exhibit 54: YTDFY16 Port-wise traffic handled (in MT) KANDLA KOLKATA Others POL JNPT 17% 8% PARADIP 22% 32% 11% 12% VISAKHAPA TNAM 9% MUMBAI 10%
MORMUGAO ENNORE Container 5% Thermal 3% 20% NEW V.O. Coal CHENNAI Fertiliser Iron ore Coking Coal MANGALORECOCHIN CHIDAMBARANAR 5% 16% 9% 3% 2% 6% 4% 6%
Source: IPA, Emkay Research Source: IPA, Emkay Research
Emkay Research | December 16, 2015 20
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 55: In November 2015 Coal traffic de-grew 18% YoY Exhibit 56: In November 2015 Container traffic grew 0.8% YoY
14.0 80.0 12.00 15.0 12.0 60.0 10.00 10.0 10.0 40.0 8.00 5.0 8.0 0.0 20.0 6.00 6.0 -5.0 0.0 4.0 4.00 -10.0 2.0 -20.0 2.00 -15.0
0.0 -40.0 0.00 -20.0
Jul-14 Jul-15
Jul-15 Jul-14
Jan-14 Jan-15
Mar-14 Mar-15
Nov-13 Sep-14 Nov-14 Sep-15 Nov-15
May-15 May-14
Jan-14 Jan-15
Mar-14 Mar-15
Nov-13 Nov-14 Nov-15
Sep-14 Sep-15
May-14 May-15
Coal (mn MT) Growth %(YoY) Container (mn MT) Growth %(YoY) Source: IPA, Emkay Research Source: IPA, Emkay Research
Exhibit 57: Overall Port Traffic for November 2015 rose by 0.9% YoY
60.0 15.0 50.0 10.0 40.0 30.0 5.0 20.0 0.0 10.0
- -5.0
Jul-14 Jul-15
Apr-14 Oct-14 Apr-15 Oct-15
Jan-15 Jan-14 Jun-14 Jun-15
Mar-14 Feb-14 Feb-15 Mar-15
Nov-15 Nov-13 Dec-13 Nov-14 Dec-14
Aug-14 Sep-14 Aug-15 Sep-15
May-14 May-15 Total Port Traffic (mn MT) Growth %(YoY)
Source: IPA, Emkay Research
Exhibit 58: Total Exports – Rs bn Exhibit 59: Total Imports – Rs bn
3000.0 40.0 3000.0 30.0 2500.0 30.0 2500.0 20.0 2000.0 20.0 2000.0 10.0 10.0 1500.0 1500.0 0.0 0.0 1000.0 -10.0 1000.0 -10.0 500.0 -20.0 500.0 -20.0
0.0 -30.0 0.0 -30.0
Oct-15 Oct-13 Apr-14 Oct-14 Apr-15
Oct-15 Oct-13 Apr-14 Oct-14 Apr-15
Jun-14 Jun-15
Jun-14 Jun-15
Feb-14 Feb-15
Feb-14 Feb-15
Dec-13 Dec-14
Aug-15 Aug-14
Dec-14 Dec-13 Aug-14 Aug-15
Exports Rs. Bn Y-o-Y % change Imports Rs. Bn Y-o-Y % change
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Emkay Research | December 16, 2015 21
Construction & Infrastructure India Equity Research | Sector Update
Exports of Major Commodities
Exhibit 60: Agriculture & Allied Products – Rs bn Exhibit 61: Chemical and Related products – Rs bn
300.0 50.0 200.0 40.0 250.0 40.0 30.0 150.0 30.0 200.0 20.0 20.0 150.0 10.0 100.0 10.0 100.0 0.0 -10.0 50.0 0.0 50.0 -20.0
0.0 -30.0 0.0 -10.0
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Jun-14 Jun-15
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Feb-14 Feb-15
Jun-14 Jun-15
Dec-14 Dec-13 Aug-14 Aug-15
Feb-14 Feb-15
Dec-13 Dec-14
Aug-14 Aug-15
Agricultural and allied products Rs Bn YoY % change Chemicals & related products Rs Bn YoY % change
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Exhibit 62: Total Manufactured Goods – Rs bn Exhibit 63: Engineering Goods – Rs bn
1,400.0 60.0 500.0 60.0 1,200.0 50.0 400.0 40.0 1,000.0 40.0 800.0 30.0 300.0 20.0 20.0 600.0 10.0 200.0 0.0 400.0 0.0 100.0 -20.0 200.0 -10.0
0.0 -20.0 0.0 -40.0
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Apr-15 Oct-13 Apr-14 Oct-14 Oct-15
Jun-14 Jun-15
Jun-14 Jun-15
Feb-14 Feb-15
Feb-14 Feb-15
Dec-13 Dec-14
Aug-14 Aug-15
Dec-13 Dec-14
Aug-14 Aug-15
Total Manufactured goods Rs Bn YoY % change Engineering goods Rs Bn YoY % change
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Exhibit 64: Textiles – Rs bn
250.0 70.0 60.0 200.0 50.0 150.0 40.0 30.0 100.0 20.0 50.0 10.0 0.0
0.0 -10.0
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Jun-14 Jun-15
Feb-14 Feb-15
Dec-14 Dec-13
Aug-14 Aug-15
Textiles Rs Bn YoY % change
Source: CMIE, Emkay Research
Emkay Research | December 16, 2015 22
Construction & Infrastructure India Equity Research | Sector Update
Imports of Major Commodities
Exhibit 65: Agriculture & Allied Products – Rs bn Exhibit 66: Chemicals & Related Products – Rs bn
160.0 80.0 300.0 40.0 140.0 250.0 30.0 120.0 60.0 200.0 20.0 100.0 40.0 80.0 150.0 10.0 20.0 60.0 100.0 0.0 40.0 0.0 20.0 50.0 -10.0
0.0 -20.0 0.0 -20.0
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Jun-14 Jun-15
Jun-14 Jun-15
Feb-14 Feb-15
Feb-14 Feb-15
Dec-14 Dec-13 Aug-14 Aug-15
Aug-14 Dec-13 Dec-14 Aug-15
Agricultural and allied products Rs Bn YoY % change Chemicals & related products Rs Bn YoY % change
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Exhibit 67: Total Manufactured Goods – Rs bn Exhibit 68: Engineering Goods – Rs bn
2,000.0 60.0 500.0 30.0 50.0 20.0 1,500.0 40.0 400.0 30.0 10.0 20.0 300.0 1,000.0 0.0 10.0 200.0 0.0 -10.0 500.0 -10.0 100.0 -20.0 -20.0
0.0 -30.0 0.0 -30.0
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Jun-14 Jun-15
Jun-14 Jun-15
Feb-14 Feb-15
Feb-14 Feb-15
Dec-13 Aug-14 Dec-14 Aug-15
Aug-14 Dec-13 Dec-14 Aug-15
Total Manufactured goods Rs Bn YoY % change Engineering goods Rs Bn YoY % change
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Exhibit 69: Electronic Goods – Rs bn Exhibit 70: Coking & Non-Coking Coal – mn MT
350.0 50.0 25.0 300.0 40.0 20.0 250.0 200.0 30.0 15.0 150.0 20.0 10.0 100.0 10.0 50.0 5.0
0.0 0.0 -
Jul-14 Jul-15
Oct-13 Apr-14 Oct-14 Apr-15 Oct-15
Jun-14 Jun-15
Apr-14 Oct-14 Apr-15 Oct-15
Feb-14 Feb-15
Jun-14 Jan-15 Jun-15
Dec-13 Aug-14 Dec-14 Aug-15
Feb-15 Mar-15
Aug-14 Sep-14 Nov-14 Dec-14 Aug-15 Sep-15 Nov-15
May-14 May-15
Electronic goods Rs Bn YoY % change Coking & Non-Coking Coal - mn MT
Source: CMIE, Emkay Research Source: CMIE, Emkay Research
Emkay Research | December 16, 2015 23
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 71: Total Port Traffic – Major Commodities Particulars (in mn MT) Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 POL 15.4 15.1 16.8 13.8 17.9 14.0 18.1 15.7 17.4 16.4 14.6 15.8 16.0 Growth % (YoY) 11.8 -1.4 3.8 -8.6 5.8 -11.9 17.1 1.8 17.0 -3.0 -6.7 1.4 3.7 Coal 11.4 10.3 10.1 9.7 11.8 11.4 11.4 9.5 10.9 10.4 10.4 11.4 9.3 Growth % (YoY) 28.0 8.8 23.7 31.0 20.1 23.1 37.9 -7.3 16.5 10.2 12.9 16.4 -18.0 Iron ore 0.9 1.6 1.4 1.3 1.3 0.6 0.6 0.8 0.9 1.1 0.8 0.5 0.9 Growth % (YoY) -60.0 -33.0 -38.5 -42.5 -43.0 -74.5 -59.8 -45.0 -37.0 -26.2 -20.9 -48.5 6.8 Fertliser 1.7 1.0 1.3 1.4 1.3 1.0 1.2 1.6 1.7 2.0 1.5 1.5 1.4 Growth % (YoY) 35.4 -22.6 45.4 34.7 29.2 -14.3 1.6 13.9 -0.5 66.2 10.5 -9.8 -18.5 Container 9.51 10.11 9.47 9.35 10.68 10.23 10.21 9.77 11.00 10.16 10.07 9.93 9.59 Growth % (YoY) 9.2 2.3 -4.2 4.6 0.8 5.3 0.6 -2.8 7.0 1.2 -3.3 3.2 0.8 Container (in Mteus) 0.65 0.68 0.65 0.61 0.71 0.66 0.67 0.66 0.73 0.68 0.69 0.67 0.64 Growth % (YoY) 0.6 4.4 1.5 3.8 4.2 -0.1 4.3 0.3 0.7 2.4 -1.4 Others 9.7 11.2 9.5 9.4 11.0 10.7 11.5 11.2 10.4 10.9 9.5 9.1 11.8 Growth %(YoY) 5.6 16.9 -2.4 3.3 1.0 17.5 -3.2 28.8 4.6 7.6 -13.6 -7.6 21.3 Total 48.5 49.3 48.5 44.9 54.0 47.9 53.1 48.5 52.3 50.9 46.9 48.3 49.0 Growth %(YoY) 10.3 2.9 3.1 2.6 4.7 1.1 9.4 2.8 9.9 3.5 -3.6 1.6 0.9 Source: IPA, Emkay Research
Exhibit 72: Total Port Traffic – Major Ports Major Ports (in ‘000 MT) Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Kolkata Dock System 1217 1443 1356 1336 2102 1133 1366 1330 1369 1421 1442 1508 1348 Haldia Dock Complex 2638 2769 2839 2605 3682 2709 3102 2740 3085 3009 2554 2395 2521 Total: Kolkata 3855 4212 4195 3941 5784 3842 4468 4070 4454 4430 3996 3903 3869 Paradip 5904 6214 5357 5645 6487 6078 5891 6280 6086 6285 5448 6437 6428 Visakhapatnam 4675 4858 4581 4560 5067 4003 4913 4409 5142 4789 4381 5337 4611 Ennore 2726 2731 2519 2403 2702 2939 2741 2049 3059 2573 2618 2382 2359 Chennai 4294 4319 4670 3706 4384 4622 4442 4334 4418 3967 4028 4167 3866 V.O. Chidambaranar 2537 2473 2435 3235 3435 3215 3221 3030 3599 3129 2474 3119 2966 Cochin 1744 1404 2029 1637 1936 1805 2010 1726 1880 2015 1895 1781 1548 New Mangalore 2947 2719 3307 2393 3764 2569 3204 3027 2885 2776 2466 2654 2700 Mormugao 1384 1225 1411 1321 1710 1316 1669 1153 1224 1304 1451 1479 1895 Mumbai 5369 5518 5405 4771 5319 5131 5589 4742 5338 5145 5172 5008 5081 JNPT 5221 5334 5200 4957 5572 5609 5576 5160 5711 5079 5143 5108 5218 Kandla 7889 8272 7438 6355 7848 6746 9338 8532 8543 9443 7781 6934 8432 Total 48545 49279 48547 44924 54008 47875 53062 48512 52339 50935 46853 48309 48973 YoY Growth 10.3 2.9 3.1 2.6 4.7 1.1 9.4 2.8 9.9 3.5 -3.6 1.6 0.9 Source: IPA, Emkay Research
Emkay Research | December 16, 2015 24
Construction & Infrastructure India Equity Research | Sector Update
Power T&D Pulse
For YTDFY16 PGCIL awarding up 24% YoY at Rs121.3 bn . The month of November 2015 saw PGCIL award contracts worth Rs3.6 bn largely in Insulators (Rs217 mn) and Substation (Rs1.32 bn). . In YTDFY16 PGCIL has awarded contracts worth Rs121.3 bn (+24% YoY). . Substations category saw orders worth Rs34.7 bn (+125% YoY) in YTDFY16 with Chinese players dominating the market at 65% market share (Hyosung Corp. – 30%, New Northeast Electric Group High Voltage Switchgear Co. Ltd. – 15%, Rongxin Power Electronic Co. Ltd. – 14%, Xian XD Switchgear Electric Co. Ltd. – 6%). . Towers category saw orders worth Rs31.6 bn (-2.8% YoY) in YTDFY16 with KEC Intl. leading the pack at 33% mkt share followed by EMC (17% mkt share), Kalpataru Power Transmission (16% mkt share), L&T (11% mkt share) and Skipper Ltd. (9% mkt share).
Exhibit 73: YTDFY16, PGCIL orders are up 24% YoY
140,000 PGCIL Orders Growth YoY 200% 120,000 150% 100,000 80,000 100% 60,000 50% 40,000 in Rs mn Rs in 0% 20,000
0 -50%
YTDFY09 YTDFY11 YTDFY12 YTDFY13 YTDFY14 YTDFY15 YTDFY16 YTDFY10 Source: PGCIL, Emkay Research
Exhibit 74: PGCIL monthly awarding trend 60,000 FY14 FY15 YTDFY16 50,000 40,000 30,000
20,000 in Rs mn Rs in 10,000
0
July
May
April
June
March
August
October January
February
November December September Source: PGCIL, Emkay Research
Exhibit 75: Product-wise ordering activity
100,000 FY14 FY15 YTDFY16 80,000 60,000
in Rs mn Rs in 40,000 20,000
0
Others
Tower
Pile
Cables
Rural
Reactors
Insulators
Substation Foundation
Conductors Electrification Transformers Source: PGCIL, Emkay Research
Emkay Research | December 16, 2015 25
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 76: YTDFY16, Sub-Stations orders up 124.8% YoY Exhibit 77: YTDFY16, Towers orders down 2.8% YoY
40,000 150% 50,000 250% 35,000 40,000 200% 30,000 100% 150% 25,000 30,000 100% 20,000 50% 20,000 50%
15,000 0% in Rs mn Rs in in Rs mn Rs in 10,000 0% 10,000 5,000 -50%
0 -50% 0 -100%
YTDFY13 YTDFY09 YTDFY10 YTDFY11 YTDFY12 YTDFY14 YTDFY15 YTDFY16
YTDFY09 YTDFY10 YTDFY11 YTDFY12 YTDFY13 YTDFY14 YTDFY15 YTDFY16
Sub-Stations Growth YoY Towers Growth YoY
Source: PGCIL, Emkay Research Source: PGCIL, Emkay Research
Exhibit 78: YTDFY16 Towers Award Share – Company-wise
KEC INTERNATIONAL LTD 9% 9% ELECTRICAL MANUFACTURING COMPANY LTD (EMC) 11% 5% 1% KALPTARU POWER TRANSMISSION LTD (KPTL)
LARSEN & TOUBRO (L&T)
16% Skipper Limited
Karamtara Engineering Pvt. Ltd. 33% JV of Associated Power Structures Pvt. Ltd. & Ketan Construction Limited 17% K Ramachandra Rao Transmission & Projects Pvt Ltd
Source: PGCIL, Emkay Research
Exhibit 79: YTDFY16 Sub-stations Award Share – Company-wise
HYOSUNG CORPORATION
7% New Northeast Electric Group High Voltage Switchgear 9% 6% Co. Ltd. Rongxin Power Electronic Co. Ltd. 5% 2% 10% Alstom T&D India Limited 2% Techno Electric & Engg. Company Ltd
BHARAT HEAVY ELECTRICALS LIMITED (BHEL) 14% Xian XD Switchgear Electric Co. Ltd.
30% JV of ABB INDIA and ABB SWITZERLAND
Blue Star Limited 15% Megha Engineering & Infrastructures Ltd.
Source: PGCIL, Emkay Research
Emkay Research | December 16, 2015 26
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 80: Trends in awarding of Towers amongst companies
25,000
20,000
15,000
10,000 in Rs mn Rs in
5,000
0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 YTDFY16
L&T KEC (Int) Ltd TATA Projects Ltd KPTL Gammon India Ltd
Source: PGCIL, Emkay Research
Exhibit 81: Trend in awarding of Sub-stations amongst companies
15,000
10,000
in Rs mn Rs in 5,000
0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 YTDFY16
LARSEN & TUBRO (L&T) SIEMENS LTD. HYOSUNG CORPORATION AREVA T&D/Alstom T&D New Northeast Electric Group Techno Electric & Engg. Co Ltd Source: PGCIL, Emkay Research
Emkay Research | December 16, 2015 27
Construction & Infrastructure India Equity Research | Sector Update
Exhibit 82: List of PGCIL Orders in November 2015 Order Awardee Value (Rs mn) Yuzhnouraisky Insulators and Insulator Pkg Is01 And Insulator Package Is02 For 765kv D/C Wardha-Hyderabad Link 217 Fittings Plant Insulators Total 217 Substation Package-GIS-S1 For Extension Of 400/220kv Bongaigaon S/S, Extension Of 220kv Salakati S/S, Extension Of 220/132kv Khuppi S/S(Neepco), Augmentation Of 220/132kv Balipara S/S And Alstom T&D India Limited 1319 Stringing Of 2nd Ckt Of 220kv Bongaigaon-Salakati D/C Line Associated With NERSS-III Substation Total 1319 SDH Telecom Equipment Package (Package-S) Under Telecommunication Backbone And Access Tejas Networks Limited 161 Network Augmentation Project Fibre Optic Cabling Packages 1a, 1b, 1d And 1e For Establishment Of Fibre Optic Based Communication ZTT India Private Limited 190 Network On Transmission Lines Of WBSETCL Under Consultancy Works In The State Of West Bengal Fibre Optic Cabling Packages 1a, 1b, 1d And 1e For Establishment Of Fibre Optic Based Communication ZTT India Private Limited 215 Network On Transmission Lines Of WBSETCL Under Consultancy Works In The State Of West Bengal Fibre Optic Cabling Packages 1a, 1b, 1d And 1e For Establishment Of Fibre Optic Based Communication ZTT India Private Limited 225 Network On Transmission Lines Of WBSETCL Under Consultancy Works In The State Of West Bengal Fibre Optic Cabling Packages 1a, 1b, 1d And 1e For Establishment Of Fibre Optic Based Communication ZTT India Private Limited 186 Network On Transmission Lines Of WBSETCL Under Consultancy Works In The State Of West Bengal JV of AAM Pty Ltd Australia & Ap-01 Aerial Patrolling Of Transmission Lineslines In Northern Region 164 Pinnacle Air Pvt Ltd DWDM Telecom Equipment Package-R Under Augmentation Of Telecommunication Backbone And Fiberhome Telecom. 839 Access Network Technologies Co. Ltd Package-II (B) Communication Equipment Package (Pdh Eqpt) Under Implementation Of Communication Systems In West Bengal And Jharkhand Associated With Consultancy Services To Jharkhand Urja Valiant Communications 75 Sancharan Nigam Limited (JUSNL) And West Bengal State Electricity Transmission Company Limited Limited (WBSETCL) Others Total 2055 Grand Total 3592 Source: PGCIL, Emkay Research
Emkay Research | December 16, 2015 28
Construction & Infrastructure India Equity Research | Sector Update
Emkay Rating Distribution BUY Expected total return (%) (Stock price appreciation and dividend yield) of over 25% within the next 12-18 months. ACCUMULATE Expected total return (%) (Stock price appreciation and dividend yield) of over 10% within the next 12-18 months. HOLD Expected total return (%) (Stock price appreciation and dividend yield) of upto 10% within the next 12-18 months. REDUCE Expected total return (%) (Stock price depreciation) of upto (-) 10% within the next 12-18 months. SELL The stock is believed to underperform the broad market indices or its related universe within the next 12-18 months.
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Emkay Research | December 16, 2015 www.emkayglobal.com 29