Dear Shareholder,
The imperative for robust infrastructure development in India is clear:
it underpins our economic growth, fuels sustainable development, and propels our
aspirations for global leadership. Over the past decade, we have witnessed transformative
progress in our infrastructure landscape, driven by a clear vision for a Viksit Bharat
that is inclusive, sustainable, and resilient. The government's commitment to
bridging the infrastructure gap between urban and rural areas is commendable, ensuring a
more equitable and prosperous society. As we continue to execute on these ambitious
initiatives, we remain confident in India's emergence as a global leader in
infrastructure, characterized by its dynamism, inclusivity, and resilience.
This transformation is most evident in the revitalization of
India's railways. With increased investment, we have witnessed the addition of over
25,000 kilometres of new tracks, surpassing many developed nations. Similarly, the road
and highway sector has experienced unprecedented growth, with over 55,000 kilometres of
new highways constructed in the past decade. A multi-modal approach, exemplified by PM
Gati Shakti Yojana and the National Infrastructure Pipeline, ensures efficient project
execution and timely completion. The Sagarmala project leverages our coastline for trade
and transportation, reducing costs and promoting sustainable development. Investment in
water transport creates jobs and reduces congestion on road and rail networks. Moreover,
the expansion of metro networks, growing from five cities in 2014 to twenty today, has
revolutionizing urban transportation.
This commitment to infrastructure development is reflected in the
government's allocation of 3.3% of GDP towards the sector in FY24. The National
Infrastructure Pipeline (NIP), originally targeting 111 lakh crore, has been revised to
147 lakh crore. The total budgetary outlay for infrastructure-related ministries has
increased from 3.7 lakh crore in FY23 to 5 lakh crore in FY24. India's ambitious
plan to invest 143 lakh crore on infrastructure between FY24 and FY30, focusing on power,
roads, and emerging sectors like wind, solar and pumped storage units (PSPs), underscores
our commitment to a sustainable future. With its ability to store a large amount of
energy, frequent starts/stops, and faster ramp-ups/ramp-downs, PSPs are ideally suited to
address the dynamic supply and demand.
The sheer scale of the government's infrastructure ambitions
necessitates significant financial resources. Fortunately, we are witnessing an increase
in long-term funding availability. The National Investment and Infrastructure Fund, the
National Bank for Financing Infrastructure and Development, and non-bank institutions like
Power Finance Corporation, Rural Electrification Corporation, and Indian Renewable Energy
Development Agency are playing crucial roles. Furthermore, infrastructure investment
trusts, sovereign funds, and green bonds are emerging as viable funding sources.
India's commitment to a robust infrastructure ecosystem extends
beyond financial resources. We have undertaken significant structural reforms, including
legal reforms to streamline the arbitration framework. The 2021 amendment to the
Arbitration and Conciliation Act, 1996, coupled with the Commercial Courts, Commercial
Division and Commercial Appellate Division of High Courts Act, 2015, facilitates
expeditious resolution of commercial disputes. The government's ‘Vivad se
Vishwas Il (Contractual Disputes) scheme further enhances dispute settlement mechanisms.
These reforms are essential for creating a favourable environment and
establishing India as a leading hub for international commercial arbitration.
During the year under review, Your Company's strategic focus has
been on consolidating our business for sustainable growth. We are committed to long-term
goals and identifying opportunities to leverage our strengths, enhance our capabilities
and offerings, and explore new avenues for expansion.
Our core competency remains EPC Projects, and we are capitalizing on
our strong geographical presence to expand our reach. We are actively pursuing
opportunities in the robust hydropower pipeline in Bhutan, where we have a
well-established presence. We are also exploring opportunities in Nepal, Israel, UAE and
Saudi Arabia.
We are further strengthening our position in Maharashtra, aiming to
expand our capabilities by undertaking new work in and around Mumbai. Following the
successful completion of several hydropower projects in Jammu & Kashmir, we are the
lowest bidder for a new project in the region, positioning us to secure additional
projects there.
We are actively pursuing opportunities in the emerging interlinking of
rivers sector under the National Perspective Plan (NPP), which is being spearheaded by the
National Water Development Agency (NWDA). Additionally, we are exploring partnerships with
leading equipment manufacturers to capitalise opportunities in the nuclear power sector.
These strategic initiatives reflect our commitment to diversifying our portfolio and
expanding into high-growth areas.
Our recent financial performance reflects our commitment to strategic
growth and financial stability. The successful oversubscription of our Rights Issue
offering, raising 350 crore in April 2024, demonstrates strong investor confidence. We
are also actively pursuing strategies to unlock disputed receivables, including selective
out-of-court settlements, to ensure immediate liquidity. We are also focussed on an
accelerated deleveraging plan, which will free our Company to grow faster.
Our subsidiary, Steiner AG in Switzerland, has successfully completed
the sale of its construction business subsidiary, Steiner Construction SA, to Demathieu
Bard, and marks a significant step in Steiner AG's transition to a pure real estate
development company.
HCC has registered a turnover of 5,043 crore, with operating profits
of 687 crore for FY24, driven by the ramp-up of execution across multiple project sites.
The Company has continued its focus towards utilising technology to improve productivity
and efficiency, timely & profitable execution of its order book, containing working
capital and better funds management. The Company is the lowest bidder in projects worth
4,500 crore, where contracts are yet to be signed. Another 10,400 crore worth bids have
been submitted, which are under evaluation. The Company's order book stood at 10,475
crore as of March 31, 2024.
HCC has achieved significant milestones in recent months, demonstrating
our commitment to project delivery. We have received completion certificates for three key
projects: the Sone Bridge, the Bistan Lift Irrigation project, and the Tata Memorial
Centre. In Bhutan, we have received completion and taking over certificate from the client
for the Nikachhu Hydropower Project. Furthermore, we have received a provisional
completion certificate for the Sawalkot Tunnel Project, and handover formalities have
commenced for the Rajasthan Atomic Power Project Units 7 & 8 with the Department of
Atomic Energy.
We are also making significant progress on several ongoing projects,
including the Mumbai Coastal Road Project, Mumbai Metro Line 3, Delhi Metro Rail
Corporation's DC06 contract, Railway Tunnels T-49A, T13, T14, and the Anjikhad
Cable-Stayed Bridge in Jammu & Kashmir, the Tehri Pumped Storage Plant and Vishnugad
Pipalkoti HEP in Uttarakhand, the Fast Reactor Fuel Cycle Facility at Kalpakkam in Tamil
Nadu, the Integrated Nuclear Recycle Plant for Bhabha Atomic Research Centre at Tarapur,
and the Parwan Dam in Rajasthan.
We are committed to a holistic approach to sustainability, integrating
social, economic, governance, and financial considerations into all aspects of our
operations. Our partnership with the World Economic Forum in the areas of sustainability
and urban planning helps shape next practices for the future. We are actively pursuing our
goals related to water sustainability, minimizing construction waste, prioritizing
employee health and safety, and fostering community development. This commitment to
sustainability is integral to our long-term success and reflects our dedication to
responsible business practices that align with global best practices.
I extend my sincere gratitude to the entire HCC team, our valued
customers, vendors, and stakeholders for their unwavering support and trust, particularly
during these dynamic times. I also express my deep appreciation to my fellow Board Members
for their insightful contributions and unwavering support.
The current buoyant market conditions and India's ambitious
infrastructure journey present a unique and exciting opportunity for HCC. With our
unwavering commitment to excellence, sustainability, and innovation, we are poised to
capitalize on these favourable prospects, delivering significant value to our
shareholders. Let us embrace this journey of growth and progress with confidence,
navigating the evolving business landscape and solidifying HCC's position as a
leading force in the infrastructure sector.
| Yours sincerely, |
| Ajit Gulabchand |
| Chairman |