Dear Members,
We have witnessed yet another unprecedented year that saw two waves of
the Covid-19 pandemic, and a war cause widespread challenges and uncertainty. While the
global populace and economy have been affected by these forces, India - to a certain
extent - has been resilient and has been able to weather the storms well.
Economic Scenario & Growth Drivers
The Indian economy, driven in large part by the revival in sentiments
and aided by an expansionary stance by the Government saw a strong growth rate in the past
fiscal. Consequently, the economy posted a strong 8.7% growth in real GDP terms vis-a-vis
a contraction in the previous financial year. The focus of the government on increasing
expenditure on infrastructure as well as implementing the multiple housing and rural
development programs also meant a real expansion of economic activity throughout the year.
The Union Budget 2022-23 clearly demarcated the role of the government
with the intention of public investment acting as an impetus to boost private investment
and demand. The Central Government's ‘Effective Capital Expenditure' is
expected to be ' 10.68 lakh crore (US$ 142.77 billion), or around 4.1% of GDP The seven
engines, i.e. Roads, Railways, Airports, Ports, Mass Transportation, Waterways, and
Logistics Infrastructure, for economic transformation, seamless multimodal connectivity,
and logistical efficiency will be covered by the PM Gati Shakti National Master Plan.
These initiatives are expected to not only propel employment, but also
drive growth and Your Company is well-poised to capitalise on the opportunities that will
present itself over the forthcoming quarters.
Business Performance
In a challenging business and economic environment, Your Company
delivered a strong performance as all stakeholders helped the business fire on all
cylinders. Your Company embarks on a growth trajectory with the plan of Vascon 2.0. The
Company's qualified personnel and relentless efforts have begun to yield results in the
Company's performance. For any meaningful endeavour of expansion and growth, the key
prerequisites are a strong financial base and a robust balance sheet. Your Company has
been focusing its energies in the past few quarters on deleveraging its Balance Sheet
through a combination of internal accruals as well as disposal of noncore assets, Your
Company has generated positive cash flows, aided in part by the strong EPC business. Your
Company has strengthened its balance sheet by repaying its high costs debt during the
year, also reduced its debt by ' 98 Crores over the past two fiscal years with our total
gross debt standing at ' 157 Crores as of March 2022 as against ' 255 Crores as on March
2020. Of this ' 98 crore, the Company repaid ' 75 crore in Fiscal 2022.
Your Company stands strong with focusing on accelerating the execution
of order book supported by robust order intake, leading to better capacity utilisation and
better margin in EPC business in near future. This is validated in the ratings upgrades by
Acuite Rating & Research Limited (ARRL) on the credit rating for long term bank
facilities has been upgraded from BBB- to BBB and for short term bank facilities
has been upgraded from A3 to A3+.
EPC Business: The core strength of your Company continues to be the
EPC business that generated revenues of ' 413 crore with an EBITDA of ' 33 crore
translating into a 8% margin. Some of the key projects that were executed were Maharashtra
State Police Housing, PWD Raipur, hospitals at Kaushambi and Bijnor.
The order book of ' 1,832 crore underscores the confidence of our clients in our ability
to deliver, with only ' 58 crore of our order book coming in from internal sources. The
overall order book is 4.5-5x of our Fiscal 2022 revenues, providing strong visibility of
growth.
Your Company's focus on improving the quality of the order book has
resulted in over 85% of the order book currently comprising of government projects. This
not only provides an added layer of security, but also reinforces the Company's execution
capabilities.
Real Estate Business: Real Estate revenue stood at ' 50 crore in
Fiscal 2022. Your Company's key projects - Forest Edge & Windermere Bungalow have been
fully sold. The current focus would be on ensuring that unsold inventory will be
liquidated, albeit with positive returns.
There are few upcoming projects in Fiscal 2023 which will have overall
ticket size of ' 875 crore out of which Your Company will be sharing ' 530 crore out of
the total sale of real estate segment. Your Company continues to take a conservative stand
when launching new projects and will only choose to start new projects when conditions are
favourable.
Subsidiary Performance: GMP continues to deliver sustainable
performance with revenues of ' 194 crore in Fiscal 2022 and healthy gross margin of 33%.
The EBITDA came in at ' 17 crore at a margin of 9%. Your Company will continue to focus on
improving both the revenues as well as the efficacy of the business in the coming years.
Business Outlook
With a strong foundation being built, Your Company is committed to
further strengthening its balance sheet, while focusing on increasing the business and
executing projects on time. The strong and professional team that has been built has
demonstrated its ability to work in challenging conditions. While Global conditions
continue to be challenging, Your Company is confident of delivering strong growth based on
the business outlook that it sees.
Conclusion
I would like to extend our sincere gratitude to our employees, our
customers, partners and the Government for their contribution, directly and indirectly, to
our growth.
I also thank all the shareholders and all stakeholders for their
patience and continued support as the Company moves ahead.
Thank You
Siddharth Vasudevan Moorthy