Project delays shave Rs2,200 crore off IVRCL’s topline

Procedural delays in some of its projects have cost IVRCL revenues of about Rs1,500-2,200 crore last fiscal, according to chairman and managing director E Sudhir Reddy.

The infrastructure company’s standalone topline grew just 3% from 2010-11 to Rs5,625 crore and profit after tax fell 25% to Rs158 crore, due in part to an increase in interest charges and input costs.

Reddy said delays in executing the Rs1,705 crore Sion-Panvel and the Rs3,100 crore Goa-Maharashtra highways, a Hogenakkal (Karnataka) water project worth Rs237 crore, Andhra Pradesh irrigation works and a Rs460 crore hydel project in Koyna, Maharashtra, have adversely affected the company’s numbers.

Reddy did not quantify the impact of the same on the bottomline.

“As far as AP irrigation projects are concerned, we are going as per the availability and release of funds from the government. We should have done about Rs1,000 crore business there and we did just about Rs500 crore. Similarly, we thought of recording some Rs250 crore at the Sion-Panvel highway. But, we could not start on the project. Koyna, we lost about Rs100 crore. Overall (including the Goa-Maharashtra and Hogenakkal projects), the hit is between Rs1,500-2,200 crore,” Reddy told DNA on Monday. On a conference call earlier in the day, he said there has been a 6-8 month delay in starting work on the two highways.

Talking of approvals and land acquisition for its highway projects, Reddy said he hopes for quicker clearances from the National Highways Authority of India, given the changes in the last few months, including the replacement of Kamal Nath by CP Joshi as the minister for road transport and highways.

The company had an order book of about Rs23,979 crore at the end of March 2011.

The backlog is dominated by water projects, which account for 46%, followed by transportation at 26% and buildings at 23%, with the rest coming form other sectors.

About one-fourth of the order book is the company’s in-house projects.

IVRCL on Monday said it has bagged orders worth Rs893 crore for water, building, transportation and power projects.

The company’s water division bagged orders worth Rs294.74 crore from Sardar Sarovar Narmada Nigam, Gujarat, and Tamil Nadu Water Supply and Drainage Board, the company said in a statement.

All of IVRCL’s development projects except in real estate are under IVRCL Assets & Holdings.