ITD CEMENTATION INDIA LIMITED
Know the Company
ITD Cementation India Limited (ITD Cem) is one of the leading Engineering and Construction companies in India with special focus on Maritime structures, Airports, Dams and Tunnels. The company was incorporated in 1978 at Mumbai, as CemIndia Company Limited. In 2004, name of the company changed to ITD Cementation India Limited, after the acquisition of 80.3% stake in the company by Italian-Thai Development Public Company Limited (ITD Thailand). Presently, 46.6% of the company’s stake holdings is by Italian Thai Development Public Company Limited and 14.42% stake by FIIs. As of March 2023, ITD Cem have a strong 14,545 employees base, including 2,398 permanent employees and 12,147 contractual personnel workforce. The company is having project works across 15 states in India and neighboring countries including Bangladesh, Myanmar and Sri Lanka, etc.
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Strengths
ITD Cem has a well-diversified presence across the construction space that spans over, Metro Rail, Airports, Buildings, Hydro-electric Dams, Power plants, Tunnels, Pipelines, Jetties, Deep-sea ports & Marine works, Highways, Expressways & Bridges and mining sectors, etc. ITD Cem’s parent company have over ninety years of experience and outstanding track record in execution of EPC sector. The company always leverages its parent’s expertise to deliver a variety of large and complex projects.
The company’s dedication to carrying on the globally renowned benchmarks in quality management systems has been awarded it with ISO 9001:2015 (Quality Management System), ISO 14001:2015 (Environmental Management System) and ISO 45001:2018 (Occupational Health and Safety Management System).
Prestigious projects under construction
ITD Cem is well known for its exceptional capabilities and commitment to executing extraordinary complex projects. With a track record of expertise spread across various sectors, it has successfully secured and executed a wide range of prestigious infrastructure projects.
Company’s ongoing major construction projects are:
-Chennai Underground Metro Project: ITD Cem has been awarded the construction of two underground metro packages (i.e. UG01 and UG02) of Chennai Metro Line 4, Phase-II by Chennai Metro Rail Limited. UG01 involves the construction of an 8.1 km tunnel and four underground stations. Work of UG02 also involves the construction of a 7.99 km tunnel and four underground stations.
-Ganga Expressway Project: ITD Cem has been awarded the construction of the Group IV section of the six-laning expressway road project in Uttar Pradesh. This project will connect Unnao to Prayagraj, spanning a length of 157km, which is one the largest single order for the company, so far.
-Bengaluru Underground Metro Project: The Company has also secured an order to construct Reach 6, Phase-II of the Bengaluru Underground Metro Rail Project from Bangalore Metro Rail Corporation Limited. The scope of work includes the construction of 6km of tunnels and four stations namely, Tannery Road, Venkateshpura, KG Halli and Nagawara.
-Udangudi Project: ITD Cem has been awarded the construction of a captive coal jetty with unloading facilities and a pipe conveyor for the Udangudi Supercritical Thermal Power project in Tamil Nadu, which was awarded by Tamil Nadu Power Generation and Distribution Corporation Limited. The brief scope of work involves the construction of an 8kmlong approach trestle, an island breakwater of 915m to protect the jetty, a 550m-long offshore jetty, a coal handling system and associated electrical works.
-Sivok Rangpo Railway Tunnels: ITD Cem is constructing a railway tunnel of 17.77km from Sivok to Rangpo (border of West Bengal and Sikkim), that has been awarded by Ircon International Ltd.
-Trichy Airport: The company is executing the construction of the terminal building at Trichy airport in Tamil Nadu, awarded by the Airports Authority of India as part of its airport modernisation program.
-Steel Bridge Over River Ganga: In a Joint Venture with Braithwaite Burn & Jessop Construction Company Ltd, ITD cem is constructing a steel bridge over River Ganga in Allahabad, which was awarded by Rail Vikas Nigam Limited. The contract work involves the construction of a well foundation and steel superstructure with the total length of the bridge being 1,935 metres and has 24 spans of 80.6 metres.
-Sikkim University: The Company is constructing buildings for Sikkim University Phase I, Package II at South Sikkim on an EPC basis. The project is being executed at the height of 4560 Ft above the sea level. The work includes the construction of a teaching laboratory, a hostel for students’ along with the entire campus development including electrical and mechanical works.
Substantial Order Flow
ITD Cem has a consolidated order book of Rs 20,044 crore till March 2023, out of this: it secured orders to the tune of Rs 8,000 crore during the March quarter. In addition to this, in Sep,2023, company has secured a marine contract worth approximately Rs 3,290 crore and another contract for Rs 1,001 crore on December,2023 for the Civil & Hydro-Mechanical works of a 500 MW Hydel Power Pumped Storage Project in Andhra Pradesh. At present, company is having approximately Rs 29,000 crore work orders in its hands. In addition to this, about Rs 10,000 core of job also is under the pipeline.
Significant part of the company’s order book is consisting of two large orders of Chennai metro project for Rs 3950 crore and Ganga Expressway Project worth Rs 4850 crore, which has been received from Adani Road Transport Ltd. However a significant part of the order book are at very early stages of execution, so meaningful revenue recognition from these projects will be start from Q1FY 24-25 onwards only.
Strong Financials and Balance Sheet
The company has reported a robust performance in the September quarter with an income of Rs 1,610 crores as against Rs 1,035 crores, growth of 56% on a YoY basis. At the same period EBITDA reported at Rs 172 crores, grew by about 78% and net profit stood at Rs 54 crores as against Rs 20 crores with an increase of about 168%. Company’s balance sheet is continuing to be de-leveraged, as of December 2023, its net debt to equity ratio is about 0.34 times.
Outlook
The Indian Civil Construction industry is experiencing wonderful growth since the past couple of years, supported by the Central Govt’s various steps to the development of the infrastructure sector, which they considered as the foundation for the status to become the third largest global economy by 2030. Between FY 2024 and FY2027, the Central Govt plans to invest US$ 1.5 trillion in infrastructure through National Infrastructure Pipeline (NIP) which will be a boost for the companies from this sector. Increased capital earmarked in the last few Union Budgets also provides a strong boost for the development of world class infrastructure in India, which all gives immense growth opportunities for the civil construction companies.
To reduce the strain on public transport systems, the Indian government has undertaken an initiative to promote urban rail as an alternative mode of intra-city transportation in high densely populated cities. As a part of this, the Union Budget 2023-24 allocated Rs 19,518 Crores towards the development of metro rail projects. Presently, more than 20 cities are undertaking the construction of metro and regional rapid transit systems. Under NIP, the Government has identified metro project opportunities worth US$ 73 Billion. ITD Cem has strong presence in the development of metro rail projects in several cities in India including of elevated and underground metro works such as tunnels, station buildings and track works.
The government has taken on several steps to improving Port efficiency and connectivity as it is considered the most cost-effective method of transportation of goods. Under the Sagarmala Project, which targets to reduce logistics cost for EXIM and domestic trade with minimal infrastructure investment, the GoI has announced a long-term investment plan of US$ 82 Billion. ITD Cem is one of the foremost companies in the development of maritime structures and has a track record of execution of projects in most of the ports across the country, also benefitted.
Aviation sector also one of the fastest-growing sectors in India. The aviation infrastructure has been expanding with modernization and development of new Air Ports. Airports Authority of India and other airport developers have targeted capital outlay of Rs 98,000 Crores in next five years for expansion and modernization of existing terminals, new terminals and strengthening of runways and other developmental activities. The Government of India has granted in-principle approval for setting up 21 new green-field airports. This industry scenario also gives adequate growth opportunity for the company.
Risk Factors
ITD Cem is engaged in a sector with the presence of numerous small and medium players that heightened competition in the industry. Company needs to win projects through competitive bids, where pricing, execution experience and financial capability are important factors. However, the company’s proven track record of executing complicated infrastructure projects, especially with support of the parent, mitigates this risk to an extent.
Any delay in receiving of funds from the counterparty or design approval can adversely affect the progress of the projects, which may lead to revenue losses for the company.
Sector: Industrials
Market Price: Rs. 287.65 as on today
FV: Rs 1/-
Stock Name: ITD Cementation India Ltd
BSE Code: 509496, NSE Code: ITDCEM
Market Cap.: Rs 4907 Cr
Book Value: Rs. 77.2
Segment: Civil Construction
Incorporation: 1978
Headquarters: Mumbai, India.
