Afcons Infrastructure Limited

Over the years, AIL has demonstrated its ability to execute large-scale complex projects in various domains – both in India as well as overseas (Africa, Middle East and South Asia). AIL has executed projects spanning across marine structures, surface transportation (road & railway), elevated and underground metro, hydro and underground tunneling and oil & as segments. Well-diversified and strong order book position AIL has an order book of ₹34,878 crore as on September 30, 2023 spread across mul

AIL has an order book of ₹34,878 crore as on September 30, 2023 spread across multiple contracts, which provides revenue visibility for the next 2-3 years. The order book is also well spread across different segments with Underground & Hydro Projects contributing about 24% of the total orderbook, followed by Metro & Urban Infrastructure (36%), surface transport (bridges, roads and railways- 12%), marine works (11%) and oil & gas segment (5%). In terms of geography, about 74% of the book is from

AIL is part of the Shapoorji Pallonji group with 99.48% shares being held by Shapoorji Pallonji and Company Private Limited (rated CARE BBB; Negative/ CARE A3) group on a fully-diluted basis as on March 31, 2023. The SP group is an extensive conglomerate with more than 155 years of operations and has business interests in several sectors such as real estate, infrastructure, coal mining, power, ports, roads, biofuels & agriculture , shipping & logistics, consumer products, financial services,

Profitability suspectable due to fixed price contracts Almost 30% of the order book is fixed price contracts thereby exposing AILs profitability to risk due to rise in cost of construction beyond expectations. Most overseas projects are fixed price contracts. Based on the past track record and experiences, AIL builds in contingencies for any cost overrun in projects. In the past there was cost overrun in a few of the projects which has impacted

Due to changes in design, delay in receiving certain approvals etc, there has been cost overrun is certain projects for whichthe company is yet to receive the contractual variation component. The company has initiated arbitration proceedings against such projects and significant portion of the debtors are stuck in various stages of arbitration and unbilled revenue. There has been no significant realization of such arbitration debtors and unbilled revenue (uncertified portion) since the last thre

The liquidity profile remains adequate with AIL maintaining liquidity buffer close to Rs.400 crore over the last five years (₹661 crore as September 30, 2023). While AIL raises funds through CP issuances to fund working capital requirements, the utilization stands NIL as on March 31, 2023. For the proposed CP issuance, liquidity is supported through expected cash coverage of 1.25x to be maintained against outstanding CPs in the form of free cash and bank balances, un-utilized working capital lim