It is cRegarding debt of DBL it around 3000 crores of net debt . Now we can’t compare the construction business dynamics with other industry . Second we need to the components of debt and inflow of money to offset the debt . Half of the debt company took is for the machinery which in long term a big asset and will offset the debt taken on this account . In 2017 company had sold some of its 24 HAM projects to Shrem Group and and a part of payment he is about to receive. Debt to equity ratio is well placed if you you compare with the rest of individual industry. For further improvements on this ratio Company has to increase the denominator i.e Equity .The HAM projects handling is not a cakewalk That is the real differentiation which make this company among good player in this field . For HAM project one need to invest 60% cost and in case of pure road project 100% cost borne by govt and company do the construction .
What I observed that DBL is well placed with in it’s sector and changing gears to move from HAM to pure model meaning while acquiring the assets which she will use in future.
Overall this industry is Capital intensive and some time to recover own money takes time like BOT roads company is selling its HAM projects.the proceeds from sale it might use to pay off debts and part of it may be used in contesting Bid for new projects as government has floated around Rs 1 lakh crore worth of road projects currently. However the order book is more than
Double than last year . The interesting angle is that it is an established player in irrigation, urban development and mining space this area is yet to Tap to full potential.Over the years DBL has DBL has developed core strengths like fleet/equipment management, bulk material handling, high volume excavation & earthwork, supply chain management etc. in its infrastructure and construction business. The DBL expertise enjoys close synergy with the mining business.
Regards