Markolines Pavement Technologies - Making roads better

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Markolines Pavement Technologies Ltd.

About

  • Incorporated in 2002, Markolines Traffic Controls Limited is a Highway Operations and maintenance (O&M) service-providing company.

  • Vast experience of 19 years

  • The company’s operations are mainly divided into-

  • Highway Operations

  • Highway Maintenance

  • Specialized Maintenance Services

  • Specialized Construction Services

  • Group Companies

  • Markolines Infra Pvt Ltd - Engaged in toll management by supplying manpower.

  • Markolines Technologies Pvt Ltd - Involved in research and development and provides support for major maintenance such as material analysis, material mixes, proportions, and quantities

Services

  • Highway Operations - Toll operations, Route patrolling, Incident Management
  • Highway Maintenance - Major maintenance (CIPR), Preventive Maintenance (Microsurfacing), Routine maintenance
  • Specialized maintenance Services - Full Depth Reclaimation
  • Specialised Construction Services - Soil stabilization, Tunnelling

Clientele

Financials

  • Increase in Trade Payables - On account of MSME (less than a year)
  • Increase in PPE - Microsurfacing Paver, Bitumen Surfacing, Equipments
  • Increase in Investments - Investment in Unique UHPC Markoline LLP
  • Increase in Revenue - Diversified product mix causing revenue increase, Majority of the revenue comes from Major maintenance (70%), Toll operations (15%) & Specialised Construction (5%)
  • Decrease in Finance Costs - Multiple debt payments, however, heavy interest cost due to unsecured loans

Key Pointers

  • India’s largest O&M company in highway sector
  • Operated highest number of outsourced toll projects
  • Order book 578Cr vs 270Cr MCAP
  • Another 300Cr order is in the pipeline
  • Reputed clientele
  • Has bid for 1 main board company in NCLT (ILF&S)

Key Strengths

  • Strong order book and long standing customer relationships
  • Healthy EBITDA margins
  • Strong credit metrics
  • Industry tailwind support
    Self owned machinery and equipment

Business Strategy

  • Continue focusing on our Operations & Maintenance (O&M) business in highways sector and enhancing execution efficiency
  • Selectively expand our geographical footprint
  • Diversified portfolio of services offered
  • Huge market size of 10000Cr every 5 years (Government makes more than 15000km roads every year - Per km road construction cost is more than 15Cr)

Below are the descriptions of the diversified services for further understanding

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DISCLOSURE - Not invested. Not an investment advice. Only sharing my research analysis.

4 Likes
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I am invested here.
Please do highlights the Cons separately: (Unsecured loan clubbed with Decrease in Finance Costs)

Company is into heavy wc industry due to Govt customers or private customers taking works from Government. Resulting into Receivables going above 3 years. 10 cr as on 31.03.2023.

Company had a rights issue which failed. (High price and bad timing. February 2023 where a downtrend in small companies was there till March 2023)

Company has unsecured loans with very high interest rates. If directly linked with money stuck in those long period receivables. A recipe for disaster.

Credit agency report issued non co-operation from management.

Overall, the company is good and Infra boost from NHAI is directly beneficial to them. They also have good orders in hand and India Equity Fund has also recently invested and points mentioned above are sufficient enough to get a view on the company.

5 Likes