SRM Contractors Limited - A niche Infra player

Stock Opportunities
4

Company Overview:

  • Name: SRM Contractors Limited (formerly SRM Contractors Pvt. Ltd.)
  • Industry: Infrastructure and construction, specializing in roads, bridges, tunnels, and slope stabilization.
  • Headquarters: Jammu, India.
  • Established: 2008.
  • Core Focus Areas: Road & bridge projects, tunnel construction, slope stabilization, hydroelectric projects, aerial ropeways, and civil infrastructure work for government and private sectors.

Key Services:

  1. Roads & Bridges: Construction and maintenance of roads, highways, bridges, including their widening, upgradation, and strengthening.
  2. Tunnel Projects: Designing and constructing tunnels, including avalanche protection tunnels.
  3. Slope Stabilization: Applying engineering techniques to stabilize unstable slopes.
  4. Other Civil Construction Activities: Housing, drainage, irrigation, flood control, and other infrastructure projects.

Key Competitive Advantages:

  • Proven Track Record: Successful execution of projects in difficult terrains such as Jammu & Kashmir, Ladakh, Uttarakhand, Himachal Pradesh, and Arunachal Pradesh.
  • Strong Equipment Fleet: Owns over 100 major pieces of construction machinery, reducing reliance on third-party suppliers.
  • Geographical Focus: Concentration on specific regions (Jammu & Kashmir, Ladakh, Uttarakhand) for better efficiency and profitability.
  • Experienced Leadership: Led by Dr. Sanjay Mehta (MD) with over 16 years of experience in the infrastructure sector.

Management Team:

  • Promoters:

    • Dr. Sanjay Mehta: Managing Director, with 16+ years in construction.
    • Ms. Ashley Mehta: Non-Executive Director with a background in Civil Engineering.
    • Mr. Puneet Pal Singh: Whole-time Director, focusing on construction activities.

  • Key Management:

    • Rupesh Kumar (CEO): 28 years of experience in large infrastructure projects.
    • Aashni Mahajan (CFO): Chartered Accountant with finance expertise.
    • Arun Mathur (Company Secretary): Experienced in corporate governance and compliance.

Financial Performance:

  • FY 2024 Highlights:

    • Revenue from Operations: INR 34,242.1 lakhs (YoY growth of 14.03%).
    • EBITDA: INR 4,162.4 lakhs (EBITDA Margin: 12.2%).
    • Profit Before Tax (PBT): INR 3,461.0 lakhs (PBT Margin: 10.1%).
    • Net Profit (PAT): INR 2,696.6 lakhs (PAT Margin: 7.9%).
    • Debt Reduction: Significant reduction in debt post-listing, with a Gross Debt-to-Equity Ratio of 0.16 as of Sep 2024.

  • Q2 FY25 Performance:

    • Revenue from Operations: INR 9,524.7 lakhs.
    • EBITDA: INR 1,518.0 lakhs (EBITDA Margin: 15.9%).
    • PAT: INR 1,034.6 lakhs (PAT Margin: 10.9%).
    • Earnings Per Share (EPS): INR 4.51.

Order Book and Projects:

  • Order Book (as of 30th September 2024): INR 1,668.31 crore.

    • Segment-wise: Roads & Bridges (48.56%), Tunnels (14.19%), Slope Stabilization (37.03%).
    • Geographical Distribution: Jammu & Kashmir (41.4%), Uttarakhand (21%), Himachal Pradesh (16%), Ladakh (10%), others.

  • Ongoing Projects:

    • Roads & Bridges: Akhnoor Poonch Pkg – VII (MoRTH).
    • Tunnels & Caverns: Hanle (BRO), Arunachal Pradesh (BRO).
    • Slope Stabilization & Others: RE Wall in Sumber, J&K.

  • Tender Pipeline: INR 2,743 crore.

Debt Profile and Credit Rating:

  • Long-Term Debt: Reduced from INR 2,573 lakhs in FY24 to INR 2,270 lakhs in H1 FY25.
  • Short-Term Debt: Decreased from INR 2,186 lakhs in FY24 to INR 1,428 lakhs in H1 FY25.
  • Credit Rating: Upgraded from CARE BBB to CARE BBB+ by CARE Edge Ratings (as of September 2024).

Investor Presentation

First - Published on 29/11/2024

Market Cap 773cr

Disclosure: Invested.