Construction company HCC Concessions Ltd, a subsidiary of Hindustan Construction Company, has been able to secure a contract which is worth Rs 800 crore from the National Highways Authority of India. The project will include six-laning of Vadodara-Surat section of the NH8.
According to a statement released by the Hindustan Construction Company, the project that has been awarded to HCC Concessions Ltd include construction of new four-lane extra dosed bridge across the Narmada River in Gujarat.
The Nirmal Bang report
The company has been under pressure recently due to its ever increasing debt bills. Nirmal Bang research report reveals that HCC’s balance sheet would be under pressure due to the higher debt level, thereby restraining the growth of the core business. HCC reported a net loss in 4Q of FY12. It was for the third consecutive quarter that the company recorded a loss. For the year ending on March 31, 2012 the company witnessed net sales of Rs 8,157.63 crore.
The Nirmal Bang report feels that a possible nod by HCC to its CDR package will ease short-term cash flow, thereby improving project execution. However, it believes that HCC will be requiring some additional time to come out of its problems.
The period of concession for the project is 12 years, which includes a construction period of 30 months. The project is on a toll basis, which is under the National Highways Development Programme-V.
This project is part of the final stretches of the expansion to the six-lane capacity on NH8 that connects Delhi and Mumbai.
The company says that this will be the seventh project in HCC Concessions’ portfolio that includes six other NHAI concessions, one being annuity and five toll-based projects. It has reduced sales estimate by 14% for FY13 to factor in lower-than-expected revenue traction and hope for 6.5% growth in FY14.