Hindustan Construction: Orders Backlog Worth ₹12,675 Crores & Project Updates

“In Q3 the daily average PCUs grew by 9% while the revenue was at 32.2 crores. Construction is expected to be completed in Q2 FY24 and once it is completed the toll rates will be increased by 45%. In this business, we are evaluating new opportunities in the highway sector, and we do believe that the government will put a lot of focus going forward on the PPP project module also which we will be evaluating on a case-to-case basis.”
– Arjun Dhawan, Executive Vice Chairman

Stock Data

Ticker	HCC
Exchange	NSE & BSE
Industry	Infrastructure

Share Price

Last 1 Month	-4.2%
Last 6 Months	-0.1%
Last 12 Months	-14.6%

Hindustan Construction Business Basics

Hindustan Construction Company Limited has defined India’s progress since 1926 and is a pioneer in the infrastructure industry. The company’s founder, Seth Walchand Hirachand, is widely regarded as the father of the Indian transportation industry. HCC generates revenue primarily from construction projects. The company aims to leverage its expertise in engineering, procurement, and construction to deliver high-quality projects on time and within budget. The company also has a subsidiary that provides engineering services and another that is involved in real estate development. HCC’s customers include government agencies, private sector clients, and international organizations. The company has constructed several well-known projects, including the Bandra Worli Sea Link in Mumbai and the Bogibeel Bridge rail-cum-road bridge. HCC has constructed 4,036 lane kilometers of highway, 365 kilometers of tunnels, and 60% and 26%, respectively, of India’s installed nuclear and hydropower capacities.

Q3 FY23 Financial Performance

Hindustan Construction Company reported a 21% year-over-year drop in Revenue from operations, to ₹2,034.8 crore from ₹2,580.14 crore. The third quarter’s other income contributed ₹11.8 Crore to the Total Revenue. Meanwhile, the Loss Before Tax was down to ₹338.79 Crore from the Profit of ₹93.28 Crore in the same quarter previous year. In Q3 FY23, the company reported a loss of ₹287.85 crore, compared to a profit of ₹66.24 crore in same quarter previous year.

Order Book & Business Development Strategy

Hindustan Construction Company has bids for projects worth nearly ₹9,500 crores in Q3 FY23 that are being evaluated. The company has won the contract for the Mumbai Ahmedabad High speed rail package C1, which will be stationed at BKC, by submitting the lowest bid. The bid placed under a joint venture between Hindustan Construction Company & Megha Engineering and Infrastructures which emerged as the lowest bidder with a bid of ₹3,681 crore (HCC’s share is at 1,288 crore).
The company’s order backlog as of Q3 FY23 is ₹12,675 crores. The transportation industry has the largest order backlog, followed by the hydro, water, and other industries. The smallest portion of it belongs to the Nuclear & Special sector.

Commenting on the company’s Business Development strategy, the management said,
“We will continue with our business development strategy to focus on high value jobs in Hydro and urban infra space where the company has lot of capabilities. We will also continue to consolidated our order booking in existing geographies like Maharashtra, Gujarat and some other states. Plus, we will continue with our strategic collaborations to mitigate risks on high value jobs and also improve the winnability.”

Updates For Ongoing Projects

The Anji Khad Bridge in Jammu and Kashmir, India’s first cable-stayed bridge, has had 36 of its 47 segments launched, with only 9 segments remaining. Another railway project, the T49A tunnel work for IRCON, has seen the majority of its work completed, including the lining of the main tunnel, the station yard, and the access tunnels. Construction of this T49 tunnel was divided into two packages by IRCON International, T49A (5.1 km) and T49B (7.9 km), with HCC carrying out T49A.

Regarding the metro projects, the station construction on the Delhi metro DC-06 project is going very well and the tunneling is finished. The task should be finished by November or December of this year, according to the company. The majority of the work at the Mumbai Metro is moving along with the 4 stations. According to the management, the CST is nearly 88% finished, Girgaum is nearly 40% finished, Grant Road is 60% finished, and Kalbadevi is 70% finished.
While the Imphal road, which is another transport sector project is progressing well and the road topping works are in progress in valley as well as in the plain sections. For this project, the company is utilizing various techniques and technologies. Regarding the Mumbai Coastal Road, the majority of the seawall has been completed, and work on the bridges has begun. The fishermen’s issue regarding the requirement of a larger navigation span of 120 meters was resolved and approved by the government.

Almost 82–83% of the Tehri PSP project and more than 95% of Nikachhu project are completed, according to management. The HCC’s Sawalkote Hydroelectric Project, which has provided access to the larger Sawalkote HEP. The tunnel’s overt lining is finished, and the curved portion’s gantry erection is underway. On the Atomic Power sector, Rajasthan’s unit 7 & 8 work is in progress for the aerated tile works in the containment building.