BUSINESS

• Incorporated in August 2008, PSP Projects Limited is an Indian construction business that provides a wide variety of construction and related services for industrial, institutional, governmental, government residential, and residential projects. Mr. Prahalad S. Patel, the main promoter, has been working in the construction sector for more than three decades.
• The business offers comprehensive EPC services along the whole construction value chain, including design, construction, MEP, interior design, and O&M services.
• With operations across Gujarat, Rajasthan, Karnataka, Uttar Pradesh, Maharashtra, and New Delhi, the firm is geographically diverse.
• The firm raised Rs. 211.68 crore upon its May 29, 2017, NSE and BSE listing.
• PSP Projects is India's second-fastest-growing small construction company. It has completed 200 projects as of December 2022, building a solid rapport with reputable clients and a track record of timely project completion, both of which have enabled it to secure repeat business from its current clients, which include sizable pharmaceutical, dairy, and public sector entities.
• The firm opened a precast factory in Gujarat in December 2021 intending to offer sustainable construction solutions and technology advancements that support captive consumption.
•  ₹5,075 crore are in the outstanding order book as of 9MFY23. In comparison to Rs.978 crore in 9MFY22, the business got its highest-ever order inflow of Rs.1,950 crore during 9MFY23, representing a 100% year-over-year gain.
• Revenue mix segment in Q3FY23, contribution from Government (37%), Institutional (22%), Gvt Residential (19%), Industrial(7%), Residential(10%), Precast(5%).
• Revenue Mix by Geography Gujarat generates 53% of revenues, which are followed by up 32%, Maharashtra 14%, and then Rajasthan at 0.5%.

SWOT ANALYSIS

STRENGTH

• Tracks record of timely project completion.
• Long-standing relationships with customers.
• Company with strong financials.
• Experienced Management.

WEAKNESS

• Working capital-intensive operations.
• Relatively moderate scale of operations.

OPPORTUNITIES

• The thrust of the government on urban infrastructure development.
• Strong order book.

THREAT

• Presence in a highly competitive industry.
• An increase in the prices of raw materials could impact the profit of the company.

    INFRASTRUCTURE SECTOR ANALYSIS

• Higher government investment in infrastructure in FY24 than was anticipated this fiscal year would drive a revenue rise of 17–20% for engineering, procurement, and construction (EPC) businesses.
• The fact that the government upped the sector's spending by a staggering 33%, from Rs 7.5 lakh crore to Rs 10 lakh crore, is obvious evidence that it is employing the infrastructure capex instrument to bolster the economy in the 2023–24 budget. Lifting a post-pandemic domestic economy out of the woods while simultaneously boosting private-sector capital expenditures is the goal.
• By 2025, it is expected that India's construction market would be worth USD 1.4 trillion. The construction industry in India has over 250 sub-sectors. Under the National Infrastructure Pipeline, the nation has a USD 1.4 trillion investment budget for infrastructure, with 24% going to renewable energy, 19% to roads and highways, 16% to urban infrastructure, and 13% to railroads. Modern, technologically oriented urban planning is expected to enhance the quality of life through initiatives like the ground-breaking Smart City Mission (target of 100 cities).
• It will be possible to travel more quickly thanks to the implementation of the PM Gati Shakti Master Plan for Motorways. In 2022–2023, the National Highway network would be expanded by 25,000 km at a cost of 20,000 crore. In addition, the development of more national road segments, as well as the approval and completion of several projects and fundraising initiatives, might have a big impact on India's road sector in 2022.
• Priorities for 2022 include the development of a comprehensive, multi-modal national transportation and logistics network, linkage with isolated and difficult terrains, decongestion of key areas on the road network, and progress with the voluntary automobile scrappage plan.
• By 2027, India's infrastructure industry is anticipated to expand at a CAGR of 8.2%. An additional source of infrastructure expansion potential has been the announcement by India, the US, Israel, and the UAE of the beginning of a quadrilateral economic forum in November 2021.
• The "Infrastructure for Resilient Island States" programme, on the other hand, has demonstrated a tremendous chance to enhance the lives of fragile countries throughout the world by allowing Indian infrastructure expansion to blossom in triple-folds. This opportunity was revealed in November 2021.

FINANCIAL OVERVIEW

QUARTERLY SUMMARY