The Indian government has prioritized infrastructure development, believing it will have a multiplier effect in stimulating economic growth. The government’s commitment to this sector is clear, as it consistently increases its budgetary allocation for infrastructure development.
In any developing nation, the onus to execute crucial projects comes on the shoulders of vital executing players who value relations, possess the art of turning vision into a reality, and understand the importance of applying the best standards of practice at every level. India is home to more than 1,75,000 Infra companies and contractors including many global prestigious infra-engineering brands. Every year we see new players joining the band of the elite infra-engineering club. J Kumar Infraprojects Ltd. is one such entity that has come up in recent years to join the list. Headquartered in Mumbai, J Kumar Infraprojects Ltd. is a work home to more than 7,000 employees across the nation.
“There is no substitute for hard work”
The wisdom is not unknown to most people but in reality, is applied by only a few. Founded in 1980 by Jagadish Kumar M Gupta, a real estate company has turned out to be a Multi-Billion (INR) Infra entity in the past few years. Rooted in humble beginnings and bootstrapping with very little capital in hand, J Kumar Infraprojects Ltd. landed its first civil works contract worth Rs 15,000 in 1980. 28 years later, the entity went for its first IPO in 2008 & got Listed on NSE/BSE giving the success mantra Dream Big & Work Harder a new face. Getting the Class I-A civil contractor registration under the Maharashtra Ministry of Public Works at a very early stage granted the entity access to various semi-governmental and other governmental contracts, primarily in relation to infrastructure and civil works contracts, including road flyovers, bridges, irrigation projects, commercial buildings, railroad buildings, sports complexes, and airport contracts.
J Kumar Infraprojects Ltd. now serving the industry for more than 40 years and has emerged as one of the very credible infrastructure construction companies in India. Every brand has a vision and an ideology to follow. One can understand the brand closely if one understands the mind behind it.
In one of the interactions, when asked about the reason for this astounding success, The veteran and founder Mr Jagadish Kumar replied: “No project is big or small. Once you’ve embarked on a project, give it your all. Never settle and never hesitate. ‘Now’ is the perfect time to do something worthwhile”. Clearly, his hands-on approach, combined with an unwavering belief in his own ability to successfully complete projects on time, has guided this organization
Focused areas in the Infra domain
Metro works in many of the metropolitan cities in India by them have led to a staggering 54% contribution in terms of total revenues (Rs 3,527 crores) clocked by J Kumar Infra for the financial year 2021-22. While metro works are the backbone; Roads, bridges and flyover works have also contributed to an astounding 41%. The trend is expected to continue as metro works’ contribution further improves to 60% in the total share of the revenue available in the pipeline (Approx. Rs 12,000 crores).
Glancing at the future, the Government of India is been putting its resources in the place to fast-track its metro projects. As per the National Infrastructure Pipeline (NIP), Over the next five years, it is intended that 1,500 km of metro rail networks, including Rapid Rail Transit System (RRTS) projects, be built in a number of different cities with a whopping expenditure of Rs 3 trillion (out of Rs 111 trillion sanctioned budget). Over 600 million Indians are expected to live in cities within the next ten years, requiring the expansion of metro rail systems. Being one of the few companies capable of undertaking these projects, this trend will catalyze J Kumar’s growth.
All the significant operations/revenues of the company are dedicated to 4 major Geographical regions in India Maharashtra: 76%, Delhi: 22%, Uttar Pradesh:1%, and Gujarat: 1%. The proportion is expected to remain the same for the projects under pipeline.
- To build an entire Elevated Station with precast elements
- To bring Straddle carrier in India launchhing girders
- To introduce CPC in a single piece at Mumbai Metro Line 06
- of its kind in U/G Metro work wherein track change crossover permanent lining done with shotcrete
- enterprise to construct cross passages connecting two tunnels by Box Pushing method
- Accommodated the smallest metro station in the available length 156 meters for Delhi Metro
To better understand the company we looked into the key financial indicators which suggest prudent and stable financial management measures are in place to maintain financial stability with a consistent increase in revenue and order book. The company is net-debt-free and has reduced its gross debt with the debt-equity ratio standing at just 0.21x; suggesting a healthy and improving margin despite increased revenues.
Revenue growth for the past 5 financial years:
EBITDA for the past 5 financial years:
Cash profits after tax has remained consistent at approx. 10% for the last 5 F.Y’s. Since government bodies are the main source of work and revenues for J Kumar Infraprojects Ltd., the working capital cycle has remained at 120 days. Having said that, there is a substantial increase in asset efficiency as the Asset turnover has increased by approx. 1.5x in F.Y 2021-22.
Returns have regained a slightly better position to pre covid levels as the same has been pinned by the key indicators (ROCE, ROE, and EPS).
EPS comparison for the past 5 F.Y’s:
ROCE comparison for the past 5 F.Y’s:
Market cap for J Kumar Infraprojects is around Rs 2,060 crores plus (initial IPO Rs 72 crore) with the share price trailing between Rs 260-300 and total assets standing at Rs 2,518 crores. The performance at the stock exchange is impressively above par as compared to the Infra companies falling under the comparative parameters.
J Kumar Infra with a CSR budget of Rs 4.10 Crore has contributed specifically in two areas; Education and Healthcare. The cities covered are Leh Ladakh, Mumbai and Nagpur.