SEL: Building Landmarks, Setting Benchmarks

Sadbhav Engineering Limited is positioned amongst the elite EPC companies in the country.Shashin V Patel, CMD, SEL, is positive of sustained business growth as they gear up to increase their Order Book with the many Government projects in the offing.

As one of the largest road developers in India, what best construction practices do you follow?

We have a very active internal learning and development team and we constantly send our employees to various training programs to keep themselves updated with the latest software and processes in our field of business. We have forged strong partnerships with banks and investors, and this enables us to import the latest technologies.

Despite the quality standards for road construction, we find that newly constructed roads get potholes within one year of their service; what are the reasons for this premature failure and how can this issue be resolved for a sustainable road infra?

There are many reasons for a road's premature failure – it could be due to water seepage into the pavement (bituminous) layer, which is almost always attributed to inadequate urban planning. Drainage releases from new establishments (alongside National Highways) on the roads lead to weakening of formation layer – which in turn causes premature road damage (potholes) once load in the form of vehicles come onto this weak formation.

At times, existing underground utility owner (Electricity/Water boards) dig/cross the trenches along the Highway, without proper layer-wise compacting, leading to water flowing in the pavement. Overloaded vehicles also damage the pavement as highways are designed for certain loading. Unsealed pavement defects also lead to potholes.

Proper design of drainage system alongside roads should prevent some of these problems. The utility owners should be given proper information of existing/underground utility so as to exercise precautions during maintenance. Also, sustainable infrastructure provision should be provided for utility ducts after certain lane kms. The local municipality should undertake drainage cleaning before the start of monsoons to prevent water stagnation.

What is your road map for sustainable growth of SEL and what is your current Order Book as regards major projects?

Our growth has been pretty impressive over the past 11 years. We have given our shareholders an average return of 31% per annum, while our revenue and profits rose at an average of 26-27% per annum. We have a very strong management and an equally competent operations team, which is capable of overcoming any challenges. Our management has a very clear vision of where we want to be in the future and this clarity helps us take the right decisions at all levels.

We have been continuously ramping up our capacities – investing in both new assets/machineries and new technologies. We treat our suppliers and subcontractors as partners in growth. Our employees are our best resources, and we ensure their continuous learnings. We have a strong 'core' which makes us sufficiently strong to increase our market share across all business units.

The coming years are going to be the golden years for our country's infrastructure. In FY18, NHAI awarded 7400 kms of road projects worth ₹122,000 crores as compared to 4,337 kms of road projects of ₹60,900 in FY17 – and this is going to further improve with plans such as Bharatmala on the cards. There is a lot of optimism in the market, and the banks have regained interest in financing HAM projects, where we are the market leaders.

As on Dec 2017 we have an order book of ₹132493 million. Order Book (incl L1) to sales ratio stands at 3.70 x FY18 revenue providing good revenue visibility. Our Order Book can increase thrice from here on if the government is able to achieve awarding as per the Bharatmala plan. We are waiting to see the outcome and are very positive that we will bag the maximum number of projects in the states in which we are strong and focused.

What milestones has SEL achieved to make it one of the largest infrastructure developers in India?

The company is engaged in Engineering, Procurement and Construction for Transport (including Roads and Metros), Mining and Irrigation sectors. We are also a major player in the development of roads and highways under Build, Operate and Transfer. We have the highest number of HAM (Hybrid Annuity Model) projects in India.

We have given our shareholders an average return of 31% per annum, while our revenue and profits rose at an average of 26-27% per annum. As on Dec 2017, we had an order book of ₹1,32,493 million.

Our roads are equipped with cameras and sensors to detect congestion and traffic blockages. We have smart and interactive lighting systems on our toll roads for optimal use of electricity with power saving. On some roads we have installed Highway Traffic Management Systems and Video Detection Systems for real time incident management.

Any plan for diversification into other areas?

We don't have any plans for diversification. We would like to maintain our focus on our current operations, though we are open to newer geographies, if can forge constructive partnerships.