2011-12 was most challenging, says chief
Construction major NCC Ltd has indicated that the company is optimistic of generating a top line growth of at least 10 per cent in 2012-13.
A.V.S. Raju, Chairman Emeritus, NCC Ltd, in his message to shareholders has assured that the company will ride over the rough patches with speed and certainty.
He described the year 2011-12 as one of the most challenging in existence.
A large number of external developments — reforms delay, tightening interest rates, high inflation and dearth of funds — knocked the wind out of the country’s infrastructure industry.
Large number of infrastructure sectors remained under-penetrated. He said, “At NCC, we resolved to adjust our sails and row harder, convinced that calmer waters are closer than where most people think.”
Describing the current situation as part of “tough times”, NCC stated it is marked with high inflation, high interest rates, policy paralysis, depreciating rupee, tightening liquidity, rising resource costs, declining industrial output, slowing consumption, land acquisition bottlenecks and environmental clearance delays.
The company’s answer is “tougher resolve” through rapid execution, aggressive approach to projects, strong order book, maximise resource utilisation, administrative consolidation, enhanced scientific project bidding and minimised exposure to unviable projects.
Managing Director A.A.V. Ranga Raju said, “In spite of a tough 2011-12 for the infrastructure sector, NCC bagged new orders worth Rs 10,117 crore, thereby, strengthening the revenue visibility for next 30 months.”
However, the Managing Director said that 2012-13 appears to be difficult given the instability that exists in the Indian economy.
The company management feels that the large planned investment in infrastructure would require significant capital mobilisation.
Banks, the dominant source of debt funding for infrastructure projects, would not be able to meet the sector’s increasing requirements given their limitations.