Sadbhav Engineering Ltd - Stock Valuation and Financial Performance

Sadbhav Engineering was incorporated in 1988 as a private company in the state of Gujarat, by Shri Vishnubhai M Patel, having rich experience in the construction field since 1968, The company took over the running business of Bhavna Construction Company with effect from October 1,1989.  Sadbhav focuses on the roads, mining and irrigation sector and aggressively participates in the BOT opportunity in the road sector. It has chosen to adopt an integrated approach of developing & constructing road projects.

In the past one year the company has been awarded three BOT projects in consortium. It has also been awarded the Certificate of Excellence in Productivity, Quality, and Innovation & Management by the Institute of Economic Studies, New Delhi.The company has been awarded one BOT project for Strengthening and Widening of Ahmedabad ring road through a consortium with Patel Infrastructure. The total project cost is Rs. 560 crore. The Ahmedabad Ringroad infrastructure limited, a Special purpose vehicle (SPV), has been incorporated for the execution of the said project.

Sadbhav Engineering mainly operates in three core businesses namely roads, mining and irrigation-

Roads Sadbhav forayed into the road sector in 1995 and has established a good reputation for itself in the industry. It has executed several projects for NHAI and the State Governments of Gujarat and Karnataka. It has also worked with many industry stalwarts like L&T, HCC, Punj Lloyd and Gammon. The scope of work largely encompasses constructing, widening and strengthening of roads and highways. Currently, around 85% of the company’s revenue comes from this sector.

Mining Sadbhav commenced mining operations in 1990 by executing rock excavation of copper at Madhya Pradesh for L&T . This was followed by several other projects which largely involved work for GIPCL. It executes projects involving excavation of overburden and lignite. At present, the operations are largely concentrated in the mines located in Gujarat.

Irrigation  Around 9-10% of the company’s revenues come from projects in the irrigation sector. Over the past 17 years, the company has successfully executed construction of earthen dams, canals, syphons, remodeling and improvement of canals. The  rich experience and execution capabilities of the company have enabled them to participate over various phases, in the execution of the NMC, which is the world's largest concrete lined canal, having a capacity of 40,000 cusecs.

Major clients of the company

• National Highway Authority of India, New Delhi.
• Executive Engineer State Road Project Dn.Kashi Vishwanath Plot Rajkot.
• L & T, Kolkata.
• Ahmedabad Urban Development Authority.
• Majalgaon Right Canal Divn. No 4 Parli, Vaijnath.
• Sardar Sarovar Narmada Nigam.
• Grasim Industries, Haveri, Karnataka
• Gujarat Industries Power Company Mangrol, Surat

Milestones Achieved   

• 1989-90 - First main canal construction project (reach km 108 to km 127) worth Rs 55 crore received from Sardar Sarovar Narmada Nigam.
• 1992-93 - Granted the status of ‘Deemed Public Company’ by the Registrar of Companies, Gujarat on the turnover criterion.
• 1992-93 - Received first road project work order as a nominated Sub-contractor for strengthening and widening of Sambalpur-Rourkela Road to the tune of Rs 32.78 crore from Larsen & Toubro (ECC Construction Group).
• 1994-95 - Received first Canal Syphon work order to the tune of Rs 55 crores for constructing canal syphon across river Vatrak on Narmada Main Canal.
• 1994-95 - Received Sunsari Morang Irrigation Project work order to the tune of Rs 323 lakh from Larsen & Toubro for earthwork at outside India (Biratnagar-Nepal) and completed the same successfully.
• 1995-96 - Received first mining excavation work order from Gujarat Industries Power Company, Baroda to the tune of Rs 8.84 crore
• 1996-97 - Successfully completed construction of strengthening and widening of Sambalpur-Rourkela Road received independently by the company from L&T.
• 1996-97 - Received first road project work order in the private sector from Reliance Industries, Jamnagar for constructing roads in their township and refinery site at Moti Khavdi, Jamnagar.
• 1996-97 - Registered an increase of 74% in turnover (from Rs 3477 lakh to Rs 6068 lakh) coupled with increase of 86.31% in the net profits (from Rs131.99 lakh to Rs 245.91 lakh).
• 1997-98 - Awarded first large mining contract for overburden removal at Vastan Lignite Mines (Dist. Surat) to the tune of Rs 138.08 crores from Gujarat Industries Power Company.
• 1997-98 - Received first time independent roadwork order for widening to four lanes of NH-8A at Bhachau (Kutch) to the tune of Rs 31.61 crore from NHAI.
• 1998-99 - Crossed the turnover of Rs 100 crore for the first time since incorporation.
• 1999-00 - Received four work orders to the total tune of Rs 151 crore from Sardar Sarovar Narmada Nigam for construction of canal.
• 2000-01 - Successful completion of rehabilitation of Kakrapar Left Bank Main Canal RS. 0.00 to 45.5(Ch. 0.0 to 13.87 km Package I & II) to the tune of Rs 18.25 crore in a record period of 75 days.
• 2000-01 - The company has successfully executed the work to the tune of Rs 138 crore for removal of overburden/lignite excavation at Vastan Lignite Mines to the utmost satisfaction of GIPCL and on the basis of satisfactory execution of work, further contract has been granted for two years thereby the work has been increased to the tune of Rs 257.26 crore.
• 2001-02 - Crossed the turnover of Rs 200 crore for the first time.
• 2001-02 - Awarded independently work order for rehabilitation and upgrading of road project to the tune of Rs 95.90 crores (Package KU-1) from Kishangarh to Nasirabad in Rajasthan State from National Highways Authority of India.
• 2001-02 - Completed first Canal Syphon across River Vatrak.
• 2002-03 - Successfully completed construction of canal Syphon at ch.314.696km(Package 1/2) on River Pushapavati and Canal Syphon across the River Khari on Narmada Main Canal at 321.115km (Package 2/2) which was awarded by SSNNL
• 2003-04 - Earned bonus from NHAI due to early satisfactory completion of work relating to rehabilitation and upgrading to 4/6 lane divided carriageway for Kishangarh – Nasirabad – Bhilwara – Chittorgarh – Udaipur Section of NH-8, NH-79 and NH-76 Package (KU-1) from Kishangarh (Km 363.0 of NH-8) to Nasirabad (Km 15.0 of NH-79) in Rajasthan State.
• 2004-05 - Received four work orders from SSNNL to the total tune of Rs 255.84 crore for constructing one each for Narmada Main Canal, canal syphon, and two for canal earthwork
• 2004-05 - Awarded East-West Corridor Project - Rehabilitation and Upgrading of Gagodhar-Radhanpur Road Section of NH-15 to the tune of Rs 284.04 crores in joint venture with Jillin Corporation, China.
• 2005-06 - For the first time successfully received the award of concession for ‘Improvement, Operation and Maintenance of Rehabilitation of Strengthening of existing 2 lane road and widening to 4 lane divided carriageway from Km 539.500 to Km 440.000 (Vadape-Gonde Section) of NH-3 in Maharashtra on Build, Operate and Transfer (BOT) basis in Joint Venture with Gammon India and B.E. Billimoria & Co. The share of the company in the Joint Venture is 20%.
• 2005-06 - Received ISO-9001-2000 certification.
• 2005-06 - Awarded the Certificate of Excellence in Productivity, Quality, Innovation & Management by the Institute of Economic Studies, New Delhi.
• 2010-11 - Awarded Multai-Chindwara-Seoni and Narsinghpur-Amarwara-Chindwara-Saoner - cash contract of Rs 14, 113 million