HERE IS WHY
✓ The surge in inquiries suggests an unprecedented boom in the construction sector, in 2024-25
✓ Healthy Order Book totaling about INR 3005 crores across various segments
✓ The potential to add another 1500 crores to the order book by March 31st
✓ Expanding its presence in the railway sector
NSE: BLKASHYAP | BSE: 532719
Price: 81.50
Analysis of the Construction Sector in 2023 and Outlook for 2024
The construction sector, including BL Kashyap, witnessed substantial growth in 2023, with a consistent 12-15% increase across all industry segments.
Looking forward to 2024, there is an optimistic outlook as the company has observed a significant surge in inquiries over the past several months, leading to a projected growth of 12-15% in the next three to five years.
This growth is fueled by factors such as advancements in real estate, residential projects, government infrastructure investments, and manufacturing improvements.
Current Order Book Position and Future Expectations
BL Kashyap’s unexecuted orders currently stand at approximately INR 3005 crores across various segments.
Ongoing negotiations for additional orders could potentially contribute another 1500 crores to the order book by March 31st.
These negotiations involve both repeat and new clients, indicating a promising trajectory for the company’s order book in the near future.
Details on Key Projects
Sabarmati Multimodal Transport Hub
BL Kashyap successfully completed the Sabarmati multimodal transport hub in Ahmedabad, a design and build project for the National High-Speed Railways Company Limited (NHSRCL). The project not only met but exceeded expectations regarding quality and finishing.
Gomti Nagar Railway Station
Another significant project for the company is the Gomti Nagar railway station, a design and build EPC contract. It is expected to reach 90% completion by December 31st, with full operational readiness projected by March 2024. Additionally, the company is actively involved in the development of the Bijwasan railway station.
BL Kashyap’s Expansion in the Railway Sector
BL Kashyap is strategically positioning itself in the railway sector by actively pursuing railway projects. Leveraging its extensive portfolio of completed, ongoing, and upcoming projects, the company is establishing a strong foothold in this sector.
Additionally, BL Kashyap is capitalizing on its extensive experience in metro, railway, and healthcare infrastructure projects to further enhance its presence and contribute to India’s growth.
Capital Expenditure Plans in FY 24
In the fiscal year 2024, BL Kashyap has earmarked 25 crores for capital expenditure (capex), with a specific focus on the modernization of construction equipment. This allocation is aimed at enhancing the efficiency and safety of construction processes.
A substantial portion, approximately 10-12 crores, has already been invested in initiatives such as upgrading formwork, cranes, and safety elements, with the overarching goal of improving construction speed and quality at various project sites.
Balancing Government and Private Sector Orders in 2024
At present, 23% of BL Kashyap’s total order book is attributed to government projects, while the remaining 77% stems from the private sector.
Looking ahead to 2024, the company aims to increase its government project portfolio to 30-35%, anticipating new tenders to be released post-April. This strategic adjustment will be complemented by continued engagement with a diverse range of private sector clients, ensuring a balanced order book across sectors.
Growth Drivers and Focus Areas
BL Kashyap identifies several key drivers for its growth, including unwavering commitment to quality, emphasis on safety, and strong collaboration with existing clients. The company also places significant importance on the modernization of equipment and agile project management.
Moreover, BL Kashyap is strategically targeting growth opportunities across sectors such as infrastructure, hospitality, healthcare, real estate, and manufacturing. With a robust presence in multiple states and cities including Karnataka, Haryana, UP, Punjab, Gujarat, Pune, Chennai, Hyderabad, Kerala, Trivandrum, Patna, Raipur, and Delhi, the company is well positioned to capitalize on growth in these regions. Noteworthy focus areas for growth include major contributors like UP, Karnataka, Tamil Nadu, Andhra Pradesh, and the NCR.
Conclusion
In conclusion, the construction sector demonstrated robust performance in 2023, and the outlook for 2024 appears promising based on the increased inquiries and anticipated project growth. With a strong order book position and key projects nearing completion, BL Kashyap seems well-positioned to capitalize on the sector’s positive momentum.
BL Kashyap’s strategic initiatives and targeted focus areas are indicative of the company’s commitment to expanding its presence in the railway sector and fostering sustainable growth in India.
Disclaimer: This content is purely for informational purposes and does not constitute a recommendation for stock investment. Any decision related to investments should be made in consultation with a qualified financial advisor.
