SRM Contractors Limited
SRM Contractors Limited is an infrastructure company headquartered in Jammu, India. They have been active for about two decades, specializing in heavy civil works such as the construction of tunnels and bridges, particularly in mountainous terrain
About Company
SRM Contractors Limited has emerged as a formidable name in the infrastructure sector, particularly known for its expertise in heavy civil works such as tunnel construction and bridge building in challenging mountain terrains. With a history that spans over two decades, SRM Contractors Limited has established itself as one of the top infrastructure companies in India, with a significant presence in Jammu.
The company's journey began in 2008, and since then, it has been at the forefront of infrastructure development, contributing to the nation's growth. SRM Contractors Limited was incorporated as 'SRM Contractors Private Limited', a testament to its commitment to excellence and quality in the construction domain.
The company's portfolio boasts a variety of projects that showcase its capability to handle complex infrastructure challenges. Some of its notable ongoing projects include the Tutian Di Khui Katra Quarters and the RE Wall Sidhra-Sunnsar Road. These projects not only demonstrate SRM Contractors' technical prowess but also its dedication to enhancing the connectivity and accessibility of remote regions.
In terms of completed projects, SRM Contractors Limited has an impressive track record with projects like Tunnel T5 Chenani Sudhmahadev and the Katra Flats RE Wall Reasi Sumber Tunnel T 41. These projects have not only helped in improving the infrastructure but also in boosting the local economies of the areas they serve.
The company's commitment to quality control, customer satisfaction, and environmental sensitivity has earned it a reputation for delivering projects that meet the highest standards of workmanship. SRM Contractors Limited prides itself on providing personalized solutions that cater to the unique needs of each project, ensuring that the end result is not just functional but also sustainable.
In a recent development, SRM Contractors Limited has ventured into the public domain with its Initial Public Offering (IPO), which opened for subscription on March 26, 2024. The IPO is a fresh issue of 6,200,000 equity shares, with the price band set at INR 200 to INR 210 per share. This move marks a significant milestone for the company, reflecting its growth trajectory and the confidence of its leadership in its future prospects.
The leadership team, comprising Mr. Sanjay Mehta as the Managing Director cum Promoter, Mr. Puneet Pal Singh as the Whole-time Director cum Promoter, and Ms. Ashley Mehta as the Non-executive Director cum Promoter, has been instrumental in steering the company towards new heights. Their vision and strategic direction have been pivotal in SRM Contractors Limited's success.
As SRM Contractors Limited continues to expand its horizons, it remains dedicated to its mission of building infrastructure that stands the test of time and serves the needs of the community. With its recent IPO and a robust pipeline of projects, the company is well-positioned to play a key role in shaping India's infrastructure landscape in the years to come.
For more detailed information on SRM Contractors Limited and its IPO, interested individuals can refer to the company's Red Herring Prospectus (RHP) available on financial platforms.
Company Financials
IPO Timeline (Tentative Timetable)
IPO Open Date: March 26, 2024
IPO Close Date: March 28, 2024
Basis of Allotment: April 1, 2024
Initiation of Refunds: April 2, 2024
Credit of Shares to Demat Account: April 2, 2024
Listing Date: April 3, 2024
Cut-off time for UPI mandate confirmation: 5 PM on March 28, 2024.
Please note that these dates are based on the information available and are subject to change as per the company’s discretion or regulatory guidance.
IPO Details
Competitive Strength
SRM Contractors Limited has emerged as a formidable player in the engineering, construction, and development sector, particularly known for its expertise in constructing roads, tunnels, slope stabilization, and other civil works. With a focus on the challenging terrains of Jammu & Kashmir and Ladakh, SRM Contractors Limited has carved out a niche for itself, demonstrating resilience and adaptability in the face of geographical challenges.
Proven Track Record
The company boasts a proven track record, having successfully completed 37 infrastructure projects, including 31 road projects, 3 tunnel projects, 1 slope stabilization project, and 2 miscellaneous civil activities, with a total contract value of ₹770 crores. This impressive portfolio underscores SRM Contractors Limited's ability to deliver complex projects with precision and excellence.
Experience in Difficult Terrain
SRM Contractors Limited's extensive experience in the challenging conditions of Jammu & Kashmir and Ladakh sets it apart from its competitors. The company's ability to navigate these difficult terrains has not only proven its technical prowess but also its commitment to overcoming obstacles to infrastructure development.
Financial Strengths
The company's financials reflect its competitive edge, with a healthy order book position and a comfortable financial risk profile. An interest coverage ratio of 6.6x and a TOL/TNW of 1.14x as of March 31, 2023, indicate a robust financial standing that supports its ongoing and future projects.
Industry Recognition
As a Class A contractor registered with the Public Work Department of Jammu & Kashmir, SRM Contractors Limited is pre-qualified to bid independently on government contracts worth up to ₹300 Cr for EPC Contracts and up to ₹500 Cr for the construction of tunnels. This recognition speaks volumes about the trust and confidence the industry places in the company's capabilities.
Strategic Competitive Positioning
In the EPC space, SRM Contractors Limited holds its ground as the third-largest company by revenue among its listed peers. With a return on Net worth of 30%, SRM Contractors Limited outshines its industry peers, who have a median of 12.87%, showcasing its superior profitability and strategic market positioning.
Government Support and Market Potential
The Indian government's focus on infrastructure development, as evidenced by the allocation of INR 2.8 Lakh Cr for the Ministry of Road Transport & Highways in the Union Budget for FY25, provides a conducive environment for SRM Contractors Limited to thrive. With India's aim to grow to a USD 5 trillion economy by 2027, the construction sector, and by extension SRM Contractors Limited, is poised for significant growth.
SRM Contractors Limited stands out in the infrastructure sector with its competitive strengths rooted in its proven track record, expertise in challenging terrains, strong financials, industry recognition, strategic positioning, and the potential for growth supported by government initiatives. As the company continues to build on these strengths, it is well-positioned to play a pivotal role in shaping India's infrastructure landscape.
Company's Past Financial Performance
Revenue Growth
In the fiscal year 2021, SRM Contractors Limited reported a revenue of ₹160.06 crores. This figure saw a significant increase in FY 2022, where the revenue climbed to ₹263.61 crores. The upward trajectory continued in FY 2023, with the company registering a revenue of ₹300.29 crores. This consistent increase in revenue highlights the company's expanding operations and its ability to secure and execute larger projects.
Profitability Enhancement
Alongside revenue, the company's profitability has also seen an upward trend. In FY 2021, the profit after tax (PAT) stood at ₹8.27 crores. This number grew to ₹17.57 crores in FY 2022 and further to ₹18.75 crores in FY 2023. The steady rise in profits can be attributed to the company's strategic planning, efficient execution of projects, and effective cost management.
Debt and Net Worth
The company's debt levels have also been managed efficiently. Starting with a debt of ₹31.96 crores in FY 2021, there was a slight increase to INR 31.52 crores in FY 2022, followed by a more noticeable rise to INR 47.16 crores in FY 2023. Despite this increase, the company's net worth has shown healthy growth, from INR 26.85 crores in FY 2021 to INR 44.41 crores in FY 2022, and reaching INR 63.16 crores in FY 2023.
Return on Equity (RoE)
The Return on Equity (RoE) is a critical indicator of financial health and efficiency. SRM Contractors Limited reported an RoE of 30.81% in FY 2021, which increased to 39.55% in FY 2022, showcasing the company's ability to generate profits from its equity. However, there was a slight dip to 29.68% in FY 2023, which could be attributed to the increased equity base due to retained earnings.
Conclusion
The past three years have been a period of growth and financial strengthening for SRM Contractors Limited. The company's focus on key infrastructure projects and its presence in strategic locations like Jammu & Kashmir and Ladakh have contributed to its strong financial performance. With the company's IPO on the horizon, these financial figures present a promising outlook for potential investors and stakeholders.
For a more detailed analysis and the latest updates on SRM Contractors Limited's financial performance, interested readers can refer to the company's share price and financial report. Additionally, information regarding the company's IPO can be found on various financial platforms.
The financial journey of SRM Contractors Limited over the last three years is a testament to its robust business model and operational excellence. As the company prepares to go public, it stands as a significant player in the infrastructure development sector, poised for future growth and success.