Think of a nation as a human body. Just as our body relies on a network of arteries and veins to deliver essential nutrients and oxygen to every cell, a nation depends on its infrastructure to keep everything functioning. Roads, bridges, railways, and communication networks act as the arteries of a nation, carrying people, goods and information throughout the country. 

GPT Infraprojects act as the arteries of a nation’s economy. Efficient transportation networks they create connect businesses to markets, reduce transportation cost and stimulate economic activity. As an infrastructure development company, their work has a profound impact on the lives of millions, contributing to the nation’s well being in several ways. 

With increased performance over the years the share price of GPT Infrastructure rose to 171.8 rupees as of today, compared to 48.40 rupees to that of the previous year. It gave a whopping return of 255%, will it continue to rise? Come let’s learn more about the company. 

Industry Overview Of GPT Infra projects

India’s infrastructure sector is undergoing a period of significant transformation. It’s a crucial driver of economic growth, urbanization and overall national development. The infrastructure sector act as a major engine of the Indian economy.

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To accomplish its economic development target of US$ 5 trillion by 2025, India should focus on improving its infrastructure. Budget 2023-24 aims to boost infrastructure spending by 33%, reaching H10 lakh crore (equal to US$ 122 billion). This increase is over three times the outlay in 2019-20, accounting for 3.3% of India’s GDP.

Railways (12%), roads (18%), energy (24%) and urban development (17%) account for almost 71% of expected infrastructure spending. India is estimated to receive USD 100 billion in foreign direct investment (FDI) in 2022-23.

Company overview Of GPT Infra projects

GPT infra projects is a leading infrastructure developing company in India, with a rich history dating back to 1980. They are a flagship company of the GPT group and their expertise lies in two key areas which includes civil & infrastructure projects and concrete sleeper manufacturing. 

For civil projects, they handle everything from building bridges and roads to constructing railway tracks and power plants. They are known for their end to end solutions, which means they oversee the entire project lifecycle from design to construction and maintenance. They are also expertized in building complex structures like cable-stayed bridges.

GPT Infra projects is a pioneer in manufacturing concrete railway sleepers, crucial components for safe and stable railway tracks. The company has its own manufacturing units in Panagarh (West Bengal), Ladysmith (South Africa) and Tsumeb (Namibia). The company converted into a public limited company by getting listed on stock exchanges on July 15, 2016.

GPT Infraprojects have achieved their highest ever order books in Q3FY24, which stands for 2,991 crores as of December 31, 2023. The order inflow during the 9 months of FY24 has been 1,439 crores, representing around 3.6x of their FY23 revenues. They do expect the closing order book for FY 25 to be around 4,000 crores. 

Currently GPT Infra projects are ongoing with different projects which includes Prayagraj project, Ghazipur project, Mathura – Jhansi project, Nimtita project and Byculla project. 

Product and Segment overview Of GPT Infra projects

Civil and Infrastructure projects

This segment focuses on the design, construction and maintenance of a wide range of civil infrastructure projects. They construct and repair bridges, lay railway tracks and industrial parks. Their main clients in this segment are government bodies like NHAI, MORTH, state PWDs for road/highway construction projects and they are currently involved in the Prayagraj project, Ghazipur project and Nimtita project in this segment.

Concrete sleeper manufacturing

GPT Infra projects manufacture high quality concrete railway sleepers, a crucial component ensuring track stability and safety for railways. Their main clients in this segment are railway authorities in India and African countries. In India, they have a factory in Panagarh catering to Indian Railways. They have bid for some sleeper contracts in Namibia and South Africa. 

In the Financial Year 22-23 the company received a revenue of 71,235.92 lakh rupees from infrastructure projects and it received a revenue of 7,967.85 lakh rupees from concrete sleeper manufacturing.

In the Financial Year 22-23 the company received a revenue of 71,235.92 lakh rupees from infrastructure projects and it received a revenue of 7,967.85 lakh rupees from concrete sleeper manufacturing.

Financials Of GPT Infra projects

FY 2023FY 2022FY 2021FY 2020
Revenue (in crore)809675609618
Net profit (in crore)30232013
ROE11.32%9.50%8.42%6.69%
ROCE14%14%14%13%

In the FY 2023 GPT Infra projects saw an increase in revenue, surging by 19.85% to reach 809 crore rupees as opposed to 675 crore rupees in FY 2022. This happened because of better executions which took place in the infrastructure segment. Analyzing a span of three years, encompassing FY 2021 to FY 2023, the company displayed a Compounded annual growth rate (CAGR) of 9 % in revenue.

In FY 2023 the net profit of the firm was also increased by 30.43% to reach 30 crore rupees as opposed to 23 crore rupees. In FY 2023 ROE of the firm increased by 1.82 % because of increased profit driven by increased revenue and ROCE of the firm remained the same 14% as compared to the previous years. 

Future Plans of GPT Infra projects

  • With continued focus on the infrastructure sector by the government, the company is planning to maintain a book to bill by 3.2 – 3.5x. GPT is expecting the order book to grow by 20% CAGR for the next three years, and it is also planning to achieve the closing order book to rupees 4000 crore by next year. 
  • GPT is also on track to reduce its working capital cycle to double digits in the long term and it is planning to achieve long term ROCE and ROE closer to 20%.
  • GPT infra projects has received a 740 crore contract from NHAI and at the same time it is also planning to bid for some other large contracts as well.
  • GPT received a couple of contracts for concrete sleepers in Namibia and South Africa. The Government of India is expecting to build three new freight corridors after the completion of Eastern and Western corridors, so the company is targeting to get one or two factories in the new freight corridors. GBP is expecting the concrete sleepers to contribute 10% – 12% of its total revenue in its upcoming future.

Conclusion

Looking at the performance of GPT Infra projects, the company appears promising. Their expertise in civil and infrastructure projects, coupled with their leadership in concrete sleeper manufacturing, positions them as a well rounded contributor to the nation’s growth. Supported by India’s infrastructure boom, their diverse capabilities and established presence, they are well positioned to capitalize on upcoming opportunities.

However, navigating competition, ensuring project efficiency and incorporating sustainability practices will be critical for their long term success. What do you think about the future of GPT infra projects will it continue to grow? Do share your thoughts in the comments below.

Written by Pavunkumar V M

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