YD Murthy, executive VP-finance, NCC says in an interview to CNBC-TV18 that the apex court ruling will quicken the implementation of 25 road projects worth Rs 25,000 crore that were stalled awaiting the grant of the clearance from the ministry of environment.
On Tuesday, the Supreme Court (SC) gave an order de-linking forest clearance from environment clearance for linear projects.
This step will speeden up the implementation of 25 road projects worth Rs 25,000 crore which were stalled due to grant of the clearances from the ministry of environment, YD Murthy, executive VP-finance, NCC said in an interview to CNBC-TV18.
Post this ruling, the bid should be better for NHAI and builders will also be more confident, he added.
Below is the edited transcript of the interview on CNBC-TV18
Q: Do you have any road-widening projects and has Supreme Court observation eased the implementation of road development projects?
A: As of now, we do not have any road projects under implementation. All our road projects have been completed and declared ready for commercial operation. The Supreme Court order is a step in a right direction and has quickened the progress of road projects. So definitely it will be better for road developers.
Q: Do you expect better bids for NHAI projects?
A: Yes, the bid should be better and will make builders more confident. This ruling fom the Supeme Court will kick-start road development activity across the country.
Q: What are the projects that have been stalled awaiting final clearances including the go-ahead by the ministry of environment, that will now be implemented?
A: There are about 25 road projects worth approximately about Rs 25,000 crore that have been stalled due the requirement of clearances from the ministry of environment.
Q: Will this ruling reduce the instances of infrastructure companies abandoning projects?
A: Yes, that should happen. That is a lesson to the government also. In a private-public partnership (PPP), the government agency is also a partner and should shoulder some responsibility.
Q: Do you expect anything from NHAI in this quarter and the next?
A: I refer to the Budget where the government announced the award of 3,000 km of road projects in the next six months. I think that will be a step in the right direction and the infrastructure sector will slowly start to see some activity.
Q: But has there been any activity?
A: Well, it takes some time for the implementation to begin.
Q: Do you expect 3,000 km or road to be laid in the first half of the coming fiscal as announced in the Budget?
A: We are optimistic and there is nothing wrong in being optimistic. In fact, a year ago the NHAI has awarded 7,300-km of road projects worth over Rs 60,000 crore in 12 months. Though there was a slippage in the previous fiscal, the situation definitely has the potential to recover.
NCC stock price
On October 30, 2014, NCC closed at Rs 52.75, down Rs 0.45, or 0.85 percent. The 52-week high of the share was Rs 54.95 and the 52-week low was Rs 13.88.
The company's trailing 12-month (TTM) EPS was at Rs 0.48 per share as per the quarter ended June 2014. The stock's price-to-earnings (P/E) ratio was 109.9. The latest book value of the company is Rs 56.10 per share. At current value, the price-to-book value of the company is 0.94.
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