Seen 7-17% traffic growth across SPVs in 3 qtrs: Sadbhav

 Sadbhav Engineering in focus as the company won orders worth Rs 905 crores. To discuss the order details we are now joined by Nitin Patel, ED, Sadbhav Engineering.Below is the transcript of Nitin Patel's interview with Reema Tendulkar & Mangalam Maloo on CNBC-TV18.Reema: Can you walk us through these two projects of Rs 905 crore in which you are L1, when you likely to win these orders. Is this a part of some consortium, what will it take your order book to?A: We have won these projects in the state of Haryana and client is National Highways Authority of India (NHAI). Last three months we have started seeing good traction particularly in highway sector and after the budget when government gave the maximum thrust to the road sector, we have seen lot of tendering activity in road sector and as a part of the same we have also started submitting various projects particularly where the interest areas are there.There are two packages; a continue stretch of 85 kilometers and the total value of the contract is Rs 905 crore. This we need to complete over a period of two-and-a-half year, it’s a construction period as per Reguests for Proposal (RFP) documents given by NHAI and we are expecting we should get the letter of intent (LOI) with a week time and then after within 30 days we have to sign a contract agreement with NHAI and then after construction activity will be started. Therefore, we are of the view that once this will be implemented most probably Q3 will start getting the turnover from these two projects. This is the way how it has been contemplated.

Mangalam: Apart from this, what are the other L1 position looking like and what is your order book as of the last reported numbers?

A: In the last four months, apart of these two projects the company bagged another two road projects; one from NHAI that is Ambala–Kaithal and second from government of Karnataka; Karnataka state highway project which is funded by World Bank. So adding these two we have crossed the order book of Rs 9,000 crore now and considering the construction period of this entire order book we have to implement this entire order book on an average period of maximum three years from now.

Reema: Considering the kind of order book as well as the outlook for next year what could be the traffic growth that you expect from your projects because some peers like Ashoka Buildcon have come out with strong set of earnings?

A: Traffic growth in terms of our BOT assets, I would like to put in a different way – during last three quarters we have seen 16-17 percent traffic growth across all the SPVs, so in all the SPVs we have seen positive growth under FY15 and we are of the view that the way the ground level activity is - because the traffic reflects the ground level activity and according to our estimation the way the pace is going on, we are sitting on upward trend. Therefore, going forward we are positive and bullish in terms of traffic growth to come in better and decent way.

Mangalam: One of your arms Sadbhav Infrastructure has filed a Draft Red Herring Prospectus (DRHP) with Sebi but the listing has been delayed but if you look at the other infra companies which are listed MEP Infrastructure Developers, PNC, Ashoka Buildcon. So keeping all those things in mind do you think you are going to list anytime soon? If you could give us a timeline till when Sadbhav Infra could list?

A: The Company has already filed the documents to Sebi and Sebi has given the go ahead. According to the prevailing law the company has a timeline, within one year the company can go for listing of Sadbhav Infrastructure as per the guidelines. But we are in a very advance stage of submission of final documents and considering market stability as well as appropriate timeline we will file the final documents for listing of the company.