Tuesday, December 16, 2008

Rise in infrastructural spending would ensure long-term sustainability of economic growth in India

Dun & Bradstreet, the world's leading provider of global business information, knowledge and insight, today released the second edition of its publication, India's Leading Infrastructure Companies 2008. The publication profiles 210 companies, which include 117 companies from the construction sector, 71 from power, 12 Ports and 10 telecom service providers. The publication is an attempt to highlight some of the key achievements and issues related to the Indian infrastructure sector and create a valuable ready reference tool on India's leading infrastructure companies.

Speaking at the launch, Dr. Manoj Vaish, President & CEO - India, Dun & Bradstreet, said, "Despite the strides that India has taken in the last few years, the current levels of investments in infrastructure are not sufficient to bridge the gap between demand and supply. India stood at 72 on WEF's infrastructure index rating for FY08. Compared to the previous ranking, India has fallen 10 places, indicating that some of the other countries have progressed much faster. While these numbers indicate the comparative status of infrastructure in various emerging countries, they also indicate dormant investment opportunities residing in this sector in India."

"India's economy is expected to maintain its growth momentum, however, given the current global scenario, we expect some slowdown in growth. A rise in infrastructural spending would ensure long-term sustainability of economic growth and will also create incremental economic opportunities. Infrastructure in India not only needs to be modernised but also requires substantial addition", he added.

D&B's 'India's Leading Infrastructure Companies 2008' was launched by Mr Manu Trivedi, Chief Executive Officer, IL&FS Maritime Infrastructure Company Ltd. A panel discussion titled "Infrastructure Financing in India and The Way Forward" was hosted by D&B to mark the occasion.

About D&B's India's Leading Infrastructure Companies 2008:

India's Leading Infrastructure Companies 2008 covers some of the major sub segments of India's infrastructure sector viz. power, telecom, ports and construction. The publication profiles 210 companies - 117 from the construction sector (including development of airports & seaports, real estate, construction and commissioning of industrial units, railways, SEZ and social infrastructure), 71 from power, 12 from Ports and 10 from telecom services.

Key highlights:

Financial:

• The total income of the surveyed companies in the construction and power sectors grew by 35.9% and 10.27% respectively on a CAGR basis, over the last 5 financial years.

• Construction companies surveyed recorded an average annual RoNW of 20.5% in the past 5 financial years, whereas the power sector recorded an average annual RoNW of 12.5% during the same period.

• Surveyed companies from the power sector, posted EBITDA growth of 9.2% on a CAGR basis during FY04-FY08.

Operational:

• Surveyed companies from the power and construction sectors indicated that term loans and self financing are the most preferred financing options.

• The respondents from the construction sector indicated that they have been adversely impacted by an increase in the cost of raw materials, delays in approval from authorities and lack of availability of skilled labour.

• Over the next 5 years, all the power companies covered by the study indicated plans to increase capacity, either by installing new power plants or expanding the capacity of their existing plants. The companies expect to add over 64,000 MW over the next 5 years.

India's Leading Infrastructure Companies 2008