Leadership Speak

Home/ Investors / Leadership Speak
Subhash Chand Sethi

Dear Stakeholders,

I am happy to inform that SPML Infra is the first Indian water management company that has been featuring into World’s Top 50 Private Water Companies as per Global Water Intelligence, London’s latest report.

Highlights of what we achieved in 2017-18

There were a number of highlights of our performance during the year. The principal highlight was that the company cleared the S4A appraisal of its various project out standings. The result of this landmark decision, which validated the company’s financial hygiene, was that our Rs. 546.92 crore debt was restructured by banks for repayments from the sixth year onwards to the tenth year. We believe that the moratorium of the first five years will make it possible for the company to strengthen its working capital management; besides, the chargeable interest of 0.01 per cent upto the fifth year will strengthen our balance sheet starting a virtuous cycle: lower debt, lower cost of debt and larger cash flows that make it possible for us to negotiate better to complete projects within time and budgeted cost. The fact that our repayments will begin from 2023 and then be charged at 8 per cent will empower us to address the growing opportunities in the water and power sectors with comprehensiveness and sustainability.

During the course of the year under review, the company continued to emphasis timely project completion. The company completed a part of the prestigious SAUNI project, which was inaugurated by the Hon’ble Prime Minister of India. We also completed Kanpur Sewerage Network with a 42 MLD sewage treatment plant, pumping stations and 130 km sewerage network, which is going to help the Clean Ganga Mission. Our robust project execution and delivery was rewarded by the award of another Rs. 850 crore project during the year. During the year we also bagged Rs. 205 crore international project order in Ghana after we have received Rs. 115 crore order earlier from Rwanda.

The project completion that gave us deep satisfaction was the commissioning of the 400 kv – 500 MVA auto-transformer in Mainpuri, Uttar Pradesh and Sikar, Rajasthan. These projects were carried out for Power Grid Corporation and comprised the highest project denominations ever completed by the company. The implications of this successful project completion are positive: the successful completion of this project makes us eligible to bid for 765 kv projects. We believe that this extension will graduate us to the highest league of players within the power sub-station business. During the course of the year under review, we generated 23% of our revenues from this business segment compared with 18% in the previous year. Besides, the traction was visible in our order book of around Rs.7,000 crore, providing us with an attractive 36-month revenue visibility.

SPML Infra intends to Capitalise

At SPML Infra, we are optimistic of our prospects for a number of reasons. SPML Infra is present in sectors - water, power and sanitation - that we expect will be the biggest beneficiaries of the country’s infrastructure push. The Company will bid for fewer but larger projects, marked by lower costs and higher margins.

The Company will select to work for projects that are accompanied by advances and periodic milestones, reducing the financial load. The Company will focus on EPC projects in power and water sector and not enter the BOT or BOOT segments, warranting large investments. The Company will divest non-core assets. The Company will increasingly bid for complete lifecycle engagements where one-time EPC engagement is coupled with ongoing maintenance contracts, enhancing the proportion of revenues from annuity revenues. The Company will work closely with Government-appointed agencies to liquidate its longstanding receivables under arbitration. The Company will pursue a progressive increase in ticket size per project, which has already trebled in the last few years, translating into enhanced economies. The Company will leverage strengthening pre-qualification eligibility to bid for larger and more complex projects in spaces where competition has declined. In the substation space, we intend to graduate to 765 kv projects, which would be value-added and attractively profitable.

We also intend to grow our presence in water projects in the country larger than Rs. 500 crore where competition is relatively limited. The Company will focus on timely projects completion and closure that could strengthen our cash flows.


We are acknowledged as among the top 50 most specialised water infrastructure companies in the world by Global Water Intelligence, London, which is a showcase of our long-term sectoral commitment. I am optimistic that the timely completion of order book will generate EPC revenues. Besides, our 27 operations & maintenance projects will generate attractive fee income from maintenance engagements which represent annuity revenues. We believe that the award of arbitrations in our favour could enhance cash flows in a sizable way, strengthening our balance sheet. The Company’s order book will translate into about 15 per cent revenues growth and a higher percentage growth in bottom line across the foreseeable future. We believe that this could represent the start of a virtuous cycle of growth and value creation.


Subhash Sethi


SPML Infra Limited