DILIP BUILDCON Chairmans Speech

Dear Shareholders,


The management at Dilip Buildcon Limited is pleased to present the first financial report of your Company following its initial public offering in August 2016. At the outset, let me tell you that we are immensely humbled and grateful to each and every one of you who has shown utmost trust and confidence in our management, our business model, and our strategy in the first year of our listing. In a very challenging global environment, the IPO was oversubscribed by 22 times, which is one of the major talking points as it happened almost after a decade in this sector. Your company raised Rs. 4,300 million by way of primary issuance of shares and Rs. 2,239.77 million by way of offer for sale (OFS) by Selling Shareholders aggregating to Rs. 6,539.77 million.


The numbers we reported during the year under review are a testament of our competitive advantage and long-term sustainability. I am pleased to state that this performance translated into a handsome 59.70%* appreciation in our stock post listing on the National Stock Exchange and Bombay Stock Exchange, enhancing value for our stakeholders.


We like to see ourselves as an execution driven company on one hand and an opportunity responsive company on the other, playing our active role in India’s growth story. All the strategies, practices, policies that the company adopts or has adopted over the years have one central theme -”Focus on Execution. “ We believe that this dedicated pursuit has made it possible for us to minimize our downside during sector troughs and maximize our progress during sectoral rebounds.


What started as a dream in a small town in Central India has now become India’s largest road EPC company spanning across 16 states. We are currently building over 8,604.61 lane kms, essentially participating in the country’s growth story and building its backbone. Being a civil engineer the only focus I had while starting this company was to focus on delivering the best-quality output. Today, India as a country has grown far beyond my imagination back then, and we have been an active contributor of the country’s growth story. We believe that it is still very early for India, as there is still an immense scope for India’s infrastructure development. Presently, we are evaluating our options across various sectors in the infrastructure space like roads & highways, irrigation, urban development, and mining to broaden our scope.


I continue to be a big believer in the India’s transformation phase and as we keep growing. The scope for infrastructure is only going to grow in the near future, and that’s where I see us playing a more prominent role.


India’s power needs are going to be immense in the future and lot of the natural resources in India are still not utilized commercially. We saw this as an opportunity and forayed into the mining segment this year. This was possible due to our focus on execution, tracking and monitoring and exceptional project management skills. We entered into mining segment last year and we had an order book of Rs. 1,045 Mn. However, this year we expanded our presence in this sector and our mining order book has grown to Rs. 26,117.19 Mn.


In the last decade, our revenues have grown by 103.29 % CAGR. The only external equity we took to grow to this stage was Rs 750 Mn from Banayan Tree before going public in 2016. It shows our efficiency in utilizing our resources, especially our capital.


103.29%*


10 years Revenue CAGR


Your company recently concluded discussions on the strategy for the company. The highlights of the plan include:


1. Focus on execution of projects in hand, while selectively participating in new bids of large size


2. Gearing up to tap emerging opportunities in the whole infrastructure space, so as to be seen as a full-service infrastructure company


3. Growing revenues consistently as planned


4. Steady reduction in net working capital and debt levels


5. Monetization of existing road projects as planned


We continually strive to enhance value for investors.


The trust that our clients place in us is at the heart of this. We have an approach of providing regular and stable pay-outs to investors; And of prudent evaluation of capital allocation decisions, in context of long term stakeholder value. Consistent with this approach, we have recommended maiden dividend @ 10% i.e. Rs. 1.00 per equity share of Rs. 10/-each for the financial year ended March 31, 2017. The value that a company creates for its stakeholders is not just financial but also social, environmental, intellectual and human. For example, by investing in employee skilling and development, organizing safety awareness camps, providing education. Our work in school education, community care and ecology enhances social and natural capital. Our agenda is not just building infrastructure, rather contributing in nation building. Social value is also created when companies engage with its communities and work on some of society’s most pressing issues. It creates environmental value by being more ecologically sustainable.


Let me end with thanking all the shareholders for their support and encouragement during the year, for the trust and faith that you repose in us.


Very Sincerely,


Dilip Suryavanshi


Chairman and MD

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