CONSTRUCTION & INFRASTRUCTURE Telangana State: Plans in place, capex to pick-up gradually June 18, 2015 Nitin Arora Research Analyst [email protected]+91 22 66242491 Kushan Parikh Research Associate [email protected]+91 22 66121431 Adilabad Nizamabad Karimnagar Medak Warangal Ranga Reddy Hyderabad Nalgonda Mahbubnagar Khammam TELANGANA PROFILE Capital City : Hyderabad Area : 114840 Sq. Kms. Districts : 10 Households : 8.36 mn Population : 35.2 mn SECTOR UPDATE
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CONSTRUCTION & INFRASTRUCTURE
Telangana State: Plans in place, capex to pick-up gradually
Source: Company, Emkay Research Note: Sadbhav Engg. P/E ratio is FY16E/17E implied P/E as we have valued the company on SoTP basis and estimate only standalone EPS.
Construction & Infrastructure India Equity Research | Sector Update
Emkay Research | June 18, 2015 2
Exhibit 1: Details of New Major Irrigation Schemes and Projects
Name of the Project Details
Palamuru-Ranga Reddy Lift Irrigation Scheme
� Project aims to provide drinking water to Hyderabad
� Irrigate 7 lakh acres in Mahabubnagar, 2.7 lakh acres in Ranga Reddy and 0.3 lakh acres in Nalgonda districts by lifting 70 TMC of flood water from Krishna River near Jurala project
� Estimated cost is about Rs250 Bn.
Nakkalagandi Project
� Planned to irrigate 3.41 lakh acres of chronically fluoride and drought affected areas of Nalgonda District and a part of Mahabubnagar District
� Estimated cost of Rs60 bn utilizing 30 TMC of flood water to be drawn from the SLBC Tunnel being constructed from Srisailam Project
Jurala-Pakhala Flood Flow Canal
� The Jurala-Pakhala Flood Flow Canal is under investigation from the foreshore of Jurala Project
� Has a silt level at +311.000 (at Jurala) to Pakhala Reservoir in Warangal district
� Potential to feed approximately 700 tanks situated in drought prone areas of Mahabubnagar, Nalgonda and Warangal districts during flood season in 35 days by diverting 24,000 cusecs for total 70 TMC
Source: GoTS
Exhibit 2: District and year-wise Plan of Restoring the Tanks
No of tanks proposed during the year
District No of Sources 2014-15 2015-16 2016-17 2017-18 2018-19
Karimnagar 5939 1188 1210 1220 1200 1121
Adilabad 3951 790 800 800 800 761
Warangal 5839 1168 1170 1180 1200 1121
Khammam 4517 903 910 920 930 854
Nizamabad 3251 650 650 650 650 651
Medak 7941 1588 1590 1600 1610 1553
Ranga Reddy 2851 570 500 570 600 611
Mahaboobnagar 7480 1496 1500 1510 1510 1464
Nalgonda 4762 952 978 980 980 872
Total 46531 9305 9308 9430 9480 9008
Source: GoTS
Construction & Infrastructure India Equity Research | Sector Update
Emkay Research | June 18, 2015 3
Road sector
In the road sector the main focus is on laying of new roads, construction of new bridges and
widening and strengthening of the existing roads.
� Widening of single lane roads to double lane -4717 km to cost Rs62 bn.
� Construction of bridges worth Rs19.74 bn.
� Maintenance works of Rs10, 000 km worth Rs24 bn.
The government of telengana to award 580 km of road projects under PPP mode.
As on 30 Jan 2015 there are 16 national highways in the state of Telangana covering length
2592 km crisscrossing the state. In addition government of India have declared 3 new national
highways (around 285 km).
Exhibit 3: Road network
Road Network Length in Kms
National Highways 2592
State Highways 3152
Major District Roads 12079
Rural Roads 9014
Total Road length in Kms 26837
State Roads (Excluding National Highways) 24245
Core Net Roads 4020
Source: GoTS
Exhibit 4: Category- Wise Details of The Roads (Length in Kms)
Classification of Road Four Lane &
Above Double
Lane Intermediate
Lane Single
Lane Total
National Highways 964 1264 153 211 2592
State Highways 377 2484 88 203 3152
Major District Roads 281 3274 478 8046 12079
Other District Roads 10 335 53 8616 9014
Total 1632 7357 772 17076 26837
Source: GoTS
Exhibit 5: Details of Roads proposed under PPP-BOT mode
Centrally Assisted State Plan Schemes 3600.0 3079.2
WATER SUPPLY & SANITATION 35395.1 44209.9
Normal State Plan 26301.7 40578.0
RIDF 175.0 660.8
13th Finance Commission 473.0 0.0
Externally Aided Project 1945.4 500.0
Centrally Assisted State Plan Schemes 6500.0 2471.1
HOUSING 10751.4 9542.7
Normal State Plan 4868.5 4325.5
Centrally Assisted State Plan Schemes 5882.9 5217.1
URBAN DEVELOPMENT 35543.5 21319.6
Normal State Plan 13345.8 14854.6
Externally Aided Project 9550.0 3750.0
Centrally Assisted State Plan Schemes 12647.8 2715.1
Source: GoTS
Construction & Infrastructure India Equity Research | Sector Update
Emkay Research | June 18, 2015 14
Exhibit 15: Statement of Capital Expenditure
in Rs Mn FY15 RE FY16 BE
General Services 4904.4 5842.6
Capital Outlay on Police 3010.3 2490.5
Capital Outlay On Stationery and Printing 50.0 50.0
Capital Outlay on Public Works 788.5 2193.0
Capital Outlay on Other Administrative Services 1055.6 1109.1
Social Services 41899.5 19818.7
Education, Sports, Art and Culture 4217.0 3455.0
Health and Family Welfare 5920.6 6781.8
Capital Outlay on Medical and Public Health 5918.8 6780.0
Capital Outlay on Family Welfare 1.8 1.8
Water Supply, Sanitation, Housing and Urban Development 23011.8 1676.6
Capital Outlay on Water Supply and Sanitation 22260.4 452.7
Capital Outlay on Housing 751.4 1223.9
Welfare of Scheduled Castes, Scheduled Tribes and Other Backward Classes 8509.8 6951.0
Social Welfare and Nutrition
Capital Outlay on Social Security and Welfare 228.5 942.4
Others
Capital Outlay on Other Social Services 11.8 11.8
Economic Services 104003.6 134163.8
Capital Account of Agriculture and Allied Services 215.1 5182.6
Capital Outlay on Crop Husbandry 52.0 52.0
Capital Outlay on Animal Husbandry 163.1 1102.5
Capital Outlay on Other Agricultural Programmes 4028.2
Capital Account of Irrigation and Flood Control 63790.7 69989.9
Capital Outlay on Major Irrigation 40170.2 56064.6
Capital Outlay on Medium Irrigation 970.3 2271.7
Capital Outlay on Minor Irrigation 22133.9 7824.0
Capital Outlay on Command Area Development 236.3 236.4
Capital Outlay on Flood Control Projects 280.0 3593.2
Capital Account of Energy
Capital Outlay on Power Projects 10043.1 10064.1
Capital Account of Industries 58.0 65.3
Capital Outlay on Village and Small Industries 0.2
Capital Outlay on Industries 30.0 37.5
Capital Outlay on Consumer Industries 16.3 16.3
Capital Outlay on Other Industries 11.5 11.5
Capital Account of Transport 21505.6 42861.9
Capital Outlay on Roads and Bridges 21445.6 42801.9
Capital Outlay on Road Transport 60.0 60.0
Capital Account of General Economic Services
Capital Outlay on Other General Economic Services 8391.1 6000.0
Grand Total Capital Expenditure 150807.4 159825.1
Source: GoTS
Construction & Infrastructure India Equity Research | Sector Update
Emkay Research | June 18, 2015 15
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