LCC Projects IPO

LCC Projects Limited IPO Strengths

Leading EPC Company in Irrigation and Water Supply Projects

LCC Projects Limited is a prominent multidisciplinary EPC company in India, excelling in irrigation and water supply projects. With a proven track record of completing 71 projects, the company demonstrates expertise in project execution, timely delivery, and large-scale infrastructure development across diverse geographic conditions.

Strong Order Book and Diversified Project Portfolio

LCC Projects Limited has demonstrated consistent growth in its Order Book, reaching ₹73,474.24 million as of September 30, 2024. With a diversified portfolio across business verticals and government contracts, the company’s expertise in project execution, quality standards, and financial strength drive its sustained expansion.

In-House Project Design Capabilities with Robust Technical Expertise

LCC Projects Limited boasts a strong in-house design and engineering team, consisting of 496 qualified engineers and technical experts as of September 30, 2024. With expertise in construction management and design, the team ensures efficient project execution, cost control, and adherence to quality standards, leveraging cutting-edge technologies such as SCADA, GIS, and AutoCAD.

Strong Risk Management, Project Selection, and Dispute Resolution

LCC Projects Limited employs a comprehensive risk management system to identify, measure, and monitor potential risks across the project lifecycle. The company prioritizes projects with steady cash flows and mitigates credit risk through milestone-based payments and escalation clauses. Senior management conducts rigorous risk assessments at every stage, from pre-tendering to execution. Additionally, a structured dispute resolution approach ensures smooth project delivery by addressing contractual concerns proactively.

Efficient Business Model

LCC Projects Limited’s growth stems from strategic project selection, cost optimization, and precise pricing. Pre-bid assessments, high-quality execution, and efficient inventory management enhance profitability. A dedicated business development team ensures competitive pricing, stakeholder engagement, and resource efficiency, driving sustainable growth and financial stability.

Experienced Leadership and Skilled Management Team

LCC Projects Limited benefits from experienced leadership, with Promoters Arjan Suja Rabari and LalajibhaiArjanbhai Ahir bringing 27+ and 15+ years of expertise. A stable senior management team ensures strategic growth, market adaptability, and operational excellence, driving innovation and long-term success in multidisciplinary EPC projects.

More About LCC Projects Limited

LCC Projects Limited is among India’s leading multidisciplinary engineering, procurement, and construction (EPC) companies, particularly in the irrigation and water supply projects segment. As of the six-month period ending September 30, 2024, the company holds a significant market share in this sector (Source: ICRA Report). Additionally, it is one of Gujarat’s fastest-growing large corporate EPC companies in terms of turnover growth in Fiscal 2024. The company is expanding its infrastructure projects across 11 states in India (Source: ICRA Report).

Expertise and Experience

With over two decades of experience, including projects undertaken through a partnership firm before its conversion to a corporate entity, LCC Projects Limited has successfully executed diverse projects in the irrigation and water supply sector. These projects include:

• Construction of dams, barrages, and weirs

• Development of hydraulic structures and canals

• Implementation of pipe distribution networks

• Execution of lift irrigation works and water supply schemes

• Comprehensive EPC project management

The company has also ventured into infrastructure development beyond irrigation, recently completing a metro rail project involving the construction of stations, approaches, and viaducts. Additionally, it is currently engaged in a mining development and operations (MDO) project.

Project Portfolio

Current Order Book

As of September 30, 2024, LCC Projects Limited has an order book comprising 68 ongoing projects. The three largest projects by value include:

• Sondwa Lift Micro Irrigation Project – ₹13,954.11 million

• Sidhi Bansagar Multi-Village Scheme – ₹13,864.94 million

• Gandhi Sagar 1 Multi-Village Scheme – ₹10,490.00 million

Ongoing Projects

The top ten ongoing projects, as per contract value, include:

• Sondwa Lift Micro Irrigation Project (₹13,954.11 million) – Madhya Pradesh

• Sidhi Bansagar Multi-Village Scheme (₹13,864.94 million) – Madhya Pradesh

• Gandhi Sagar 1 Multi-Village Scheme (₹10,490.00 million) – Madhya Pradesh

• Luvkushnagar, Chhatarpur (Tarped) & Bijawar Multi-Village Drinking Water Supply Scheme (₹9,856.99 million) – Madhya Pradesh

• Bishrampur Mining Project (₹6,693.33 million) – Chhattisgarh

• Lift Irrigation Pipeline Project from Todiya Rock (Mahi River) (₹5,723.09 million) – Gujarat

• Bhandura Nala Diversion Scheme (Lift Scheme) (₹5,142.41 million) – Karnataka

• Irrigation Facilities to Nalkantha (₹3,776.56 million) – Gujarat

• Dudhi Dam Construction & Maintenance Project (₹3,548.00 million) – Madhya Pradesh

• Malthon Multi-Village Scheme (₹3,412.92 million) – Madhya Pradesh

Each of these projects is executed with a turnkey approach, covering engineering, procurement, construction, testing, commissioning, and long-term operation and maintenance.

Completed Projects

LCC Projects Limited has successfully delivered numerous high-value projects. The top ten completed projects (as of September 30, 2024) include:

• Dudhai Sub Branch Canal Project – Gujarat (₹3,201.68 million, completed in 2021)

• Sitanagar Project

Commitment to Infrastructure Development

LCC Projects Limited remains committed to executing large-scale EPC projects with precision and efficiency. By leveraging its extensive experience and technical expertise, the company continues to contribute to India’s infrastructure growth while maintaining its position as a market leader in the irrigation and water supply sectors.

Industry Outlook

Indian Infrastructure Industry Outlook

• Growth Projections

• Morgan Stanley forecasts a 15.3% compound annual growth rate (CAGR) in infrastructure investments over the next five years, amounting to a cumulative expenditure of $1.45 trillion.

• Government Initiatives

• The Union Budget has allocated ₹10 lakh crore (approximately $130.57 billion) to infrastructure development, with specific allocations including:

• National Highways Authority of India (NHAI): ₹134,015 crore ($17.24 billion)

• Ministry of Road Transport and Highways: ₹60,000 crore ($7.72 billion)

• Ministry of Housing and Urban Affairs: ₹76,549 crore ($9.85 billion)

• Department of Telecommunications: ₹84,587 crore ($10.87 billion)

• Indian Railways: ₹234,640 crore ($30.48 billion)

• The PM GatiShakti National Master Plan aims to accelerate project execution and reduce cost overruns.

Sector-Specific Outlook

• Irrigation and Water Supply

• Continued investments in irrigation projects are anticipated to enhance agricultural productivity and rural livelihoods.

• Transportation Infrastructure

• Roadways: Plans to expand the National Highways Network by 25,000 km in 2022–2023, with projects like the 1,380 km eight-lane Delhi–Mumbai expressway expected to boost connectivity.

• Railways: Introduction of 400 new Vande Bharat trains by 2025 under the “Make in India” initiative, with a focus on electrification and modernization.

• Airways: The UDAN program aims to enhance regional air connectivity, operationalizing 415 routes and 66 airports.

• Mining Development and Operations (MDO)

• The government’s focus on self-reliance in mineral production is expected to drive growth in the mining sector, offering opportunities for companies engaged in MDO projects.

Key Growth Drivers

• Government Policies

• Initiatives like PM GatiShakti and substantial budget allocations are set to drive infrastructure development.

• Urbanization

• Rapid urbanization necessitates the expansion of infrastructure, including water supply and transportation networks.

• Private Sector Participation

• Encouragement of private investments is expected to enhance efficiency and innovation in infrastructure projects.

How Will LCC Projects Limited Benefit

• Rising Infrastructure Investments: A projected $1.45 trillion infrastructure investment over five years provides LCC significant opportunities to secure large-scale EPC contracts and expand its nationwide presence.

• Government Budget Allocation: ₹10 lakh crore allocated for infrastructure development ensures financial support for LCC’s irrigation and water supply projects, boosting growth and project execution capabilities.

• Irrigation Sector Expansion: Increased government investments in irrigation projects enhance demand for LCC’s expertise in constructing dams, barrages, canals, and water distribution networks, strengthening its market position.

• Urbanization-Driven Growth: Rapid urban expansion fuels demand for water supply infrastructure, enabling LCC to capitalize on large-scale urban and rural development projects across multiple states.

• Transportation Infrastructure Development: Expanding roads, railways, and airways infrastructure creates diversification opportunities for LCC, allowing entry into new infrastructure sectors beyond irrigation and water supply.

• Mining Sector Growth: The government’s self-reliance push in mineral production increases mining project demand, benefiting LCC’s mining development and operations (MDO) business segment.

• PM GatiShakti Initiative: Streamlined project execution and reduced cost overruns under PM GatiShakti improve LCC’s efficiency, ensuring faster completion of EPC projects with optimized resources.

• Private Investment Opportunities: Rising private participation in infrastructure enhances project financing options, allowing LCC to undertake larger, more complex EPC projects with improved execution capabilities.

• Technological Advancements in EPC: Government-driven modernization in infrastructure encourages LCC to adopt advanced engineering and construction technologies, enhancing operational efficiency, cost-effectiveness, and competitive edge.

• Sustained Policy Support: Consistent government policies promoting infrastructure development create a stable business environment, ensuring LCC’s long-term growth and leadership in India’s EPC sector.

Peer Group Comparison

Name of the Company	Face Value (₹)	Revenue (₹ in million)	Basic (₹)	P/E a	RONW (%)	NAV (₹)
LCC Projects Limited	5.00	24,389.12	4.48	–	31.87%	14.07
Peer Groups
Vishnu Prakash R Punglia Limited	10.00	14,738.65	10.95	15.72	16.95%	57.85
Enviro Infra Engineers Limited	10.00	7,289.15	8.13	28.14	36.43%	21.35

Key Insights

• Face Value: LCC Projects Limited has a face value of ₹5 per share, which is lower than its listed peers, Vishnu Prakash R Punglia Limited and Enviro Infra Engineers Limited, both having a face value of ₹10 per share. A lower face value does not affect market price but influences the number of shares issued.

• Revenue: LCC Projects Limited reports the highest revenue of ₹24,389.12 million, surpassing Vishnu Prakash R Punglia Limited at ₹14,738.65 million and Enviro Infra Engineers Limited at ₹7,289.15 million. This indicates LCC’s larger market presence and operational scale in the industry.

• Basic EPS:LCC Projects Limited has a Basic EPS of ₹4.48, which is significantly lower than Vishnu Prakash R Punglia Limited (₹10.95) and Enviro Infra Engineers Limited (₹8.13). A lower EPS suggests comparatively lower profitability per share, despite higher revenues.

• P/E Ratio: LCC Projects Limited’s P/E ratio is not available, while Vishnu Prakash R Punglia Limited and Enviro Infra Engineers Limited have P/E ratios of 15.72 and 28.14, respectively. The P/E ratio helps investors assess valuation, with a higher value indicating higher market expectations for future growth.

• Return on Net Worth: LCC Projects Limited has a strong RONW of 31.87%, outperforming Vishnu Prakash R Punglia Limited (16.95%) but lagging behind Enviro Infra Engineers Limited (36.43%). This suggests efficient capital utilization, leading to better shareholder returns.

• Net Asset Value: LCC Projects Limited has a NAV of ₹14.07, significantly lower than Vishnu Prakash R Punglia Limited (₹57.85) and Enviro Infra Engineers Limited (₹21.35). A lower NAV may indicate lesser asset backing per share compared to its peers.

Key Strategies for LCC Projects Limited

Expanding Geographical Presence in India

LCC Projects Limited aims to strengthen its presence in India by expanding operations beyond its existing 11-state footprint. The company seeks to capitalize on regional growth trends, mitigate risks associated with geographic concentration, and diversify revenue sources for sustained business expansion.

Diversifying and Optimizing Project Portfolio

LCC Projects Limited plans to broaden its project mix by undertaking complex, large-scale projects beyond water management. By venturing into renewable energy, mining, and infrastructure, the company intends to leverage industry demand, enhance expertise, and strengthen its position in multidisciplinary EPC segments.

Investing in Technology and Operational Efficiency

LCC Projects Limited continues investing in advanced technology to enhance project execution, engineering, and design capabilities. Through ERP systems, IoT, SCADA, and predictive analytics, the company aims to optimize cost efficiencies, improve operational effectiveness, and maintain a competitive edge in project management.

Focusing on Cost Management and Financial Strength

LCC Projects Limited prioritizes cost management by optimizing working capital and ensuring competitive pricing strategies. Strengthening financial capabilities enables the company to bid for larger projects, secure bank financing, and improve profitability while maintaining high-quality execution standards across its diverse project portfolio.