SADBHAV

ENGINEERING
GENERAL OVERVIEW
Sadbhav Engineering is a small cap company which means that it has an higher risk of
investment but it also means that the reward for that investment is also high. It majorly
deals in three engineering products
a)building roads and highways.
b)Mining
c)Irrigation
It has implemented projects including Construction of Roads & Highways, Bridges, Mining
and Irrigation supporting infrastructure. It has successfully constructed more than 4,500
lane kms of Roads and Highways (both National and State Highways) while an additional
2,200 lane kms are under various stages of construction. In the near future, they will be
participating in the Government of India’s NHDP initiative of developing over 50,000 kms of
National Highways in several phases and would also be taking a part in national building
which envisions providing network of roads to around 23,000 villages all over India. They are
also looking forward to participate in SARDP-NE, which would establish road connectivity to
the state capitals, district headquarters and remote areas of North-East region of India.
Their track record shows success in executing a 5-year project for GIPCL involving excavation
of overburden and lignite at Vastan Mines. They have executed contracts worth 350 million
cubic meters of Overburden/Waste and 19.5 million tonnes of Coal & Lignite and 1.9 million
tonnes of Uranium Ore. As on 31st March, 2018, the total value of mining contract under
execution is approximately Rs. 1500 Cr.
Over one month company has a positive change of 24.32 % and it is expected to grow more
over years. This type of shares would be appropriate for an long term investment. This
company provides promising future to urban and agricultural infrastructure and this why I
am personally interested in this company.

MANAGEMENT
A proper management is essential to drive a company into profits and budge losses and thus
make it successful. Following are the top executives of management at Sadbhav engineering
are:

1. Mr. Vishnubhai M Patel

Founder Chairman & Managing Director
Mr. Vishnubhai M Patel (27 January 1942 – 25 December 2018) was the founder of
Sadbhav Group. He was a born leader and a true visionary. A self-motivated man with
unending determination to dream and transform it into reality. He was also a very loving
 human being who cared about Sadbhav family and communities that he worked for. He
had a very humble beginning, but with his foresightedness, persistence and an attitude
to do something for the society, he laid the foundation of Sadbhav Engineering Ltd., a
world-class infrastructure company. Incorporated in the year 1988, Sadbhav Engineering
successfully completed various projects of national significance in the sectors of Roads &
Highways, Mining and Irrigation supporting infrastructure. A man with simple thoughts
and great deeds, Vishnubhai is and will always remain our inspiration and strength. His
extraordinary work will always guide us towards success.

2. Mr. Shashin V Patel

Chairman and Managing Director
He holds a Masters degree in Business Administration from K.S. School of Business Management,
Gujarat University. He is associated with company since May 23, 2000. His scope of work includes
overview of the day to day affairs of our company and making strategic management decisions.
He is also in-charge of the Management Information System in our office. He is actively
participating in bidding process and execution of various mining and irrigation projects.

3. Mr. Vasistha C Patel

Executive Director

He is a Civil Engineer by profession. He is associated with the company since September 09, 2012.
He is having more than 15 years of experience in the construction industry. He is actively
participating in bidding process and execution of various road projects. He is also in-charge of
purchasing of construction materials. He has also track records for successfully completing the
various projects in time.

4. Mr. Vipul H Patel

Executive Director

He is B.E. Civil and has experience in the field of road sector, metro rail, irrigation, building and
mining sector. He is looking after the road projects, metro rail projects in north India, irrigation
and pipeline project in M.P. He is also playing important role in bidding of the new projects.

5. Mr. Nitin R Patel

Executive Director

He is a Chartered Accountant. He is associated with the company since August 01, 1999. His
current areas of responsibility include execution of project, cost analysis, claims and arbitration,
as well as overall functioning of the entire corporate affairs of our company. He also plays an
important role in policy implementation and liaising with banks & financial institutions for
obtaining funds. He also participates in the bidding process and execution of road projects.

 6. Mr. Sandip V Patel
Independent Director

He is a practicing Chartered Accountant and has a vast experience in taxation, audit including
statutory audit of companies and financial institutions, revenue audit of nationalized banks, audit
of stockbroking houses and DP. He has also experience in management consultancy, structuring
international transactions, developing internal control systems, cost planning and project
financing, raising funds for working capital requirements etc. He has also the experience of
consulting and representing before authorities in respect of direct taxation for domestic and
international client. He has worked as a committee member of the Ahmedabad branch of Western
Regional Council of ICAI.

7. Mr. Atul N Ruparel
Independent Director

He is a Practicing Chartered Accountant having more than 15 years of experience in the field of
audit, taxation, finance and consultancy which consists of Statutory and Internal Audits,
Management Consultancy, Tax Planning, Project Financing etc.

8. Mr. Arun S Patel

Independent Director

He is a practicing Chartered Accountant having more than 22 years of experience in the field of
audit, taxation, accounts and finance.

9. Mr. Mirat N Bhadlawala

Independent Director

He is a Commerce Graduate. His areas of expertise boast of Procurement, Negotiation, Contract
Management, Marketing and Business Strategy acquired over a period of 23 years. Hailing from a
family having strong business background of more than 50 years with Royal Dutch Shell Group of
Companies established in India, he however chose to tread on a path of his own. He has an
experience of working with public sector oil marketing companies as well as private sector big
players. He is also closely associated with Tiki Tar Group of Industries, India’s largest private
sector Bitumen Company. Associated closely with various multinationals and Indian research and
development agencies viz. Central Road Research Institute and IIT – Guwhati along with DuPont
for development of sustainable road infrastructure.


10. Mrs. Purvi S Parikh

Independent Director

She is a practicing Chartered Accountant having 11 years experience with 9 years of industry
experience in the core business process of Finance and Accounts and 2 years exposure of
practicing in the field of management assurance in diversified assignments. She has worked with
L&T for almost four years and has wide knowledge of diverse industries and their business
process, operations and regulations.

A family operated business is what actually lacks professionalism as the management and the
ownership are in the hands of family members, where the desires and demands of the family
members clash with the company objective and goals which they wish to achieve whereas in a
professionally running business the all the work is done under the supervision of professional
managers, where professionalism is given utmost priority. As it is clear from the list of managers
provided and how they got into company and rose their position into managerial level, Sadbhav
engineering is professionally operated.

SWOT ANALYSIS
STRENGTHSè
• Sadbhav Engineering expects road project execution to pick up as its
executable order backlog is now robust
• The company has an order book of ₹10,000 crore in the road sector with
executable order backlog at ₹60,000 crore. The balance ₹40,000 crore is
expected to get execution-ready by end-1QFY20, when land becomes
available for these projects.
• Sadbhav Engineering Limited (SEL) is said to be in advanced stages of
divesting its road assets in Sadbhav Infrastructure Projects Limited (SIPL,
listed subsidiary with 69 per cent stake) as per various media reports. Canada
Pension Plan Investment Board through the infrastructure investment trust is
looking to acquire 12 of SIPL’s operational road assets for nearly Rs 3,000
crore.
• Established track record in the Indian road construction sector and
demonstrated capability for timely execution of large size BOT road projects:
• Healthy and diversified order book
• Completion of debt refinancing activity in BOT projects of the group
• Low overall gearing
 • Favourable prospects for the road construction sector in the medium term on
the back of various initiatives undertaken by the Government of India
• Road sector witnessing higher credit availability from the bank
• Strong foothold in overseas project
• Experienced and highly qualified human resources

WEAKNESSè
• SIPL had a consolidated debt of Rs. 9,521 crore as of March 2018, of which
SPVs deal stood at Rs. 6,971 crore.
• Sadbhav Engineering mainly does business with various state government, so
during the change of government or any governmental policy would directly
affect the company
• Exposure of the group to inherent risks associated with BOT projects
• Working capital intensive operations
• Moderate debt coverage indicators
• Inherent challenges involved in construction industry

OPPORTUNITYè
• Sadbhav Engineering expects revenue booking of ₹5,000 crore in FY20E as
the entire road EPC order book comes under execution.
• India being a developing economy and government’s major thrust is on
infrastructure development which is evident from allocation of sizeable
amount in every budget of the country.
• As the company is actively engaged in the development of road and
infrastructure project and have a good track records of the execution of
project on time and hence company is hopeful of getting more and more
project not only from public undertaking but also from private sector.

THREATè
• Due to its business dependency on various state government, their maybe
late realisation of its revenue, which would affect the working capital
requirement of company.
• This may cause labour unrest or temporary shut down of one of its
department.
• The inherent risk involved in the construction industry including aggressive
bidding, traffic risk, interest rate risk, volatile commodity prices and delay in
project progress due to resistance towards land acquisition and regulatory
clearances have collectively affected the credit profile of the developers
• Shutdown/breakdown of any one project cause huge losses to the company.

 COMPETITIVE ANALYSIS
Few of the main competitors of Sadbhav Engineering areè

a) L&T b) Adani Port c)Siemens d)ABB India

Comparison of L&T with respect to this companies are given below:

L&T Adani Ports Siemens ABB India Sadbhav

Engineering
Net worth (in Cr) 52,550.72 20,491.67 8,305.40 4,007.32 2,033.67
Total Debt (in Cr) 10,344.77 24,290.94 0 2.03 1,370.10
Total Liabilities 62,742.29 44,782.61 8,305.40 4,009.35 3,403.77
(in Cr)
Net Current Assets 29,973.52 20,977.03 6,836.60 3,032.98 2,297.23
(in Cr)
Total Assets 62,742.29 44,782.61 8,305.40 4,009.35 3,403.77
(in Cr)
Total Income 91,527.75 7,557.38 13,103.30 7,083.16 3,585.65
(in Cr)
EPS (in Rs) 47.60 12.74 25.10 24.11 10.89
Market Cap (in Cr) 217,928.14 84,950.44 46,699.83 33,957.26 3,319.89
Sales Turnover 86,987.86 5,336.38 12,725.10 6,690.12 3,549.23
(in Cr)
Net Profit (in Cr) 6,677.70 2,637.72 893.90 510.89 186.85

CONCLUSION
Sadbhav engineering is a civil engineering company based in Ahmedabad, Gujarat.
The company has implemented projects in Construction of Roads and Highways,
Bridges ,mining and Irrigation supporting infrastructure. Sadbhav Engineering Ltd is
listed on BSE and NSE. The company worked for clients including NHAI, Sardar
Sarovor Narmada Nigam, Coal India, GIPCL , GHCL , L&T , HCC , Punj Lloyd
among various others. The company has a great future and being Small Cap it has a
huge potential of growth in the very future, given that it has a proper management
system. In developing nation like India where there is and would be an onset of
technology and engineering, Sadbhav engineering Ltd. is in for huge success, more
than it is now.