BCPL Railway Infrastructure to focus on increasing average order size
- January 22, 2021
BCPL Railway Infrastructure Ltd will focus on increasing its average order size from Rs.40 crore currently, to around Rs.75 crore, in the medium term.
The optimism comes from the significant opportunity provided by Indian Railways (IR) for railway electrification works. In a recent investor presentation, BCPL observed that of the total railway network of around 68,155 route km (rkm), as of March 31, 2020, only around 58 per cent is electrified. This presents imminent opportunity for railway electrification EPC contractors like BCPL Infrastructure, especially because IR has pledged 100 per cent electrification of its network over the next three and a half years.
As of December 31, 2020, BCPL had an outstanding order book position of Rs.193.61 crore with several other projects in the bidding stage. BCPL has already earned L1 position with respect to two contracts, both of Eastern Railways, aggregating Rs.35.64 crore.
Major orders on hand included a Rs.51.60-crore order from Rail Vikas Nigam Ltd (RVNL) for electrification of a 35-rkm section in Assam. This mandate, awarded in October 2020, is scheduled for completion by April this year. A Rs.36.79-crore order from the Nagpur Division of IR also features amongst orders on hand.
Highlighting the importance of electrification, BCPL observed that electric traction today accounts for 37 per cent of the traction fuel cost of IR but it accounts for a much higher 65 per cent of goods traffic and 51 per cent of passenger traffic. The Indian Railways has estimated that converting its network on electric traction would help save a whopping Rs.8,000-10,000 crore on diesel costs. Electric traction costs half of diesel traction, according to industry estimates.
Order inflow
BCPL Infrastructure had witnessed order inflows of Rs.78.56 crore in FY20. There were five orders won, out of which four related to railway electrification in eastern India, spanning Odisha and West Bengal. One order was from Firozpur Division, Northern Railway, for works in Punjab.
In the first three quarters of FY21 (up to December 31, 2020) alone, BCPL has already won orders aggregating Rs.68.02 crore. This order inflow has come from just two orders. Considering that it had won five orders in FY20, an increase in the average order size over the two years appears to have taken place.
If the orders for which BCPL is placed L1 (discussed above) are awarded in the last quarter (January to March) of FY21, the company will end the year with a much higher order inflow compared with FY20.
Expansion of footprint
BCPL, in the presentation has highlighted the company’s endeavour to expand its geographical footprint pan India. Currently, the company’s railway electrification activities are concentrated in eastern India (West Bengal, Bihar, Jharkhand and Odisha), Andhra Pradesh, Chhattisgarh, Punjab and Haryana.
(Featured image for illustration only)