The scope of the project includes design and construction of underground stations and associated tunnels for Package 1 and Package-7 in Line-3. The project bagged by Larsen & Toubro (L&T) along with its partner, STEC is scheduled to be completed in 48 months.
Mumbai: Larsen & Toubro and J Kumar have bagged two packages each of the total seven awarded by the Mumbai Metro Rail Corporation as a part of the third phase of the metro network in the city, the government agency said Tuesday.
Mumbai Metro Rail Corporation, a joint venture between government of Maharashtra and the central government, is developing the 33.5-km long underground corridor with 27 stations and has already secured loan assistance from Japan International Cooperation Agency.
Larsen & Toubro’s joint venture with STEC of China bagged orders worth Rs 5,273 crore, which includes Package 1 (Cuffe Parade-VidhanBhavan-Chuchgate-Hutatma Chowk) and Package 7 (Marol Naka-MIDC-SEEPZ). This will be completed in 48 months.
“This is a significant win in the heavy civil infrastructure space and we hope that this is a sign for many such projects involving vital infrastructure that are in the offing,” said S.N. Subrahmanyan, Deputy Managing Director and President, L&T.
HCC’S joint venture with MMS of Russia bagged the Rs 2,523 crore Package 2 (CST-Metro-Kalbadevi, Girgaum-Grant Road).
J.Kumar’s joint venture with CRTG bagged Package 5 (Dharavi-BKC Metro- Vidyanagari-Santacruz) and Package 6 (CSIA-Sahar Road-CSA International) worth total Rs 4,935 crore.
DOGUS-Soma JV bagged the Rs 2,557.84 crore Package-3 (Mumbai Central-Mahalaxmi Metro- Science Museum-Acharya Atrey Chowk-Worli). While CEC-ITD CEM-TPL consortium bagged the Rs 2830.10 crore Package 4 (Siddhivinayak-Dadar Metro-Shitladevi).
Reacting to the news, shares of the companies rose, L&T up 0.6%, HCC up 10.3%, and J Kumar Infraprojects ended up over 19%.
“The metro orders are a big positive for HCC and J Kumar and provides better earnings visibility over the medium term. But the stocks re-ratings would depends on the timely execution of the order backlogs and also on how these companies would reduce their existing debt” said Daljeet Kohli, head of research, IndiaNivesh Securities.
While J Kumar Infra is currently trades at 15 and 16.29 times FY 2017 and FY 2018 estimated EPS, HCC trades at 23 times and 16 times its FY 2017 and FY 2018 estimated revenue.
“Though J Kumar stands out for its ability to execute complex projects and forge JVs, the stock’s relegation in last few months stemmed from J Kumar’s miserable order execution and unexpected delay in award of Mumbai L3 orders” said Kishan Gupta, analyst, CD Equisearch.
After Reliance Infrastructure exited the Mumbai Metro 2 project, the government of Maharashtra abandoned the Public-Private Partnership model.
Private developers have been shying away from development project as they struggle with stretched balancesheets and do not want to raise more debt. But now the government is developing these projects on its own and awarding cash contracts to these companies.
The third phase is split into different packages given the wide area it covers and the complexity of underground metro construction.