PSP Projects rises 4% after Gujarat Pollution Control Board NOC for Precast Plant

PSP to execute the work orders of Precast received from various clients.

Shares of PSP Projects rose to 4% in the early trade session on Thursday after the company informed the bourses that the Gujarat Pollution Control Board has granted a Consent to Establish (NOC) for setting up of industrial plant for manufacturing of precast in Sanand in Gujarat.

PSP has set up a 1 mn sq ft (to be increased to 3 mn sq ft with CAPEX of Rs 15-20 crore) precast concrete plant near Sanand, Gujarat for Rs 98 crore as phase- I. At current capacity, the plant can generate revenue of Rs 100 - 150 crore/year with similar to the core EPC margin. The company plans to expand the plant after which it would be able to produce revenue of Rs 250-300 crore per year.

The plant will bring about backward integration capability and will strengthen PSP’s capabilities by converting a portion of work to off-site manufacturing. It will produce a wide range of products for infrastructure and general development projects including precast slabs, beams and columns, viaduct segments and piers, noise barrier walls, underground water tanks, among others, which can be sold directly to infrastructure companies, EPC contractors and other real estate players, further adding to the company’s revenues. As a construction player, using precast will decrease the turnaround time of projects and help the company operate in challenging terrains with ease.

The management of the company believes that it will help PSP increase op­erating efficiency and margins, help in delivering larger volumes, reduce labour dependence and manpower requirement, reduce the safety concerns, and allow faster delivery.

At noon on Thursday, the stock of PSP Projects Limited was seen trading at Rs 468.10, up by 3.75% or Rs 16.90 per share as against a 0.81% gain on the benchmark index. The 52-week high of the scrip is recorded at Rs 552.20 and the 52-week low at Rs 394 on the BSE.