BSE: 543364
Market Cap: ₹ 271 Cr.
Company Profile
Markolines (Bse Small cap) is a group of companies based in Mumbai. The company primarily provides highway maintenance and other road-related services. Markolines Pavement Technologies was incorporated in 2002 and got listed on the Bse small cap in 2021. The company claims to be India’s largest company in the highway sector, focusing solely on highway maintenance.
Business Model and Focus
Markolines operates on a B2B business model with government and private companies. Moreover in the latest conference call, the management also clarified the company is more into the service industry than construction or construction of the roads and infrastructure.
Clients of Markolines, source: annual report
Services offered by Markolines Pavement Tech
Highway Maintenance: This Bse Small cap company offers a range of maintenance services to address various road conditions. The company provides experienced professionals to handle repairs, replacements, and maintenance projects, guided by the principles of health, safety, security, and the environment (HSSE).
Specialized Maintenance Services: The company offers high-end maintenance services such as micro-surfacing, a cost-effective road surface treatment, and cold in-place recycling (CIPR), which involves removing and reusing the existing asphalt surface.
Construction services: In addition to Markolines’ regular services, the company also offers construction services, including soil stabilization which involves converting ground for the construction of roads, airports, ports, and factories. The services also include full-depth reclamation (FDR) and building tunnels.
How is the Top Management?
The Founder and MD is Mr. Sanjay Bhanudas Patil with 20 years of experience in trading industrial goods, construction, and infrastructure.
Mr. Karan Atul Bora, the executive director, has expertise in operations, finance, project management, and business development. As of now, the combined promoter holding is 73%, and none of the directors are on the RBI List of willful defaulters.
How Much Money is the Management Taking from The Business?
In the latest available annual report for 2023, it is noted that the Managing Director, Mr Sanjay Patil, is receiving a salary that is 35.46 times the average salary in the organization.
For instance, if the average salary of an employee at Markolines is ₹1,00,000 per year, Mr Sanjay’s salary would be ₹35,46,000, which is a substantial amount. Additionally, the Executive Director, Karan Bora, is receiving a salary that is 17.73 times. While the CFO, Vijay Oswal, is getting 8.86 times the average salary.
Financial Brief of Markolines Pavement Technologies
The Bse small cap company closed a great 2023 with a sales growth of 67%. However, in the same year the operational profit (EBIT) growth was decreased. When the analysis was done, it was found out that the decrease was due to an increased raw material cost.
With a promising company and claiming the largest company in the highway sector, the sales growth of 2024 with just 11.39% is not justified. It will be interesting to see what the management has to say about this. However, the profitability increased (net profit margin) in the financial year 2024 from 1.9% to 7%.
Capital Expenditure
The Return ratios like return on capital are decreased because of a recent Capital expenditure. Markolines has made a huge capex and has almost tripled it plant and machinery.
Order Book
Markolines has possibly done such a huge capex to meet the order book for this year. The order book is showing an open order of ₹287 Crs to be fulfilled.
Source: Company filings
The Industry and its growth
The budget for 2023 has given a significant boost to infrastructure development, with signs of moderation in the second half of FY 22/23.
After the Modi government, the construction sector in India has seen enormous growth in both commercial and domestic areas, with a major focus on highways. The Minister of Road Transport and Highways, Nitin Gadkari, aims to enhance India’s road infrastructure to match that of the United States within the next five years.
Disclaimer
The information presented here is for educational purposes only and should not be considered financial advice. Please do your own research before making any investment decisions.
