Release Date: August 06, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NCC Ltd (BOM:500294, Financial) achieved a 23% increase in turnover at the standalone level, reaching INR4,747 crores compared to the same quarter last year.
- The company reported a 24% increase in PAT, with INR200.74 crores in Q1 FY25 compared to INR162 crores in Q1 FY24.
- EBITDA margins stood at 9.3% for Q1 FY25, with expectations to reach 9.5% for the full year.
- The order book remains strong at INR52,626 crores as of June 2024, with a healthy prospective pipeline of projects worth close to INR2 lakh crore.
- NCC Ltd (BOM:500294) has received significant allocations for infrastructure development in Andhra Pradesh and Bihar, providing growth opportunities.
Negative Points
- The company's debt increased by INR814 crores from March 2024 to June 2024, reaching INR1,819 crores.
- Trade receivables increased to INR3,654 crores as of June 2024, up from INR3,063 crores the previous year.
- The debtors' collection period increased to 86 days in June 2024, compared to 57 days in March 2024.
- Pending payments from Andhra Pradesh projects remain a concern, with INR300 crores expected to materialize in the coming weeks.
- The company faces uncertainties in the billing process and payment releases due to elections and government changes, impacting cash flow and debt levels.
Q & A Highlights
Q: Do you think the old projects can be revived meaningfully with the new government in Andhra Pradesh?
A: There are three parts to the AP projects. Some orders were canceled in 2019, some were abandoned but not canceled, and some continued. The Capital City projects are still in force, and the government has asked us to restart these works. We estimate about INR5,000 crores worth of orders may restart, but further clarity is needed.
Q: How do you view the order prospects for the rest of the year, given a soft Q1 in terms of order inflow?
A: We have a strong order pipeline and expect to achieve our guidance for the first half of the year. We are confident in meeting our full-year guidance for order booking.
Q: Is there a possibility that the 15% revenue growth guidance for this year could increase to 18-20%?
A: Based on the progress in the first quarter, there are chances for higher growth. However, the third and fourth quarters' performance will depend on new orders secured in FY24-25.
Q: What is the status of pending payments for projects in Andhra Pradesh?
A: Pending payments for Capital City projects are about INR150 crores, and for running projects, about INR350-400 crores. We expect nearly INR300 crores to materialize in a couple of weeks.
Q: What is the outlook for the Jal Jeevan Mission and Smart Meter projects?
A: We have completed 60% of the Jal Jeevan projects and expect to complete 95% by March '25. For the Smart Meter project in Bihar, 80,000 meters have been supplied, and 65,000 installed. The Maharashtra project is progressing slowly due to client priorities and upcoming elections.
Q: What is the current debt level, and what is the target by the end of FY25?
A: The debt as of June 30, '24, is INR1,819 crores. We plan to reduce it to INR500 crores by the end of FY25.
Q: What is the status of the Dhaka settlement payment?
A: We have paid the second installment of INR45 crores due in June, and the final installment is due in December.
Q: Are there any updates on finding a partner for the Smart Meter business?
A: Discussions with potential investors are ongoing. We will finalize a partner as the project pace picks up.
Q: What is the order inflow guidance for this year, and does it include any orders from Andhra Pradesh?
A: The guidance is INR20,000 crores to INR22,000 crores, excluding any potential orders from Andhra Pradesh. Any orders from AP would be a positive surprise.
Q: What is the status of the pending real estate payments for the land sold in Vizag?
A: The pending equity payment is INR33 crores, expected in the next couple of months. The loan amount of INR377 crores is expected over the next two years.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
