Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ITD Cementation India Ltd (BOM:509496, Financial) reported its highest ever operating income of INR2,381 crore, representing a 30% year-on-year growth.
- EBITDA for the quarter stood at INR237 crore, marking a 36% year-on-year increase.
- Profit after tax reached INR100 crore for the first time, showing a 100% year-on-year growth.
- The company's net debt to equity ratio is at a manageable 0.3 times, indicating a strong balance sheet.
- Significant progress on key projects like the Ganga Expressway, Chennai Metro, and Bangalore Metro, with some nearing completion.
Negative Points
- Political instability in Bangladesh has delayed the start of a significant project valued at INR1,500 crore.
- Monsoon season has temporarily slowed progress on the Ganga Expressway project.
- The company faces intense competition in the domestic market, which could impact margins.
- Interest costs could increase as the volume of operations grows and new orders are secured.
- Uncertainty regarding the parent company's stake sale could impact future operations and strategic direction.
Q & A Highlights
Q: What are the future prospects for the Bangladesh project given the current political instability?
A: We are closely monitoring the situation. We have secured the advance and have not yet mobilized significantly. The total project value is INR1,500 crore, spanning 2.5 to 3 years, with an estimated INR400 crore to INR500 crore expected this year.
Q: Are there any updates on the parent company stake sale?
A: The process is ongoing at the parent promoter level. It is still in the initial stages, and we will provide updates as they become available.
Q: What are the revenue growth expectations for the next three to four years?
A: We aim to maintain a growth rate of 15% to 25% annually.
Q: Are there any plans for margin expansion at the operating level?
A: We expect to maintain an EBITDA margin of around 10% to 11%, especially in the Indian market.
Q: Can you elaborate on the focus on international markets?
A: We are targeting international markets due to better contract terms and margins. However, the domestic market remains strong, particularly in marine and underground sectors.
Q: What structural changes have been made to improve execution rates?
A: We have focused on operational efficiencies and have a stable team with long-term experience. This has helped us execute projects faster and more efficiently.
Q: What is the current debt level and mobilization advances?
A: Gross debt is around INR800 crore, with net debt under INR500 crore. Mobilization advances are about INR1,300 crore, with approximately 75% being interest-free.
Q: What is the order inflow and order book expectation for the year?
A: We expect an order inflow of around INR10,000 crore for the year. The current YTD order inflow is INR2,000 crore, with another INR2,000 crore where we are L1.
Q: What are the core competencies of ITD Cementation?
A: We excel in marine jobs, underground metro projects, building work, road bridges, highways, and specialized foundation jobs like diaphragm wall piling.
Q: What are the opportunities in the overseas market?
A: We are targeting neighboring countries like Sri Lanka, Maldives, Bangladesh, East Africa, West Africa, and the Middle East for marine and other infrastructure projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
