Release Date: August 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue from operations in Q1 FY25 grew by 13% to INR1,281 crore compared to INR1,131 crore in Q1 FY24.
- Operating margin for Q1 FY25 increased by 14% to INR184 crore compared to the previous year.
- Net profit for Q1 FY25 grew by 19% to INR86 crore, with the PAT margin standing at 6.7% compared to 6.4% in Q1 FY24.
- The total order book as of June 30, 2024, stood at INR19,820 crore, providing strong revenue visibility.
- The company has diversified its order book across sectors and geographies, enhancing its engineering capabilities and project portfolio.
Negative Points
- Debt levels have increased, with a gross debt-equity ratio of 0.27x and a net debt-equity ratio of 0.03x.
- Working capital requirements have risen, partly due to the Chennai project, leading to higher working capital limits.
- Unbilled revenue has slightly decreased from INR553 crore to INR546 crore, indicating potential delays in billing.
- The execution of new projects like the MSRDC project may face delays due to land acquisition and other preliminary work.
- CapEx requirements are expected to be high, with an estimated INR400 crore to INR500 crore needed over the next two years, primarily for the Chennai and GMLR projects.
Q & A Highlights
Q: What are the order inflows expected for this financial year considering the current order book?
A: We are already L1 in projects worth around INR6,500 crore and are targeting an order book close to INR8,000 crore for this financial year. With Q1's performance, this may further increase.
Q: What is the execution run rate expected given the large order book?
A: We are looking at a top line close to INR5,600 crore to INR5,700 crore for this fiscal year, which will be a 15% growth year-on-year. Significant contributions from new orders will start from Q3 onwards.
Q: Why has the debt increased this quarter, and what is the current debt-equity ratio?
A: The increase is mainly due to working capital requirements for the Chennai project. We opted for bank financing at a cheaper rate instead of mobilization advance. The gross debt-equity ratio is 0.27x, and at the net level, we are almost debt-free with a 0.38x debt-equity ratio.
Q: What is the status of the Chennai project and the mobilization advances?
A: We have deployed around INR65 crore in working capital for the Chennai project. The outstanding mobilization advance as of June 30 is INR407 crore, and unbilled revenue has decreased from INR553 crore to INR546 crore.
Q: What is the expected CapEx for FY25?
A: Typically, we do a CapEx of INR100 crore to INR250 crore for maintenance. However, for the next two years, we expect a CapEx of INR400 crore to INR500 crore, mainly due to the Chennai and GMLR projects.
Q: What is the status of the GMLR project?
A: Preliminary work has started, and the TBM has been ordered. Full-fledged work is expected to start after the monsoon.
Q: What is the guidance for revenue growth and EBITDA margin for FY26?
A: We expect a 15% year-on-year growth and aim to be a $1 billion revenue company by FY27 with an order book of around INR25,000 crore. Margins are expected to improve from 14%-15% to 15%-16% due to operational efficiency.
Q: What is the current bidding pipeline and expected order inflows?
A: We are looking at bidding for projects worth INR20,000 crore to INR30,000 crore in the next nine months. We aim to secure orders with good margins, targeting a minimum of INR8,000 crore in new orders this fiscal year.
Q: What is the status of the MSRDC projects and their expected start date?
A: The MSRDC projects are expected to start post-monsoon, with LOI anticipated by the end of August or early September. The work will commence immediately after the monsoon.
Q: What is the company's strategy regarding debt levels and fund-based limits?
A: We aim to maintain a debt level of INR700 crore to INR750 crore by the end of FY25 and FY26. Fund-based and non-fund-based limits are utilized at around 75%, and we are applying for new limits as needed.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
