Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- KNR Constructions Ltd (BOM:532942, Financial) reported a 14% year-on-year growth in total revenues for Q4 FY24, reaching INR1,410 crore.
- The company achieved an EBITDA margin of 23.7% for FY24, indicating strong operational efficiency.
- KNR Constructions Ltd (BOM:532942) has a robust order book position of INR6,505 crore, providing visibility for the next 1.5 years.
- The company is targeting an order inflow of INR5,000 crore to INR6,000 crore for FY25, indicating a positive outlook for future growth.
- KNR Constructions Ltd (BOM:532942) is exploring new sectors such as metro, tunneling, railway, mining, and solar to diversify its project portfolio and mitigate risks.
Negative Points
- Net profit for Q4 FY24 decreased to INR98 crore from INR129 crore in Q4 FY23, indicating a decline in profitability.
- The company has significant receivables from the Telangana government amounting to roughly INR800 crore, which could impact cash flow.
- KNR Constructions Ltd (BOM:532942) made provisions towards impairment of equity and doubtful advances, impacting its financial results.
- The company faces challenges in executing projects due to delays in receiving appointed dates for HAM projects and issues with land acquisition.
- There is uncertainty regarding the payment of pending receivables from irrigation projects, which has led to legal actions and could affect project execution.
Q & A Highlights
Q: The order inflow has been subdued, and the order book is around INR6,500 crore. What are the expectations for order inflow and execution for FY25 and FY26?
A: We are targeting an order inflow of INR2,000 crore to INR3,000 crore in the next quarter and INR5,000 crore to INR6,000 crore for the entire year. Execution for FY25 might be challenging, but we aim to maintain last year's figures. FY26 is expected to be better.
Q: What kind of growth are you expecting for FY25 based on the current order backlog?
A: FY25 might be a bit dull due to various challenges, including unseasonal rains and pending projects. We aim to deliver figures similar to last year. Margins are expected to be in the 16%-17% range, depending on the quality of new orders.
Q: Can you provide details on the partnership with Cube Highways and other partners for BOT toll projects?
A: We are discussing partnerships with Cube Highways and other developers. Cube will hold 74% in some projects, and we will handle the EPC part. We are also exploring metro, irrigation, and railway projects with Nagarjuna Constructions Limited.
Q: What is the status of the pending receivables from the Telangana government for irrigation projects?
A: The total receivables amount to roughly INR800 crore. We have taken legal action to expedite payments. The government is expected to resolve this issue post-elections.
Q: How much equity needs to be infused into HAM projects, and what is the timeline?
A: We need to infuse around INR500 crore in equity for HAM projects. INR350 crore will be required in FY25, INR90 crore in FY26, and INR64 crore in FY27.
Q: What are the expectations for order inflow in the next two to three months, and is it linked to the 100 days plan of the Ministry of Road Transport and Highways (MoRTH)?
A: We are targeting INR2,000 crore to INR3,000 crore in the next two to three months. This is part of the broader plan to achieve INR5,000 crore to INR6,000 crore for the year. The 100 days plan includes 1,700 kilometers of highways, which will be awarded post-election.
Q: What is the status of the two HAM projects in Karnataka, and when are they expected to start?
A: The appointed dates for the two HAM projects in Karnataka are expected by July end or August second week. Land acquisition is around 50%-45% complete.
Q: What is the CapEx plan for FY25?
A: CapEx for FY25 is expected to be between INR100 crore to INR200 crore, depending on the new projects we secure.
Q: What are the expectations from the Vivad se Vishwas scheme for FY25?
A: We expect around INR70 crore from the Vivad se Vishwas scheme in the first half of FY25. Other claims are pending in court.
Q: Are you eligible for expressway projects, and what is the strategy for bidding?
A: We are not currently eligible for expressway projects due to specific criteria. However, we are exploring partnerships to gain experience and qualify for future projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
