Release Date: May 23, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ashoka Buildcon Ltd (BOM:533271, Financial) reported a 22% growth in total income for Q4 FY24, reaching INR2,533 crore compared to INR2,068 crore in the same quarter last year.
- The company successfully concluded the sale of Unison Enviro Private Limited to Mahanagar Gas Limited, receiving INR286.67 crore for its 51% stake.
- Ashoka Buildcon Ltd (BOM:533271) received several new project awards, including a six-laning project in Bihar worth INR520 crore and a stilt bridge project for Navi Mumbai International Airport worth INR339.9 crore.
- The company has a robust order book of INR11,697 crore as of March 31, 2024, with a significant portion in roads and railway projects.
- The company is making progress in asset monetization, having acquired 50% shares from GVR Infra Projects in GVR Ashoka Chennai ORR Limited, making it a wholly-owned subsidiary.
Negative Points
- Despite the growth in income, the EBITDA margin for Q4 FY24 stood at 8.6%, which is relatively low.
- The company has a high consolidated debt of INR7,139 crore as of March 31, 2024.
- There were delays in the monetization of assets, particularly the HAM and BOT projects, which have been in negotiation for several quarters.
- The company’s order intake for FY24 was only INR1,953 crore, which is lower than expected.
- Ashoka Buildcon Ltd (BOM:533271) has faced challenges in achieving higher margins, with expectations of improvement only in the latter half of FY25.
Q & A Highlights
Q: Could you give me your order inflow for FY24?
A: The total order intake for FY24 was INR1,953 crore.
Q: What would be your future guidance on order inflow and revenue for FY25?
A: For FY25, we are targeting around INR12,000 to INR15,000 crore of order book.
Q: Could you repeat your part on asset monetization?
A: We have 11 HAM projects, 6 BOT projects, and 1 annuity project to be monetized. We are finalizing the share purchase agreement with potential investors and are close to signing it.
Q: What is the peak debt for FY25, and how are you planning to reduce it?
A: Our debt at ABL standalone will remain in the same range based on increased turnover. We expect to reduce working capital debt by 50% upon asset monetization.
Q: Why were margins not as high as expected in Q4 FY24?
A: The margins will improve post Q2 FY25 due to the execution of new contracts with better margins. We expect margins to increase by at least 1.5% in H2 FY25.
Q: Why didn't you participate in the MSRDC tenders earlier?
A: We initially decided not to bid for state government projects but have revised that decision and are now participating.
Q: What is the status of the HAM project monetization?
A: We are at the final stages of negotiating the SPA for the HAM and BOT projects and expect to sign the SPA before June.
Q: What is the revenue growth target for FY25?
A: We expect to grow by around 15% for FY24-25 on the EPC front.
Q: What is the pending equity infusion for HAM projects?
A: The balance equity commitment for our HAM projects is approximately INR153 crore.
Q: What is the guidance for PAT for FY25?
A: Depending on the EBITDA margins, we should be in the range of 5% to 6% for PAT.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
