Release Date: February 12, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Revenue increased by 8.08% YoY in Q3 FY24, reaching INR25,711 million.
- EBITDA grew by 27.55% YoY in Q3 FY24, with margins improving due to better project execution and reduced construction material prices.
- Profit after tax rose by 19.87% YoY in Q3 FY24, driven by improved EBITDA margins.
- The company reduced its debt by INR5,315 million during FY24, improving the net debt equity ratio to 36 basis points.
- Dilip Buildcon Ltd (BOM:540047, Financial) has a diversified order book of INR218,429 million, providing strong visibility for future growth.
Negative Points
- Order inflow for the year has been slower than expected, with only INR2,600 crores secured against a target of INR8,000 crores.
- The company faces challenges from increased competition in the road sector, impacting growth opportunities.
- Working capital days have only marginally improved, from 72 days to 67 days.
- The company has a high tax rate of 35%, which is expected to continue in FY25 and FY26.
- There are uncertainties regarding the timing of government project awards, which could impact revenue targets.
Q & A Highlights
Q: We are seeing a 5% to 10% revenue growth for this year. Are we confident of achieving INR3,000 crores-plus revenue in the fourth quarter?
A: Absolutely, we are confident that we will cross the INR3,000 crores revenue in quarter four. - Rohan Suryavanshi, Head, Strategy & Planning
Q: Is there a possibility that EBITDA margins will inch up to 13%-plus next year?
A: Currently, you should take the guidance that we've given in the past as the current number only. Any improvement will be kept in the back pocket and hopefully surprise you later. - Rohan Suryavanshi, Head, Strategy & Planning
Q: How much more order inflow can we expect in the next 1.5 months?
A: We have won orders worth about INR2,500 crores to INR2,600 crores year to date. There are under INR10,000 crores worth of orders in the road sector alone that we are awaiting to open. - Rohan Suryavanshi, Head, Strategy & Planning
Q: What is the debt reduction target for FY24 and FY25?
A: We have already reduced our debt by about INR500 crores-plus in the first nine months. We are targeting another INR300 crores reduction in Q4, aiming for a debt-to-EBITDA of about 1:1 by the end of FY24. In FY25, we aim to reduce it by a similar amount. - Rohan Suryavanshi, Head, Strategy & Planning
Q: What is the expected finance cost for Q4 and FY25?
A: The interest rate will be in the range of 9% to 10%. We are continuously negotiating with lenders to reduce the interest rates. - Sanjay Bansal, CFO
Q: Can you provide more details on the arbitration notice from Cube?
A: Cube has filed a claim against us regarding maintenance issues. We have sent a counterclaim. Cube is already arbitrating against the government for wrongful deduction in annuity payments. We are confident in our position as we have never had maintenance issues with other assets. - Rohan Suryavanshi, Head, Strategy & Planning
Q: What is the expected revenue growth for FY25?
A: Based on our current order book, we have enough visibility for the next year. Our growth target remains between 5% to 10%. - Rohan Suryavanshi, Head, Strategy & Planning
Q: What are the expected margins for the coal mining business?
A: We are expecting margins of around 20% in the coal mining business. - Rohan Suryavanshi, Head, Strategy & Planning
Q: What is the tax rate we can expect for FY25 and FY26?
A: The maximum tax rate will be 35%. - Sanjay Bansal, CFO
Q: When do we expect to receive the balance amount of the warrants from Alpha?
A: Alpha has 18 months from December 21, 2023, to subscribe to the shares. We expect the balance money to come within this period. - Devendra Jain, MD & CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
