Release Date: August 09, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Operating revenue for Q1 FY25 reached INR198 crore, reflecting an 11% growth compared to the same quarter last year.
- EBITDA for Q1 FY25 was INR55.3 crore, representing a 6% year-over-year increase with an EBITDA margin of 23.8%.
- The Waste-to-Energy plant's Plant Load Factor reached approximately 89%, a significant increase from 71% in the previous quarter.
- Successfully managed approximately 1.18 million tonnes of waste, reflecting a notable 6% year-on-year increase.
- Record sale of about 34,000 tonnes of RDF in Q1 FY25, marking a strong 23% year-on-year growth.
Negative Points
- Finance costs increased from INR7 crore to INR13 crore, and depreciation rose by 56%, primarily due to the commercial launch of the Waste-to-Energy plant.
- Total contract revenue amounted to INR35 crore, down from INR49 crore compared to the same period last year.
- Net debt stands at approximately INR308 crore, indicating a net debt-to-equity ratio of 0.4X.
- Deferred tax adjustments have led to a tax rate of about 25%, impacting the bottom line.
- Debtor days have increased, reflecting a stressed receivable situation due to delays in municipal payments.
Q & A Highlights
Q: What are the plans for the remaining cash after the CapEx lined up for the current year?
A: The remaining cash is currently used as margins for our existing projects. We are using excessive margins to bid for new projects, which can act as a buffer when financing institutions give us bank guarantees and earnest money deposits.
Q: Any updates on the Chennai project and traction in tenders post-election?
A: The Chennai project submission date is later this month. We have submitted a large C&T contract in the MMR region, with results expected shortly. There are also a few more C&T tenders in Thane and Chennai in the pipeline.
Q: What is the tax percentage for the current year?
A: The adjusted tax rate is about 25%. The company has shifted all its historical companies and subsidiaries to the new tax regime, except for one processing company, which will shift in 2028.
Q: Can you provide an update on the new initiatives like tire and vehicle scrappage?
A: We have decided to buy land instead of taking it on long-term lease for sustainability reasons. We are looking at MIDC Industrial Park around Mumbai and should close the deal shortly. The investment will be around INR20 crore to INR28 crore for both projects, with an incremental INR8 crore to scale up.
Q: What is the revenue guidance and margins for FY25?
A: We expect 14% to 18% growth on core revenues, excluding compost and RDF sales. We anticipate around 18% growth on the top line and EBITDA margins around 23% to 24%.
Q: What is the potential revenue and margin for the Construction and Debris project?
A: On an annualized basis, the first full year of operations will have a revenue of about INR30 crore. The margins should be slightly better than our existing margins, with potential upside from byproduct sales.
Q: Can you provide some light on the revenue guidance and margins for FY25?
A: We expect 14% to 18% growth on core revenues, excluding compost and RDF sales. We anticipate around 18% growth on the top line and EBITDA margins around 23% to 24%.
Q: What is the potential revenue and margin for the Construction and Debris project?
A: On an annualized basis, the first full year of operations will have a revenue of about INR30 crore. The margins should be slightly better than our existing margins, with potential upside from byproduct sales.
Q: Can you provide an update on the new initiatives like tire and vehicle scrappage?
A: We have decided to buy land instead of taking it on long-term lease for sustainability reasons. We are looking at MIDC Industrial Park around Mumbai and should close the deal shortly. The investment will be around INR20 crore to INR28 crore for both projects, with an incremental INR8 crore to scale up.
Q: What is the tax percentage for the current year?
A: The adjusted tax rate is about 25%. The company has shifted all its historical companies and subsidiaries to the new tax regime, except for one processing company, which will shift in 2028.
Q: Any updates on the Chennai project and traction in tenders post-election?
A: The Chennai project submission date is later this month. We have submitted a large C&T contract in the MMR region, with results expected shortly. There are also a few more C&T tenders in Thane and Chennai in the pipeline.
Q: What are the plans for the remaining cash after the CapEx lined up for the current year?
A: The remaining cash is currently used as margins for our existing projects. We are using excessive margins to bid for new projects, which can act as a buffer when financing institutions give us bank guarantees and earnest money deposits.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
