Release Date: October 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Hindustan Construction Co Ltd (BOM:500185, Financial) reported a 6% increase in standalone turnover, reaching INR 1,203 crores compared to the previous year.
- The company achieved a significant improvement in consolidated profit, rising to INR 64 crore from INR 6.4 crore in the previous year.
- EBITDA margin improved to 18% from 14% in the previous year, indicating better operational efficiency.
- The company has a diversified order book of INR 9,800 crores, with significant contributions from transport and water sectors.
- Hindustan Construction Co Ltd (BOM:500185) has received a project taking over certificate for the DMR CBC 06 project in Delhi and completed the southbound arm of the Mumbai coastal road project.
Negative Points
- Net profit for the quarter slightly decreased to INR 50 crore from INR 52 crore in the same quarter last year.
- Consolidated revenue decreased to INR 1,400 crores from INR 1,800 crores due to lower contributions from Steiner.
- The company is facing challenges in providing forward-looking statements regarding executable work in the second half of the year.
- There is a high level of unbilled revenue, which is approximately half of the annual turnover on a standalone basis.
- The company has a substantial debt level, with total debt including accrued interest at approximately INR 3,600 crore.
Q & A Highlights
Q: Can you provide details on the quantum of work executable in the second half of the year?
A: The order book stands at INR 9,804 crore, but we refrain from specifying the exact amount executable in the second half as it would be a forward-looking statement.
Q: What is the impact of reducing the corporate guarantee from 100% to 20% on HCC's working capital?
A: Reducing the corporate guarantee is a de-risking move that will aid in raising capital and funding growth. It is linked to the QIP fundraise, which has already received approval.
Q: Could you explain the INR 35 crore interest reduction?
A: This reduction is separate from the corporate guarantee issue. It involves utilizing money deposited in court against arbitration awards to prepay debt, leading to an annual interest reduction of INR 35 crore.
Q: What is the outlook for the PSP sector and the cost per megawatt?
A: We are actively engaged in the PSP sector, expecting to bid for INR 12,000 to 15,000 crore in the next 6-8 months. The project cost per megawatt varies significantly based on project specifics.
Q: How do you see the nuclear power EPC mandate growing in the coming years?
A: The nuclear sector is controlled and sees limited project announcements annually. We expect civil opportunities worth 15,000 to 20,000 crore annually, with potential to secure 2,000 to 3,000 crore.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
