Release Date: November 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ITD Cementation India Ltd (BOM:509496, Financial) reported a significant year-on-year growth in total income by 24% for the quarter and 27% for the half-year.
- The company achieved a profit after tax growth of 34% for the quarter and 63% for the half-year, indicating strong financial performance.
- The balance sheet remains robust with low leverage, maintaining a net equity ratio of about 0.4 times.
- The company secured orders worth approximately 3,850 Crores in October, enhancing its order book.
- The management expressed confidence in achieving a 20%-25% revenue growth, supported by a strong pipeline of projects worth 30,000 Crores.
Negative Points
- Revenue for the quarter was affected by the monsoon, impacting road work projects that are weather-dependent.
- Political issues in Bangladesh hindered progress on a transmission line project, affecting revenue and margins.
- The company's order book decreased from 22,000 Crores to below 18,000 Crores, raising concerns about future growth.
- Margins were slightly down this quarter, attributed to seasonal factors and project-specific challenges.
- The company faces challenges with manpower shortages in certain segments, which could impact project execution.
Q & A Highlights
Q: With Adani becoming the new owner, how do you see the competition and business dynamics changing for ITD Cementation?
A: Prasad Patwardhan, CFO, stated that the acquisition should not significantly affect the company's operations as ITD Cementation will continue to operate as an independent listed company. The change in ownership is expected to be positive, potentially leading to more projects from Adani and other clients.
Q: What is the outlook for order inflow and growth over the next few years?
A: Prasad Patwardhan, CFO, mentioned that the company has a pipeline of around 30,000 Crores in various stages of bidding. They expect to secure some of these projects by the end of the year and maintain a growth target of 20%-25% annually.
Q: Can you provide more details on the 30,000 Crore project pipeline and expected order finalizations?
A: Prasad Patwardhan, CFO, explained that bids have been submitted for several projects, and they expect many of these to be finalized by February. Approximately 25% of these projects are from overseas markets.
Q: How is the company addressing the increase in working capital and its impact on margins?
A: Prasad Patwardhan, CFO, noted that the increase in working capital is due to the ramp-up in revenue and execution. The margins were slightly affected by monsoon impacts and political issues in Bangladesh, but they expect improvements as conditions normalize.
Q: What are the company's plans regarding new segments like data centers and renewable energy?
A: Prasad Patwardhan, CFO, stated that while the company is primarily focused on its existing segments, they are exploring opportunities in new areas such as data centers and renewable energy, which are becoming increasingly relevant.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
