AHLUCONTNSEQ4 FY223 June 2022

Ahluwalia Contracts (India) Limited

5,686words
183turns
14analyst exchanges
4executives
Management on call
Shobhit Uppal
DEPUTY MANAGING DIRECTOR
Vikas Ahluwalia
WHOLE-TIME DIRECTOR
Satbeer Singh
CFO
Meet Parikh
ANAND RATHI SHARES AND STOCK BROKERS
Key numbers — 40 extracted
rs,
over to you, sir. Meet Parikh: Thank you Inba. On behalf of Anand Rathi Shares and Stock Brokers, I welcome everyone to Q4 FY22 and full-year FY22 Earnings Call for Ahluwalia Contracts (India) Ltd
Rs. 730.86 crore
nounced the Financial Results for Q4 FY22. During Q4 FY22, the company has achieved a turnover of Rs. 730.86 crore and a PAT of Rs. 42.35 crore in comparison to a turnover of Rs. 761 crore and a PAT of Rs. 37.06
Rs. 42.35 crore
for Q4 FY22. During Q4 FY22, the company has achieved a turnover of Rs. 730.86 crore and a PAT of Rs. 42.35 crore in comparison to a turnover of Rs. 761 crore and a PAT of Rs. 37.06 crore in the corresponding qu
Rs. 761 crore
hieved a turnover of Rs. 730.86 crore and a PAT of Rs. 42.35 crore in comparison to a turnover of Rs. 761 crore and a PAT of Rs. 37.06 crore in the corresponding quarter of the last financial year. EPS of the
Rs. 37.06 crore
0.86 crore and a PAT of Rs. 42.35 crore in comparison to a turnover of Rs. 761 crore and a PAT of Rs. 37.06 crore in the corresponding quarter of the last financial year. EPS of the company for Q4 FY22 is Rs. 6.
Rs. 6.32
crore in the corresponding quarter of the last financial year. EPS of the company for Q4 FY22 is Rs. 6.32 as compared to Rs. 5.53 in Q4 of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as co
Rs. 5.53
ing quarter of the last financial year. EPS of the company for Q4 FY22 is Rs. 6.32 as compared to Rs. 5.53 in Q4 of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PA
10.25%
is Rs. 6.32 as compared to Rs. 5.53 in Q4 of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PAT of 5.79% as compared to 4.87% in the corresponding period of the l
9.63%
d to Rs. 5.53 in Q4 of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PAT of 5.79% as compared to 4.87% in the corresponding period of the last financial year.
5.79%
of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PAT of 5.79% as compared to 4.87% in the corresponding period of the last financial year. During the year en
4.87%
Y22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PAT of 5.79% as compared to 4.87% in the corresponding period of the last financial year. During the year ended on 31st March 2022,
Rs. 2,692.47 crore
financial year. During the year ended on 31st March 2022, the company has achieved a turnover of Rs. 2,692.47 crore and a PAT of Rs. 155.26 crore as in comparison to a turnover of Rs. 1,982.19 crore and a PAT of R
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Guidance — 20 items
Shreyans
qa
“And sir just wanted to know the guidance for FY23 in terms of revenue and EBITDA margin?”
Shreyans
qa
“And sir, in terms of CAPEX guidance for FY23?”
Shreyans
qa
“Lastly in terms of central research project, we have been given to understand that one of the projects has been canceled, so just wanted to understand that and secondly what is the opportunity size still left in that, in that entire stretch now?”
Shobhit Uppal
qa
“Mohit, during the last call I had given a guidance of an order inflow of about 2,500 crores to 3000 crores, we stand by that.”
Shobhit Uppal
qa
“So, going forward we see the pricing as the prices, commodity prices stabilizing and also in the latter part of this financial year, I expect the competitive intensity to also become better.”
Shobhit Uppal
qa
“So, we stand by our guidance given earlier.”
Shobhit Uppal
qa
“2,500 crore we expect about 20% to come from the private sector from our existing clients.”
Shobhit Uppal
qa
“But overall, I think we will, we stand by our guidance of 12% to 13% as far as the year is concerned.”
Shravan Shah
qa
“We were there also L1 in Mumbai Customs project of Rs.”
Shobhit Uppal
qa
“So, the project, those tenders will be recalled.”
Risks & concerns — 1 flagged
In terms of the working capital days, is there any; any pressure are we facing in terms of the payments from the any specific client or are we expecting further improvement?
— Shravan Shah
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Q&A — 14 exchanges
Q
And sir just wanted to know the guidance for FY23 in terms of revenue and EBITDA margin?
Shobhit Uppal
15% top-line growth and EBITDA margin should also be in the region of 12% to 13%. During this quarter, did we have any one-offs? No. And sir, in terms of CAPEX guidance for FY23? It should be in the range of about Rs. 30 crore. Lastly in terms of central research project, we have been given to understand that one of the projects has been canceled, so just wanted to understand that and secondly what is the opportunity size still left in that, in that entire stretch now? Yes. As the tender has been canceled that knowledge is in public domain, so your information is correct. It is being retendere
Q
My question is sir, how do you see the order inflow in FY23? We are left with 2 times roughly 2 times FY22. Do we have not the order book so far? For the growth, I think we need a substantial number in FY23 to grow in FY24.
Shobhit Uppal
Mohit, during the last call I had given a guidance of an order inflow of about 2,500 crores to 3000 crores, we stand by that. I had also mentioned that we were deliberately being conservative on account of a couple of factors. One; increased competitive intensity coupled with the inflationary market. So, going forward we see the pricing as the prices, commodity prices stabilizing and also in the latter part of this financial year, I expect the competitive intensity to also become better. So, we stand by our guidance given earlier. Any color on this order opportunity basket available in FY23? P
Q
Sir, just wanted to know particularly on the EBITDA margin, anything has happened because this quarter we have seen again on Q-o-Q basis, the EBITDA margin increase is coming off again, so what was, any specific reasons and are we now confident that 12% to 13% for FY23 is achievable or we can see a first and second quarter maybe a lower margin because of the increased commodity prices?
Shobhit Uppal
As I said in this quarter, our EBITDA margin is 10.25%. That is in spite of there is a slight improvement from the corresponding quarter of the last financial year. In spite of as you yourself mentioned the inflation has hit us. Yes, the first two quarters would be along the same lines. But overall, I think we will, we stand by our guidance of 12% to 13% as far as the year is concerned. Secondly sir, last time we said we can do a 20% kind of a revenue growth in FY23. Now we are seeing the 15%. Are we seeing any slowdown in…? No. Shravan, last time also I said 15% to 20% now also I am saying 15
Q
My first question is about the fixed price order book which is 15%. So, what is the kind of margin impact do you think this, these orders when have and when are these orders going to be executed?
Shobhit Uppal
These orders will be completed in this calendar year and the margin impact on these particular projects will be to the tune of about; we will take a hit of profitability will be halved. So, the hit will be to the tune of about 4% to 5%. Okay. Basically, if we were to make 12%-13%, maybe we will make 5%-6% on them, right? Yes. And sir, why was the Central Vista tenders canceled and it is coming up again but what really happened? You must have read the newspaper. No, what they did the value, if you have seen the value of the tender package has gone up by about Rs. 200 crore. So, it seems that th
Q
So, can you tell us what is the total order backlog?
Shobhit Uppal
Rs. 5870 crores. And can you repeat that L1 number? Rs. 1,250 crores. Just on this margin, we have been saying still last quarter that our margins are now normalizing and again we have a negative surprise on margins in this quarter and you are saying that another two quarters of margins were remained muted, we were very well aware that the commodity prices are at elevated level in the third quarter call. So, why is it like again getting extended by two more months? So, are we not getting our escalations which is there or what are the reasons, why we are still lagging on getting back to the nor
Q
Sir just wanted to check. Are there any slow-moving orders in the order book?
Shobhit Uppal
No, as I mentioned earlier, most of the projects now all the projects are moving fine. Secondly, on the cost escalations, so are we let's say based on the indices which exist today, are we getting a fair amount of pass through of increased cost or you think the indices are lagging significantly at this point in time. Sir, the indices are lagging at this point in time. So, what we are thinking about 60% of the actual the cost which is incurred broadly speaking. When we guide for a 12% to 13% kind of margin, do we assume that the indices will catch up and hence we will be able to maintain that s
Q
Sir, I would like to know about the order backlog position for selected period. Can you give us the details of J&K Hospital project, what is current outstanding order backlog?
Shobhit Uppal
In the AIMS Jammu the backlog is about Rs. 750 crores as on date. The net unexecuted value is about Rs. 750 crores. So, what was this as on March? It was Rs. 877 crores. Sir is it possible to give us any of a top 5 or top 10 order backlog break-up because we have been missing this data for quite some time now. So, is it possible to give us now that quickly, if it is possible? Yes. I told you about this thing Jammu then… Animal Husbandry. So, you note down then Sion Hospital, this is as on March, right? Sion Hospital is Rs. 506 crore, the Medical College in Chapra in Bihar is Rs. 201 crore and
Q
First question is about the competitive intensity. Now you have mentioned that it has been high over the last year and this is why we have been conservative in terms of design and you expect it will probably improve by the second half of this year. So, is this the reduction in competitive intensity largely a function of the fact that people have had setbacks due to commodity price volatility? Or is it also because the bid pipeline, etc., might be increasing or do you expect more orders coming in future and that are why you think bidding will be more rational?
Shobhit Uppal
So, they are intertwined these two reasons that you said Parvez. Say, a lot of companies I don't want to name them but I can, there are at least 6-8 companies who are actually floundering because they picked up orders at very-very competitive pricing and the commodity prices hit them that they, the commodity prices compounded their problems. So, going forward a few of these companies may not survive. A few of these companies will; the other ones will be forced to bid in a more disciplined fashion. What we are also seeing with the larger player, they are not bidding indiscriminately. So, that i
Q
Sir, one small question I missed it, what was the order inflow during FY22?
Satbeer Singh
Rs. 1,267 crores.
Q
Just wanted one clarification about the margin guidance sources, did it inclusive of the other income?
Shobhit Uppal
At the moment, no. This is not inclusive of the other income. So, sir visible if you see causes this 12%-13% is excluding other income that you are saying, the guidance of the EBITDA margins? So, Satbeer would like to clarify. 85% of the margins have been declared that it improves the other income end of OPEX. One note has been taken off the turn over as a percentage. If we see the other income during this particular 4th quarter, then it has almost double from our original run rate of Rs. 5-6 crores. So, any kind of written back or something during this quarter? During this quarter, basically
Q
Just one thing when you look at our bank balances, which is basically the deposits for the banks. Those are doubled from last year. The Rs. 90 odd crores has become Rs. 187 crores. Is all of this margin money or these are some of the regular deposits as well?
Satbeer Singh
No. That is just the free deposit; free deposit is also including in that bank balances. Do you have the details, how much of this could be fee deposit? Out of this margin money around would be Rs. 95 crores and rest of it will be…. So, margin money does not seem to then have increased much or they see the number is basically on account of increase in the regular deposits? No, because it was basically the outstanding of the similar levels. So, that is why margins… You are right.
Q
Sir, after this bidding pipeline of Rs. 70 billion or Rs. 7,000 crores how is it the stay at actually, I want to say how the auditing pipeline for the stay is looking at this point of time. And are we looking to add something on the state side or is privately from the center?
Shobhit Uppal
One is seeing the pipeline as far as the states concerned increasing. It would be out of the total 7 billion as I said that 20% will be from the private sector and from the balance, it would be 70%-30%, 70% - center, 30% - state. My second question is, what is a long-term aspiration in the sense to let's say FY25, what kind of top-line you are looking to achieve? And that is the question. Look, these are not times to think so far ahead. Some about guidance sir? I have given a guidance of a growth of 15% to 20% of the next two years and then let's see. Just lastly, on this of margin has the pri
Q
On the mobilization advance, how much of it is interest bearing?
Satbeer Singh
This is a Rs. 203 crore and out of this, 30% is interest free. 30% is… About Rs. 60 crores is interest free. Rest is about Rs. 140 crores is interest bearing. On the pledge now with almost zero debt we have, what is the reason for the pledge we have and by when do you expect to reduce it further is it reset down? Yes, just you will find it within this quarter that we have already squared up the limits with Punjab that has a major holding those lags this year with event. This is around 50 lakhs that would lead to this quarter and rest there would after be Rs. 47.95 lakhs and we are planning to
Q
Thank you everybody for patiently listening to us and if there are any other questions you can reach out to Satbeer directly or Sudhanshu from our IR team and we will reply as soon as possible and hope to talk to you again at the end of the next quarter. Thank you.
Management
Speaking time
Shobhit Uppal
67
Satbeer Singh
20
Jiten Rushi
17
Moderator
16
Shravan Shah
13
Rajat Sethia
10
Mohit Kumar
7
Parikshit Khandpal
7
Shreyans
6
Ashish Shah
6
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Opening remarks
Meet Parikh
Thank you Inba. On behalf of Anand Rathi Shares and Stock Brokers, I welcome everyone to Q4 FY22 and full-year FY22 Earnings Call for Ahluwalia Contracts (India) Ltd.. From the management side, we have Mr. Shobhit Uppal - Deputy Managing Director, Mr. Vikas Ahluwalia - Whole-time Director, Satbeer Singh – CFO of the company. We will start with the opening remarks from the management regarding the industry, the results and post which we will open up for an interactive Q&A. Over to you, sir.
Shobhit Uppal
Thank you. Good afternoon. Welcome everybody. Ahluwalia Contracts (India) Ltd. has announced the Financial Results for Q4 FY22. During Q4 FY22, the company has achieved a turnover of Rs. 730.86 crore and a PAT of Rs. 42.35 crore in comparison to a turnover of Rs. 761 crore and a PAT of Rs. 37.06 crore in the corresponding quarter of the last financial year. EPS of the company for Q4 FY22 is Rs. 6.32 as compared to Rs. 5.53 in Q4 of FY21. During Q4 FY22, the company’s EBITDA margin is 10.25% as compared to 9.63% and a PAT of 5.79% as compared to 4.87% in the corresponding period of the last financial year. During the year ended on 31st March 2022, the company has achieved a turnover of Rs. 2,692.47 crore and a PAT of Rs. 155.26 crore as in comparison to a turnover of Rs. 1,982.19 crore and a PAT of Rs. 77.24 crore in the last financial year. EPS of the company for year ending 31st March 2022 is Rs. 23.18 as compared to Rs.11.53 in the last financial year. During the year ended on 31st M
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