GRINFRANSEQ4 FY22May 30, 2022

G R Infraprojects Limited

7,863words

124turns

12analyst exchanges

0executives

Key numbers — 40 extracted

50 billion

n the country and in the meeting of Quad nations, for the Indo-Pacific region approximately US $50 billion assistance has been proposed. With this, the future looks good. Now, coming to the Company's fina

Rs. 7,138 crore

ear 2022 Q4, the Company has been declared L-1 in 7 projects with an order value of approximately Rs. 7,138 crores. During FY22, the Company made around 19 bids in road, power transmission, and railways with a

Rs. 96,000 crore

de around 19 bids in road, power transmission, and railways with a project value of approximately Rs. 96,000 crores. In financial year 2022, the Company was awarded total 11 projects with a combined order value o

Rs. 9,970 crore

In financial year 2022, the Company was awarded total 11 projects with a combined order value of Rs. 9,970 crores and in these 11 projects, 8 projects are HAM, 2 metro projects and 1 power transmission. Till 31

Rs. 20,211 crore

power transmission. Till 31st March 2022, the Company's unexecuted order value was approximately Rs. 20,211 crores. It includes the Company's L-1 declared projects value also. Within the last 5 years, the Compan

rs,

. 20,211 crores. It includes the Company's L-1 declared projects value also. Within the last 5 years, the Company has made significant development in manpower, plants, equipment and order

Rs. 675 crore

ar ending 31st March 2022. Our Company's standalone revenue, revenue from operations increased by Rs. 675 crores with a growth of around 9% from Rs. 7,244 crores in year ended March 2021 to Rs. 7,919 crores in

s standalone revenue, revenue from operations increased by Rs. 675 crores with a growth of around 9% from Rs. 7,244 crores in year ended March 2021 to Rs. 7,919 crores in the year March 2022. On con

Rs. 7,244 crore

lone revenue, revenue from operations increased by Rs. 675 crores with a growth of around 9% from Rs. 7,244 crores in year ended March 2021 to Rs. 7,919 crores in the year March 2022. On consolidated basis, reve

Rs. 7,919 crore

ed by Rs. 675 crores with a growth of around 9% from Rs. 7,244 crores in year ended March 2021 to Rs. 7,919 crores in the year March 2022. On consolidated basis, revenue has increased by Rs. 614 crores with a gr

Rs. 614 crore

2021 to Rs. 7,919 crores in the year March 2022. On consolidated basis, revenue has increased by Rs. 614 crores with a growth of around 8% from Rs. 7,844 crores to Rs. 8,458 crores as of March 2022. Standalon

arch 2022. On consolidated basis, revenue has increased by Rs. 614 crores with a growth of around 8% from Rs. 7,844 crores to Rs. 8,458 crores as of March 2022. Standalone EBITDA margin has also bee

Guidance — 20 items

Ajendra Agarwal

opening

“The target to award the balance 14,000 km in Bharatmala phase 1 is set within the next 2 years.”

Ajendra Agarwal

opening

“During FY22, the Company made around 19 bids in road, power transmission, and railways with a project value of approximately Rs.”

Ajendra Agarwal

opening

“As of today, the Company has 1 BOT operational annuity project and 22 HAM projects and 1 power transmission BOT project.”

Ajendra Agarwal

opening

“Ltd as InvIT investor manager as per the regulatory structure whereas GR Infra Project Ltd.”

Ajendra Agarwal

opening

“We will maintain our project bidding strategy for ascertaining our progress in order book and we will continue to bid for all projects in road, railways, metro and transmission sector.”

Shravan Shah

“What's the revenue guidance and EBITDA margin expected in FY23?”

Anand Rathi

“Revenue guidance for next financial year what we believe is that most of the projects we have received the appointed date recently in the last quarter itself and even our order book is also replenished in last quarter.”

Anand Rathi

“So, assuming that we will be executing more HAM projects going forward in the current year, my margins should generally increase, but again subject to execution, which is affected generally by either inflation or by monsoon or by delay in declaration of appointed dates, but generally it should be on improving side.”

Anand Rathi

“Broadly going forward, as we will be executing more HAM projects, so this EBITDA margin should move up from that 15% to maybe 16% or 17%.”

Anand Rathi

“Generally, guidance from government side of HAM and EPC is 60% to 70% would be coming under HAM and balance 20% to 30% would be either under EPC or BOT and what we believe is that we should always be following this kind of discipline, we should also be following suite and that’s our belief that we will also be having whatever order we will be bidding or whatever order we will be getting that would be 70% would be under HAM category and the balance would be EPC.”

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Risks & concerns — 4 flagged

It may be in the range of 2% to 3% but because inflation is the major concern right now as we speak, so it again depends on how inflation pans out.

— Anand Rathi

So, a structure will be formed in it, it is very difficult to say.

— Anand Rathi

It is very difficult to say about ‘24, but yes of course as you will be diversifying, our strategy is to start, to have a slow start, so that it should not be that much margin, effect would not be that much in terms of margin.

— Ajendra Agarwal

And what I believe is going forward and in last 1-1.5 years we have seen huge amount of competition which I believe beyond with that going forward in next 1- or 2-years’ time and if there is no competition, probably whatever projects or whichever sector we will be diversifying we will not be, I mean we can always asses some kind of margin, so that depends actually, it is very difficult to project the margin for FY24, right now.

— Ajendra Agarwal

Q&A — 12 exchanges

What's the revenue guidance and EBITDA margin expected in FY23?

Anand Rathi

Revenue guidance for next financial year what we believe is that most of the projects we have received the appointed date recently in the last quarter itself and even our order book is also replenished in last quarter. So, unless and until we got some other EPC projects going forward then probably my revenue growth would be within the range of again 5% to 10% for the current year and EBITDA margin, in last financial year, our revenue mix was more inclined towards EPC projects, most of the EPC projects we have executed and HAM project mix was lesser, the proportion of HAM was less and going for

First question is in this particular quarter, the EBITDA margin was particularly very high, is there any one-off, is there any clearance which you have booked in the quarter?

Anand Rathi

Yes, there is around Rs. 82 crores, which is kind of one-off which we have received and we have recognized as an income, that is either GST claim or other claims or bonuses. When do you expect the appointed date for especially the HAM order, which you have won in Q4, can you expect this by Q4 of FY23, there should be in place? Yes, what we believe is that whatever HAM projects, which right now we are having in our portfolio, even where appointed date is awaited, what we believe is we will be having that appointed date in place in Q3 of this current financial year. Is it possible to lay out the

My question is already answered in the first one.

Management

So, sir just wanted to understand, if you could again mention about what is the order inflow we are looking at for this year, so considering that we are already on order book of nearly Rs. 20,000 crore, so what is the view and which sectors majorly roads and which are the sectors we would be targeting for that?

Anand Rathi

Sir our main sector as it is, is Highway. The way the government’s targets are there, 18,000 km that is pending, in that 75% to 80% will be our Highway sector, whether it will be HAM or an EPC and remaining 15% to 20%, we will target on Railway and Power transmission and others. And we are looking at increasing our percentage in the coming times. And in the coming years, now what is happening is along with the Power transmission, we are also looking at ropeway also, though it will be conducted through NHAI but the technology is connected with Power transmission because the pole designing is th

Thank you for the opportunity. Sir I wanted to know that the InvIT that we are planning, so how many assets will we transfer in the initial round? And how much equity will be monetized from this and go back to G R?

Anand Rathi

So, as of now, as Ajendra sir also mentioned that we have seven HAM projects operational right? And out of seven, one is of the State, that one is State PWD is of government, six are NHAI HAM right? So, our target is to actually flip all the assets, all the operational assets as and then those projects are completed, the target is as such as of now. As the situation evolves, we will have to take the call accordingly, maybe we may, probably we can start with five projects, four projects or even six projects altogether. We are thinking of keeping the State out of the InvIT now because that is a

In the coming years how do you foresee the orders coming in from state governments, will there be any urgency from their end to release the orders? And if you are focusing, then on which states are you focusing? And secondly, the prices of cement and steel which have peaked up, what do you think will be the impact on EBITDA margins in the coming quarter 1?

Ajendra Agarwal

See as far as the CAPEX for states is concerned, we focus less on that but ultimately the market share that is there, the contractors and all who work in the states, the comfort that they have but in water if there is some type of opportunity then we will definitely look into it. And as far as cement and steel, on cement the government has done a lot of work to ease the inflation and on cement also the government will take some action or the other because in cement and steel one major issue is of coal, in the coming times if the government takes some action on coal then the government will con

My question is related to T&D Project. The one which you had mentioned wherein it was recently awarded to us, so what will be the scope of work for GR in this, in terms of the subcontracting, would you be doing the sub-contracting for this particular project and what kind of margin buffer, you would have built in this project because when we compare it with the other T&D companies, lot of people are struggling as far as margins are concerned and as far as steel and commodity prices are concerned, so out here how much of margin buffer has the company built in, so that the equation does not get

Ajendra Agarwal

See, this project that is there is an open project in our company. And as far as sub-contracting is concerned then it will be at mix level, some portion of it will be subcontracted and some of it will be done in house. We are building our teams for this, lot of teams have already been formed and are working on team strengthening and as far as margins are concerned, then in this project the margins will be a little tight because, the project is also small and the company’s first project of its kind, so a portion of this cost goes towards learning cost also, so on those lines the margins will be

Sir my first question is on the revenue contribution from the HAM projects, so we have received the appointed date for HAM projects in Q4, so what kind of revenue contribution can you expect on these projects in FY23?

Ajendra Agarwal

See, generally the projects we started in last quarter right and the projects were supposed to be completed in 2.5 years, so on fair basis probably my revenue should be in the range of 40% from those projects in the current year. And sir on the Aligarh Kanpur project, so this project should get over in FY23, are we targeting the completion in FY23? Yes, very much. And sir if at all we are able to get appointed date for the new HAM projects in queue end of December, what kind of revenue we can expect from these projects, it would be camping FY23 and then obviously in FY24 as I said we can see 4

Sir just a clarification needed, this Power T&D project of Rs. 370 crore EPC value you said, and you also mentioned that once we get experience then we will see, if we get good margins, so is it fair to assume that till next 18 months we will not bid the power T&D projects?

Ajendra Agarwal

No, it is not like that. Because see as of now whatever teams so far, we have built and whatever activity we have done, we have got good amount of experience, right? What kind of cost? See before bidding into this particular project we were just having the estimate of our cost, that these would be the percent, now what we can see is that those cost numbers are getting crystalize. So, my point is the one thing left is only execution, so that may also affect my margins but then the idea is to that we are getting comfort, as we are progressing in this particular, we are getting comfort, so now pr

Hello sir, thank you. Just one question, I have a little confusion. Can you please help me with the equity plus loans till now; how much has been invested and how much is pending?

Ajendra Agarwal

So, Rs. 1300 crore is invested so far in HAM projects and nearly Rs. 2100 is additional equity commitment from our side on these projects. And is this including the new HAM projects, sir? Including new HAM, including that transmission, power transmission. Broadly, you said its schedule will be Rs. 700 crore each year. Generally, because this will have to get completed in three years, so maybe in any year it will be Rs. 800 crore, in any other year, it may be Rs. 600 crore, so generally that would be the range.

Si, thank you for the follow up. I might have missed out on this clarification; there is an increase in other current assets, which we have seen not for FY22 as compared to FY21. So, is there any component of unbuild revenues or higher proportion of unbuild revenues or what is it due to?

Ajendra Agarwal

Yes, so there is higher proportion of unbuild revenues, unbuild revenue is probably around, on account of unbuild revenues probably, my unbuild revenues have increased by around same debt, Rs. 320 crore in the current year. And the reason was that in last financial year, we have been given this opportunity by NHAI, that we could raise the bill by 20th or 22nd of March and we could convert our whatever work done for the month of March until 20th or 22nd of March in the debtors, right? So, you will find that last year debtor was high and in fact, we have received the payment also, so we have to

Thank you very much everyone for attending this investment call. The company will keep working in the same way with full efforts and I believe that your trust and support will be with the company. Thank you.

Management

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Speaking time

Ajendra Agarwal

Anand Rathi

Moderator

Shravan Shah

Teena Virmani

Jiten Rushi

Faisal Hawa

Mohit Kumar

Alok Deora

Ashish Shah

Opening remarks

Parikshit Kandpal

I would like to thank the Management of GR Infra for giving us this opportunity to host the FY22 Earnings Call. Without further delay, I would like to hand over the floor to Ajendra Agarwal Ji for his opening remarks. Over to you, sir. Thank you.

Ajendra Agarwal

Good afternoon. A warm welcome to all of you. Today, we are present to discuss the financial results of GR Infra for financial year completed on 31st March. To speak on behalf of GR Infra, I have with me Shri Anand Rathi and I am delighted to see all of you with me today. In the previous call, we have talked about this government's infra focus, which is clearly visible in our budget investment. Government's infra focus has become more clear with NIP. To implement government's infra vision, work can be seen being done on all fronts. To monitor infrastructure development, PM GATI Shakti platform is proving to be a very good tool. To promote infra, the share of state is also being increased. For NIP's success, BOT disinvestment earlier period of 2 years has now been reduced to 1 year. The target to award the balance 14,000 km in Bharatmala phase 1 is set within the next 2 years. In the current financial year 18,000 km road construction has also been targeted, which is per day approximatel

Anand Rathi

Thank you. Good afternoon to all. Myself Anand Rathi. Let me share the financial highlights for the year ending 31st March 2022. Our Company's standalone revenue, revenue from operations increased by Rs. 675 crores with a growth of around 9% from Rs. 7,244 crores in year ended March 2021 to Rs. 7,919 crores in the year March 2022. On consolidated basis, revenue has increased by Rs. 614 crores with a growth of around 8% from Rs. 7,844 crores to Rs. 8,458 crores as of March 2022. Standalone EBITDA margin has also been recorded at Rs. 1,413 crores with a decrease of around Rs. 25 crores from the previous year of Rs. 1,438 crores. Our EBITDA margin at consolidated level also stood at around Rs. 1,802 crores versus Rs. 1,920 crores that was recorded in the previous year that is March 2021. Profit after tax has also come down to Rs. 760 crores as of March 2022 as compared to Rs. 780 crores, which was recorded in March 2021. PAT at consolidated level also decreased and came down to Rs. 832 cr

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