CEMPRONSEQ4 FY2022May 27, 2022

Cemindia Projects Limited

6,677words
132turns
12analyst exchanges
3executives
Management on call
Rahul Modi
ICICI SECURITIES LIMITED
Jayanta Basu
MANAGING DIRECTOR - ITD CEMENTATION INDIA LIMITED
Prasad Patwardhan
CHIEF FINANCIAL OFFICER – ITD CEMENTATION INDIA LIMITED
Key numbers — 40 extracted
40%
hy operating performance in this quarter and in the year as well. Our topline has grown by nearly 40% to Rs.3810 Crores for the whole year and for the quarter as well we have crossed the Rs.1000 Cr
Rs.3810 Crore
ing performance in this quarter and in the year as well. Our topline has grown by nearly 40% to Rs.3810 Crores for the whole year and for the quarter as well we have crossed the Rs.1000 Crores mark and repor
Rs.1000 Crore
y nearly 40% to Rs.3810 Crores for the whole year and for the quarter as well we have crossed the Rs.1000 Crores mark and reported turnover of Rs.1175 Crores. In terms of the order backlog as well we have an a
Rs.1175 Crore
year and for the quarter as well we have crossed the Rs.1000 Crores mark and reported turnover of Rs.1175 Crores. In terms of the order backlog as well we have an all-time high order backlog as of March 2022 o
Rs.15500 Crore
rms of the order backlog as well we have an all-time high order backlog as of March 2022 of about Rs.15500 Crores and one more feat that we have for this financial year is the new order booking, we have receive
Rs.7700 Crore
at that we have for this financial year is the new order booking, we have received new orders for Rs.7700 Crores during the year. In terms of the working capital management as well the operating cycle has redu
Rs.1,175 Crore
asad has mentioned that our last quarter performance was good. I think we have achieved a revenue Rs.1,175 Crores which is a record in our company history in any quarters and revenue of Rs.3,800 Crores plus i
Rs.3,800 Crore
a revenue Rs.1,175 Crores which is a record in our company history in any quarters and revenue of Rs.3,800 Crores plus in consolidated. We are going through an exciting time and work in hand position also is
90%
ai Metro as we all know that hopefully by the end of this year this job will be completed, around 90% progress has been achieved so far. Kolkata Metro maybe another few month’s 97% progress has been
97%
completed, around 90% progress has been achieved so far. Kolkata Metro maybe another few month’s 97% progress has been achieved. Bengaluru Metro underground we have started a year back and the tunne
22%
have started a year back and the tunnel is going on in full swing. So far we have achieved around 22% progress. As you know Udangudi was our signature project, work is going on very good we have reac
60%
going on very good we have reached the end point which is eight kilometer from the shore, around 60% progress has been achieved. Both the seabird jobs under Indian Navy are going well except one job
Advertisement
Guidance — 20 items
Jayanta Basu
opening
“Like Mumbai Metro as we all know that hopefully by the end of this year this job will be completed, around 90% progress has been achieved so far.”
Jayanta Basu
opening
“As you know Udangudi was our signature project, work is going on very good we have reached the end point which is eight kilometer from the shore, around 60% progress has been achieved.”
Jayanta Basu
opening
“So, with this I will request to your questions and we will be there to answer your questions whatever you have.”
Mohit
qa
“So, what can we expect in FY2023, can expect this EBITDA margin to move into double digits?”
Jayanta Basu
qa
“So, we hope that this year margin will be better than last year.”
Mohit
qa
“Can I expect double digit margins in the medium-term, maybe not in FY2023, FY2024?”
Jayanta Basu
qa
“FY2024 yes, FY2023 it will be close to double digit, if it is double digit we will be very happy we will try to do that.”
Jayanta Basu
qa
“Coming to Colombo, as you know the local situation in Sri Lanka is not so conducive, so purposefully both Adani and ourselves are going slow to see how it becomes after few months and accordingly we will proceed, but otherwise we are pretty sure that we will be preferred contractors for these jobs.”
Jayanta Basu
qa
“Recently we are discussing with some of the prospective to client, our old client for a big infrastructure job, I will not be able to disclose now if it comes to us that will be quite sizeable job.”
Jayanta Basu
qa
“All these things there are two tenders at sea bird, so all this is Rs.15,000 Crores jobs are knocking and I hope that some of them will be definitely matured we will secure one or two orders.”
Risks & concerns — 5 flagged
Given the commodity price inflation that we have do you foresee this kind of a pressure continuing?
— Vibhor Singhal
Well three to four years is difficult to envision at this stage but as Mr.
— Prasad Patwardhan
Opportunities are very large at the same time the risk is also very large, I mean doing tunnel in Himalayan Range you can see in paper everyday there are something happening.
— Jayanta Basu
It will be difficult to quantify because each contract has its own defined escalation clause and we need to claim it from the client as per the clause and the cost that we incur, the quantum of steel or cement which goes into every project will also be different.
— Prasad Patwardhan
So, it will be difficult for us to quantify but we do claim it on a regular basis from the client based on the contractual conditions.
— Prasad Patwardhan
Advertisement
Q&A — 12 exchanges
Q
Good morning and congratulations on good set of revenue numbers. The first question is that of course we have a large order book and we are doing quite well in terms of revenue booking. But our EBTDA margins and our PAT margins remain very low despite having a large order book which is where we have price escalation clause. So, what can we expect in FY2023, can expect this EBITDA margin to move into double digits?
Jayanta Basu
Whatever jobs we have been executing now they are mostly what we have secured one or two years or three years back and even though we have the escalation clause available in most of them but the amount of increase in steel price is beyond any expectations. When we discussed last time in concall it was around Rs.60,000, recently it has gone up to Rs.75,000 – Rs.76,000. So, that has got some impact on the bottom line versus new job what we have secured they will yield their revenue and the margin maybe after two-three quarters from now. So, we hope that this year margin will be better than last
Q
Thank you for the opportunity sir and congratulations on a good set of numbers. In terms of the Chennai Metro, how is the progress have we started work on mobilizing or the work on the project?
Jayanta Basu
Yes, we have two jobs there underground UG1 and UG2 and our mobilization in terms of manpower and temporary instalment such of office building, store, etc., those things are almost done. Now, we have to mobilize special equipments called trench cutter which has been already ordered and I think some will reach by end of this month. So, it is as per the plan the mobilization is going on. Okay, sir in the order book, how much is the fixed price contract and how much is the variable? There are very less fixed price contract most of them are variable in the sense they are escalation stable and I wo
Q
Good morning sir. Thanks for taking my question and congratulations on great execution in this quarter. Sir, my first question was majorly on the margins front again, in this quarter if we look our margins, I know this is kind of making the headwinds in terms of commodity price inflation but the margins are actually now fallen down to around 7% in this quarter. Last quarter of course it was around 8% and we were looking for some revival from those numbers. Given the commodity price inflation that we have do you foresee this kind of a pressure continuing? I know wanted to make it close to doubl
Jayanta Basu
As all of you know when you have just mentioned rightly that commodity price is influenced because the margin what you saw last year that is mostly the jobs which we have secured long time back where our basic assumptions for the steel was Rs.40,000 – Rs.45,000 though escalation payable but the price went up to Rs.70,000 to Rs.75,000. This is one and secondly what happened if I just forget last two weeks before that the steel prices are going up, so we have to keep adequate contingency for future that is also one factor. But good thing is that if you see last two weeks the steel prices coming
Q
Thanks for the opportunity and congratulations on a great turnover. Sir, my question pertains again to the EBITDA margins. If you could quantify in terms of provisioning, how much provisioning was taken for the raw material price number one and number two our contract and site expenses for this quarter look very high, particularly for this quarter. So, any particular reason for that?
Prasad Patwardhan
To answer the first part of your question, we have not taken any hit on the material cost as such, whatever we are actually paying for procuring steel, cement or other commodities that will be booked in our financials, so there is no additional provision that we have taken in our financials. The other expenses you mentioned we have considered provision loss of about Rs.30 Crores from the Bengaluru metro project. Okay, sure and in terms of guidance, in terms of margins for FY2023 or even for that matter FY2024, can we see that looking at the way raw material prices are can we foresee at least 1
Q
I just wanted to know the Rs.15,000 Crores order book what is the execution timeline for the same?
Prasad Patwardhan
Execution timing should be in the range of three to three and a half years. Okay, and the new orders what we got in this FY2022 around Rs.7700 Crores what would be the timeline for those execution orders? There are two large orders from Chennai metro which are to be executed over four years. There are some other projects where that execution timeline is shorter for Marine projects it would be about two, two and a half years so as I said the average execution timeline for our order book would be between three to three and a half years. Is it safe to assume that over next three to four years we
Q
Sir, this elevated metro project again we have a provision of Rs.30 Crores, so it is now done, the cost of completion accounting has been done so why this is again coming?
Prasad Patwardhan
It is a combination of two-three things Parikshit, that the extension of timeline because of COVID and the commodity prices as well both the things have impacted the margins on that project. But the good thing is we have claims and we are going to pursue these claims and the money will get recovered, but in the Indian context the timeline for recoveries will be quite long. So, in terms of the accounting policies that we are required to follow we are accounted for this loss. But our feeling is it will be more of a timing mismatch and we hope to recover this money from the legitimate claims that
Q
Good morning sir and thanks for the opportunity once again. Sir, while you alluded to the order inflow from the various other segments is there any order inflow or order opportunity from the Railways this fiscal year which you are pursuing which you believe that could be closed in this fiscal?
Jayanta Basu
Metro yes, as you know that there are several metro jobs tender in Delhi and in Chennai underground and definitely we will be targeting those and we are very much there in terms of our capability and our appetite. Otherwise railway most of the works are tunneling job in North East and Northern part of India where we already have three jobs so I do not see that we will be much interested for those type of jobs for the time being. But are those opportunity very large the tunneling job why we are not pursuing some of them? Opportunities are very large at the same time the risk is also very large,
Q
Thank you for taking my question and congratulations on good execution during the quarter. Sir, most of my questions are already answered, just two so one was when I look at the inflows and in this quarter the inflows have been very, very strong. But what I realized is that, we had this Rs.5000 Crores of inflows available with us when we spoked last time during Q3 Con-Call and that was in the month February, so which essentially means that second half of February and even in March we have not been able to have much incrementally. So, what would you attribute this to essentially and there were
Prasad Patwardhan
Prem, we have already secured in the April in fact we have secured orders worth about Rs.450 Crores, the values may not have been as large as the ones we secured in January. But there has been a continuous flow of orders and as Mr. Basu said the pipeline is very strong. In the next few months we are hopeful of our order book increasing further. So, while there is competition there are lot of projects that are coming up for tender and we have been winning projects as well it is not that we have not received any orders after January or February 2022. Sure and do we see this competitive intensity
Q
Hi! Sir, I have joined the call late, there may be some repeated questions. Why there is a sudden jump in other expenses?
Prasad Patwardhan
Vipul, as I mentioned earlier we have booked some loss of the Bengaluru metro project in this quarter of about Rs.30 Crores and some of the other heads of expense because of the execution has also picked up on our projects, we have seen some increase in our plant hire, the cost of spares and other project related expenses those have also gone up during this quarter. So, this Rs.30 Crore are they recoverable or it is written off permanently? Well it is written off as of now, but we do have claims on the client for various reasons and these are legitimate claims in our opinion and we pursue thes
Q
Thank you for the opportunity. Sir, most of my question have been answered just two questions. Any provisions which are left and to be done in the Bengaluru project going forward and how much capex if you could quantify that we have done so far?
Prasad Patwardhan
Whatever losses we have envisaged on the Bengaluru metro project have already been considered in the March financials. In terms of capex as I mentioned earlier for the Chennai metro project and for some of the other projects that are under execution we would be incurring capex of about Rs.300 Crores during this year. Great Sir. Thank you very much.
Q
Good morning Sir. Thank you for taking my questions. My first question would be on the future pipeline which we are looking to bid. Any large projects which you are targeting this year I may have missed out in opening remarks highlights please?
Jayanta Basu
Yes, as I mentioned that one project in Colombo which is getting delayed because of local political issues a sizeable job of about Rs.3000 Crores, another overseas job in Bangladesh will be Rs.2000 Crores and one more infrastructure job which is also pending we are pursuing with some party in India. But sir, these projects would be fixed price contract like Colombo probably would get further delay and Bangladesh could be a fixed price contract, right sir? Bangladesh is not fixed price contract, escalation clauses are there. Colombo as because it is from the private party we have to negotiate w
Q
Thank you so much everyone for joining us on this earnings call. We look forward to your continued support to the company. Thank you once again.
Management
Speaking time
Jayanta Basu
32
Prasad Patwardhan
24
Moderator
14
Parikshit Kandpal
11
Mohit
8
Aksh Vora
8
Prem Khurana
7
Vibhor Singhal
6
Jiten S
6
Vipul Shah
5
Advertisement
Opening remarks
Rahul Modi
Thank you, Seema. Ladies and gentlemen, good day and welcome to the Q4 FY2022 post results conference call of ITD Cementation India Limited. Today we are pleased to host the senior management of the company represented by Mr. Jayanta Basu - Managing Director and Mr. Prasad Patwardhan - Chief Financial Officer. The call will begin with a brief introduction by the company after which we will open the floor for the Q&A session. I now hand over the call to Mr. Patwardhan for his opening remarks. Thank you and over to you sir!
Prasad Patwardhan
Thank you Rahul. Good morning everyone and welcome to this Q4 FY2022 earnings call of ITD Cementation. We have declared our results yesterday and I am sure you would have had a chance to go through the numbers. We have reported a very healthy operating performance in this quarter and in the year as well. Our topline has grown by nearly 40% to Rs.3810 Crores for the whole year and for the quarter as well we have crossed the Rs.1000 Crores mark and reported turnover of Rs.1175 Crores. In terms of the order backlog as well we have an all-time high order backlog as of March 2022 of about Rs.15500 Crores and one more feat that we have for this financial year is the new order booking, we have received new orders for Rs.7700 Crores during the year. In terms of the working capital management as well the operating cycle has reduced significantly due to large collections that we have received during the year and that has helped us to de-leverage our balance sheet and our debt utilization stands
Jayanta Basu
Good morning and thank you all for joining this Concall. As Mr. Prasad has mentioned that our last quarter performance was good. I think we have achieved a revenue Rs.1,175 Crores which is a record in our company history in any quarters and revenue of Rs.3,800 Crores plus in consolidated. We are going through an exciting time and work in hand position also is quite healthy and not only that there are few good jobs in the pipeline which we convert to order very soon. So, the work in hand what you see today will increase drastically by another one or two months’ time. With that I will touch up on few projects, important projects which we discuss in every meeting. Like Mumbai Metro as we all know that hopefully by the end of this year this job will be completed, around 90% progress has been achieved so far. Kolkata Metro maybe another few month’s 97% progress has been achieved. Bengaluru Metro underground we have started a year back and the tunnel is going on in full swing. So far we have
Advertisement
← All transcriptsCEMPRO stock page →