PNCINFRANSEQ1 FY23August 10, 2022

PNC Infratech Limited

7,830words
261turns
19analyst exchanges
4executives
Management on call
Yogesh Kumar Jain
MANAGING DIRECTOR, PNC INFRATECH LIMITED
T. R. Rao
DIRECTOR, INFRA - PNC INFRATECH LIMITED
Bhupinder Sawhney Infratech Limited Mr. D. K. Maheshwari
VICE PRESIDENT FINANCE, PNC INFRATECH LIMITED
Shravan Shah
DOLAT CAPITAL
Key numbers — 40 extracted
20%
MoRTH and NHAI contemplating to reduce the upfront payment by half ,in HAM projects. In such case, 20% of bid project cost would only be paid during construction, compared to current norm of 40%. As
40%
case, 20% of bid project cost would only be paid during construction, compared to current norm of 40%. As there would be increased private investment in HAM projects, NHAI would be able to bid out a
10%
bid out and fund higher number projects with the same capital. NHAI is planning to award around 10% of projects on BOT-Toll mode, from its target of 6,500 kilometers in the current fiscal, with cert
Rs. 37 Crore
s in the contract conditions. Now coming to the key updates of the company The company received Rs. 37 Crore towards bonus on 20th April 2022for early completion of Purvanchal Expressway, Package 6, proving
35%
atech Limited August 10, 2022 During the quarter, the company has completed sale of its’ entire 35% stake in Ghaziabad Aligarh Expressway Private Limited to Cube Highways and realized the capital.
Rs. 24,590 crore
AM assets. Out of 24 projects, company has 18 HAM projects with an aggregate Bid Projects Cost of Rs. 24,590 crores. In HAM portfolio of 18 projects, company achieved PCOD/ COD for 5 projects;6 projects are unde
Rs. 2390 crore
awarded. In terms of equity investment, total requirement for all 18 HAM projects is approximately Rs. 2390 crores, out of which we have already invested Rs. 1029 crores till June 2022 and the balance will be inv
Rs. 1029 crore
nt for all 18 HAM projects is approximately Rs. 2390 crores, out of which we have already invested Rs. 1029 crores till June 2022 and the balance will be invested over the next 2-3 years. The internal accruals
Rs. 20,000 crore
any received robust order inflow in Q4FY22. Our unexecuted order book as on 30thJune 2022was over Rs. 20,000 crores after including 7New HAM Projects of Rs 7,439 Crores from NHAI where the company received Letters
Rs 7,439 Crore
uted order book as on 30thJune 2022was over Rs. 20,000 crores after including 7New HAM Projects of Rs 7,439 Crores from NHAI where the company received Letters of Award. Out of the total order-book of over Rs.
61%
he total order-book of over Rs. 20,000 crores, Roads EPC contracts including HAM contribute around 61%and Water &Irrigation projects contribute around 39%. Now I would present the results for the quar
39%
EPC contracts including HAM contribute around 61%and Water &Irrigation projects contribute around 39%. Now I would present the results for the quarter ended June 30, 2022. Standalone Quarterly Resu
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Guidance — 20 items
Shravan Shah
opening
“As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes.”
Yogesh Kumar Jain
opening
“First, I will share my thoughts on a few sectoral highlights which will be followed by financial and operational highlights of the Company.”
Yogesh Kumar Jain
opening
“In such case, 20% of bid project cost would only be paid during construction, compared to current norm of 40%.”
Yogesh Kumar Jain
opening
“NHAI is planning to award around 10% of projects on BOT-Toll mode, from its target of 6,500 kilometers in the current fiscal, with certain modifications in the contract conditions.”
Yogesh Kumar Jain
opening
“Concession agreement for the remaining project, four laning of Sonauli - Gorakhpur will be signed shortly.”
Yogesh Kumar Jain
opening
“We will keep you updated on the same, going forward.”
Yogesh Kumar Jain
opening
“1029 crores till June 2022 and the balance will be invested over the next 2-3 years.”
Shravan Shah
qa
“Sir, if you speak the disclaimer that will be better from your side.”
T. R. Rao
qa
“like you onboard for this, would your aggression in bidding going forward, would it be the same given how the equity outflow would be higher from our side?”
T. R. Rao
qa
“So we should able to fund those kind of equity requirements, even if NHAI goes for the 20% kind of amount, because earlier also we bid for a conventional annuity project wherein we used to put 100% of our entire funding from our side.”
Risks & concerns — 4 flagged
As mentioned in the previous earnings calls, company continues to look for a calibrated diversification to maintain the growth momentum, without assuming the concentration risk.
— Yogesh Kumar Jain
Since we have 5-months’ time post signing of the agreement, both sides what we expect the sufficient length of land will be available at the time of declaration of appointed date and we don’t foresee a major concern in that.
— T. R. Rao
So good margins have improved in this quarter, but last Q4 there was margin compression given that the import inflation is easing can we expect to go back to 14% margin for the fiscal?
— Mohit Kumar
We are bidding in the same area where all we are working in UP and it is not a difficult work that we are having an issue.
— Yogesh Kumar Jain
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Q&A — 19 exchanges
Q
Before starting the question and answer just would like to declare the disclaimer clause and also safe harbor what are the discussions that will happen, including the forward-looking statements what we are going to make.
Management
Q
Yes.
Management
Q
Yes.
Management
Q
Sir, if you speak the disclaimer that will be better from your side.
Yogesh Kumar Jain
If you have it readily available, you can read out the standard disclosure. Okay, I do not have it readily available.
Q
Yes.
Management
Q
Yes, good morning, sir. Regarding this MORTH and NHAI’s contemplation to reduce their contribution in HAM projects from 40% to 20%, how is the contracting and the developers PNC Infratech Limited August 10, 2022
T. R. Rao
like you onboard for this, would your aggression in bidding going forward, would it be the same given how the equity outflow would be higher from our side? First of all, see whatever bids we secured, they are not aggressive per se, so they are all well calibrated rates what we had done and the second thing is 20% more funding to be done. So this will effectively result in only another 5% kind of equity because we have to get the debt for that remaining 20%, what we have to fund. So we should able to fund those kind of equity requirements, even if NHAI goes for the 20% kind of amount, because e
Q
Hi sir, congratulations on a good quarter. My first question is on the JJM project, so if you can tell us what was the execution of the JJM?
T. R. Rao
So far, under JJM, we booked a revenue of around INR 250 crore that includes INR 108 crore revenue what we booked during the last financial year and we also done work on another INR 150 crore, that revenue would be booking during the month of August. So I can say around INR 400 crore value of work done till now under the JJM sector. Most of the other companies are doing good execution in JJM but somehow we have not been able to catch up and these orders are like very old in the order-book now. So if you can just spell out for this year how much of revenue can be booked from the JJM orders and
Q
Congratulations on a good set of numbers. Sir, actually I have recently started following the company, so my questions might be not very, very particular, one question which I have is see when we get a HAM order, how much portion do we consider it as an EPC and recognize it in revenue?
Yogesh Kumar Jain
It is you can say 90% of BPC. Okay. 90% amount of BPC. Up to 80% of the BPC. Yes. I think what I'm seeing is EPC. Yes, EPC is a construction cost. No, so if I'm getting INR 100 crore worth of a HAM order, EPC recognition is to what amount? INR 90 crore. See INR 100 crore of typical HAM projects will roughly translate into INR 90 crore of EPC order. Okay. Approximately. And that we take into revenue recognition as and when it is progressing or once it is completed after that we take into revenue recognition? On a progressive basis. On a progressive basis as and when physical work is done. Okay,
Q
Yes, good afternoon, sir. Thanks for taking my question and congrats on great execution again. Sir, just wanted to understand, sir, I am sorry if somebody's asked this question already before, sir, given that in this quarter, we have already done almost INR 1700 crore of revenue excluding the bonus of course, what is the full year revenue that we are looking at? So in terms of guidance, what is the revenue that we are looking for revenue and for margin for the full year?
T. R. Rao
Revenue will be around 15%, the guidance growth we are looking at this year, see last year revenue we have INR 6,306 crore so it's a 15% that will be around INR 7,200 crore this year PNC Infratech Limited August 10, 2022 for full year and EBITDA margin would be as our managing director told it would be around 13.5%. 13.5%? Yes, around. So sir to do 13.5% given that in this quarter we did around 12.8% if I exclude the early completion bonus, so do you expect margins to pick up in the next coming quarters, either because of commodity prices coming down or what could be the reasons for that? This
Q
Yes, my question is regard to the impairment in the Aligarh-Ghaziabad project that we took. So I wanted to understand that why did we have to book an impairment during the sale of this project? PNC Infratech Limited August 10, 2022
D. K. Maheshwari
That impairment we have already booked in the FY22, sir. Certain challenges were there, because account was in the SMA2, we have to construct a six laning, our partners were not in a position to infuse further money in the project, that’s why we have taken this decision. Okay, so that is why we took an impairment and then sold off the project? Right. Okay, and what is the total impairment which we took for this project? That is INR 129 crore, right in all? Total it is around INR 167 crore. Okay, so total is INR 167 crore you told? Yes. And last thing, what was the bonus that we received for ea
Q
Yes, thank you for the opportunity, sir. Sir, currently, what is the order intake that we are anticipating for FY23?
T. R. Rao
Between INR 8000 crore. Sorry, sir, I couldn’t hear it properly, could you repeat? We expect new order to the tune of around INR 8000-10000 crore. Okay, what would be the bid pipeline currently? It is around INR 50000 crore in pipeline by NHAI, of around 50 projects, so we are working on the same projects and the bid due dates are staggered up to 30th September 2022. Okay, and we expect our debt levels to be in the same range, right? We don't expect it to increase. Leverage should expect to be in the same line. PNC Infratech Limited August 10, 2022 1.19 at consolidated level Okay and this last
Q
One clarification, so how much is the PAT of toll revenue on our stand-alone business and what is the EBITDA?
D. K. Maheshwari
Revenue of all SPV is around INR 222 crore? Sir, my question is from Eastern Peripheral Expressway that amount is getting reflected in the standalone, correct? Yes, 1 minute, the EPE? That is INR 104 crore. And what is the EBITDA margin in that? Around 2%. Understood, sir. And secondly there is a lot of delay Sonauli-Gorakhpur the concession agreement signing, when is the concession agreement to get signed for this particular work project? See, except the Sonauli-Gorakhpur we signed concession agreement for all the remaining fixed HAM projects. So, Sonauli-Gorakhpur also we are expecting it wi
Q
Yes, hi sir. Thanks for taking my question again. Sir, I just missed out on the number. What is the total equity that we have invested in? What is the equity that is left to be invested in the HAM projects?
D. K. Maheshwari
Can you repeat please? PNC Infratech Limited August 10, 2022 Sir, total equity invested and totally equity left to be invested. Total equity to be infused INR 1361 crore. Okay, and out of that, we have invested INR 114 crore in this quarter and INR 330 crore in the next 9 months? Right. Got it, sir. Also sir, lastly, just wanted to check basically if I look at the debt number for this quarter, which is around INR 300 crore, do you believe that we could end the financial year with the same number, almost around the same number despite equity requirement for HAM projects and other things also? I
Q
Hello, sir, my question is related to the related party transactions that you have done. If you can just explain that out of the investments through related parties there have been certain others in terms of loans given to parties we are not related to, if you can highlight some of that. So what is the reason and when do you expect that money to be received back?
D. K. Maheshwari
In FY22, INR 30 crore was given by one of our subsidiary in the month of February that has been repaid to that subsidiary. And anything more that you expect going forward? No, nothing. Okay. That's it, thank you.
Q
Sir, couple of things, first in terms of the fund, non-fund base limit you mentioned INR 1000 crore, how much we have utilized fund and non-fund? D. K. Maheshwari Fund based there is no utilization and non-fund based utilization is INR 2,863 crore.
Shravan
Okay, INR 2,863 crore. Second, sir, when we say in terms of the monetization of HAM projects we are expecting a good news by end of this year so here we are looking at five HAM and one annuity project where around INR 680 crore odd we have invested. We are talking about a six HAM, one annuity, one BOT, debt around INR 4700 and equity INR 940 crore. Okay sir, out of the total debtors, how much is the HAM debtors? HAM debtor is 68%, that is INR 793 crore and EPC is INR 369 crore. Okay, so HAM data remain the same, which was there at the end of March? More or less same. PNC Infratech Limited Augu
Q
Yes, please take.
Management
Q
Yes, thank you for taking my question. Sir, on the recent party transition, you said out of INR 60 crore we have received INR 30 crore, so INR 30 crore is still outstanding, right, sir?
Yogesh Kumar Jain
Yes, you are right. PNC Infratech Limited August 10, 2022 So when, when are we expected to receive that money back? By the end of this financial year we can revert back. Okay and sir you said about the monetization of assets. So you said six HAM projects, one Annity and one BOT, so total 8 projects we're looking to monetize, is my understanding, correct? Right. So which has a equity of INR 940 crore, what is the debt investment? Debt amount, that outstanding, sir? INR 4700 crore. And sir on the Mumbai-Nagpur, we have completed the project because we're expecting some bonus. We have already com
Q
Thank you for the opportunity again, sir, what is the competitive intensity that you are seeing currently? Compared to last year, what we see the intensity would be moderate this year because whatever the concessions given like bid security waiver, and also the dilution of the prequalification criteria with respect to turnover and network criteria, so those have been restored. So the bids have to be, now bidder have to provide the bid security and also the networth criteria is also increased. So going forward, we see the intensity would be lesser than what it was last financial year. Okay, and
Vasudev
Okay, that's it from my side, thank you.
Q
Thank you management for giving us the opportunity to host the call and thank you all the participants. Sir, do you have any closing comments?
Yogesh Kumar Jain
Yes. Thank you everyone for your participation in our earning call, we have uploaded the presentation of our company’s website. In case of further queries, you may get in touch with the Strategic Growth Advisors, our investor relations advisors, feel free to get in touch with us. Thank you very much.
Speaking time
Yogesh Kumar Jain
44
T. R. Rao
42
D. K. Maheshwari
36
Jiten Rushi
28
Moderator
20
Shravan Shah
17
Parikshit Kandpal
12
Vibhor Singhal
12
Mohit Kumar
9
Jayesh Gandhi
8
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Opening remarks
Shravan Shah
Ladies and gentlemen, good day and welcome to the PNC Infratech Limited Q1 FY23 Earnings Conference Call hosted by Dolat Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the Conference Call, please signal an operator by pressing “*,” then “0” on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Shravan Shah from Dolat Capital. Thank you and over to you, sir. Thank you, good afternoon, everyone. I would like to welcome you all for Q1 FY23 results Conference Call of PNC Infratech Limited. We thank the management for giving us the opportunity to host the call. We have senior management team of PNC Infratech with us. I congratulate the entire team of PNC Infratech for robust performance in Q1 FY23, without wasting much time. I would now hand over the floor to Yogesh sir for o
Yogesh Kumar Jain
Good afternoon, everyone and a very warm welcome to all of you present on the call, to discuss our financial results for Q1FY23. Today along with me, I have Mr. T.R. Rao, Director (Infra), Dr. Bupinder Sawhney, Chief Financial Officer and Mr. D. K. Maheshwari, Vice President (Finance) and Strategic Growth Advisors - our Investor Relations Advisors. First, I will share my thoughts on a few sectoral highlights which will be followed by financial and operational highlights of the Company. The pace of highway construction in Q1 of FY23 in the country slowed down and stood at 22 km a day compared to 25 km a day on Year-on-Year basis due to higher input costs and early onset of monsoon in some parts of the country. Ongoing active monsoon across the country, continuous rains, and flood like situations in some parts, expected to affect pace of construction in the first half of Q2 of FY23. MoRTH and NHAI contemplating to reduce the upfront payment by half ,in HAM projects. In such case, 20% of
Standalone Quarterly Result
Revenue of 1st quarter of FY23 is Rs. 1,758 crore which is higher by 41% as compared to Rs. 1,251 crore in 1st quarter of FY22. The EBITDA for the 1st quarter is RS. 258 crore which is higher by 47% as compared to Rs. 175 crore in Q1 of FY22. The EBITDA margin for the 1st quarter of FY23 is 14.7%. The PAT for the 1ST quarter of FY23 is Rs. 167 crore as compared to Rs. 93 crore in the 1st quarter of FY22, a growth of 79% on YoY basis. Consolidated Financials for the quarter ended 30thJune 2022. Consolidated revenue of 1ST quarter of FY23 is Rs. 2,053 crore as compared to Rs. 1,463 crore in Q1 of FY22, growth of 40%. PNC Infratech Limited August 10, 2022 The consolidated EBITDA for the 1st quarter of FY23 is Rs. 518 crore which higher by 43% as compared to Rs. 363 crore for the 1st quarter of the corresponding quarter last year. The EBITDA margin for Q1 FY23 is 25.2%. The consolidated PAT for Q1 FY23 is RS. 241 crore as compared to Rs. 118 crore in Q1 FY22, a growth of 104%. ON THE STAND
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