GRINFRANSEQ1 FY23August 10, 2022

G R Infraprojects Limited

7,765words
128turns
9analyst exchanges
0executives
Key numbers — 40 extracted
Rs. 2,477 crore
roved very much and with this improvement, the company has recorded a standalone of approximately Rs. 2,477 crores revenue from operations which was Rs.2,268 crores compared to last years Q1 FY22. Improvement
Rs.2,268 crore
any has recorded a standalone of approximately Rs. 2,477 crores revenue from operations which was Rs.2,268 crores compared to last years Q1 FY22. Improvement in project aggregation of our company in recent past
Rs. 130 crore
laration of projects appointed date. Last quarter, company had received early completion bonus of Rs. 130 crores which is a record for the company. This bonus was received for Purvanchal Expressway. We have se
Rs. 17,700 crore
ll 30th June 2022, condition of our order book, including one L1 project almost our order book is Rs. 17,700 crores. Besides our One L1 project of Rs. 600 crores, rest of our projects are awarded to us. In order
Rs. 600 crore
ncluding one L1 project almost our order book is Rs. 17,700 crores. Besides our One L1 project of Rs. 600 crores, rest of our projects are awarded to us. In order book almost with 90% projects for road sector
90%
e L1 project of Rs. 600 crores, rest of our projects are awarded to us. In order book almost with 90% projects for road sector is more. Few projects are of Rs. 2,000 crores. Today company has 8 compl
Rs. 2,000 crore
warded to us. In order book almost with 90% projects for road sector is more. Few projects are of Rs. 2,000 crores. Today company has 8 completed roads assets with them, besides this 7 under-construction project
Rs. 7,000 crore
ssion project, 8 HAM projects whose appointed date is still to be done. These projects are almost Rs. 7,000 crores and we hope to receive appointed date of these 7, 8 HAM projects this year upto March. In last q
Rs.12,000crore
se 7, 8 HAM projects this year upto March. In last quarter company has submitted bids of almost Rs.12,000crores in which 3 metros of Rs. 23 crores, 11 road project of Rs. 700 crores, transmission pr
Rs. 23 crore
March. In last quarter company has submitted bids of almost Rs.12,000crores in which 3 metros of Rs. 23 crores, 11 road project of Rs. 700 crores, transmission project of Rs. 1,000crores, in which
Rs. 700 crore
s submitted bids of almost Rs.12,000crores in which 3 metros of Rs. 23 crores, 11 road project of Rs. 700 crores, transmission project of Rs. 1,000crores, in which company has not got anything and so
Rs. 1,000crore
h 3 metros of Rs. 23 crores, 11 road project of Rs. 700 crores, transmission project of Rs. 1,000crores, in which company has not got anything and some projects results are yet to come. In FY23, our t
Guidance — 20 items
Vinod Kumar Agarwal
opening
“I feel very happy to say that in Q1 FY23 company’s project aggregation has improved very much and with this improvement, the company has recorded a standalone of approximately Rs.”
Vinod Kumar Agarwal
opening
“Improvement in project aggregation of our company in recent past happened due to the declaration of projects appointed date.”
Vinod Kumar Agarwal
opening
“Though it is little uncertain and it a matter of worry but going forward we hope that in GRIL effect of interest is not very high because in grill debt amount is not very high.”
Vinod Kumar Agarwal
opening
“Till 30th June 2022, condition of our order book, including one L1 project almost our order book is Rs.”
Vinod Kumar Agarwal
opening
“Today company has 8 completed roads assets with them, besides this 7 under-construction projects are there, one is under-construction transmission project, 8 HAM projects whose appointed date is still to be done.”
Vinod Kumar Agarwal
opening
“7,000 crores and we hope to receive appointed date of these 7, 8 HAM projects this year upto March.”
Vinod Kumar Agarwal
opening
“In FY23, our target is to achieve new projects worth Rs 15,000 crores.”
Vinod Kumar Agarwal
opening
“With governments reduction in relaxation, bidding will be properly done and in the coming times we can see less competition as compared to last year’s competition.”
Management
qa
“This InvIT will be a public registered InvIT and we will transfer our 6 completed HAM projects in this InvIT and whereas timeline is considered our planning is that this InvIT is completed at the year end and we will are trying that our other completed projects who are not in the position to hold.”
Management
qa
“So, initially we will start with 6 projects and afterwards as our project completes we will add it to this InvIT.”
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Risks & concerns — 15 flagged
Due to the government’s effort we all feel that pressure of inflation has reduced, there is a downtrend in many other construction materials like cement, steel, is reducing.
— Vinod Kumar Agarwal
Impact of these can be definitely seen in the 3rd and 4th quarter, execution in 2nd quarter is little less due to monsoon so, last two quarters will definitely show effect in it.
— Vinod Kumar Agarwal
Though it is little uncertain and it a matter of worry but going forward we hope that in GRIL effect of interest is not very high because in grill debt amount is not very high.
— Vinod Kumar Agarwal
And EBITDA again forward as we know sir, as I mentioned that pressure of inflation is coming down but if it is temporary or I don’t know so we have to wait for another one quarter right.
— Management
Then sir, the risk of the execution, the growth or revenue growth can be a bit at a risk because our executable order backlog is low right now and again as you said that the power project will take some time to kick in, then what kind of revenue you are expecting from the project like for Bilaspur Urga then your Aligarh-Kanpur project, Dwarka.
— Jiten Rushi
133crores of bonus, the margin still remains under pressure in terms of gross as well as EBITDA.
— Jiten Rushi
It is very difficult to directly as an any cost reason being it is a sentiment because when company receives the bonus there are generally contractor also, who so is working on that particular project may come in to us and asking for some reward of that particular projects.
— Management
So, it is very difficult but it may be some contractors may be compensated on different projects that is something.
— Management
It is a collective effort, I cannot say it would be a project basis, but yes it is a sentiment issue and after removing the bonus probably my margin would be under pressure that I believe that would be because of inflation so far which we have witnessed.
— Management
See, this government generally it is very difficult to say that how quick the government is?
— Management
Government announced one project and keep on delaying generally it takes 6 months or 3 months depending on, so for me to comment on this is very difficult but identified pipeline is around Rs.
— Management
Basically, like you mentioned that when we adjust this early completion bonus, the margins come somewhere around 14.3% for the quarter, so is that more often indication of higher execution of EPC projects in the quarter than the HAM projects and how much is the impact of the inflation that you had mentioned.
— Tina Virmani
To that extent, my margin would be under pressure, inflations pressure is there but it is very difficult for us to give the accurately what kind of effect is there in margins but I believe in my opinion it would be in the range of 2 to 3% that I believe, but it is mixed of my status of my project where our execution is going on.
— Management
Capability wise, we think that we are enough capabilities but project is good so margin should also be there, we were L2, it was not a big difference but yes, many a times bad luck happens so, we couldn’t get that project but yes, if we are getting project with good a vision margins, I would not say need a very huge margin but the kind of risk which we foresee in that particular project so as margins should also be received.
— Management
I think capability wise it is not a big challenge for us.
— Management
Q&A — 9 exchanges
Q
Good afternoon sir, and congratulation on a very good set of number. Sir, my first question is on the executable order book. It is given that some of our orders are still in awaiting the appointed date. What are the order on which the work has commenced and what are the pending order book in which the order is not coming for?
Management
So, it is my total order book as I mentioned it is around Rs. 17,600 crores it includes L1 order also that is almost Rs. 600 cores and the order where we have to receive the appointed date from manager is around Rs. 7,000 crores, so effectively I would say Rs. 10,000 crores of order are under execution. Secondly, on the InvIT given that we have registered our InvIT with SEBI, what is the timeline for monetization to happen and are you looking to put the entire portfolio or giving some to InvIT, is the understanding right? This InvIT will be a public registered InvIT and we will transfer our 6
Q
Thank you and congratulations on good set of performance this quarter. Sir, before the question just asking the numbers that you have mentioned because your voice was not clear so just to clarify again, in terms of the CAPEX you mentioned in Q1 how much CAPEX we have done?
Management
It is Rs. 145 crores as of now. And for the full year we are looking at? It would be between Rs. 300 crores to Rs. 400 crores depending on what kind of order we have win, at what time the project would be stared, right? So, generally, it would be in the range of Rs. 300crores to Rs. 400 crores. And the equity invested already in HAM is how much sir? We are around Rs. 1,545 crores. And the balance is? We have to infuse our almost 1,900- 1,880 specifically, but that is to be invested in next 2 to 3 years of time. So, this year how much we will be investing in June FY2024-2025? We have understood
Q
Good afternoon sir and congratulation on good numbers. Sir, just wanted to understand on this metro project we have been L1 since some time now. So, what is the status there now?
Management
Still remains the L1 only, may be there procedural issue, I don’t know, probably they have not got the sanction from their authorities, I don’t know, that may be case, but when we are also guessing why it is getting delayed so much? So, there is no clear timeline like 3 months 6 months when it will come through? It is almost more than 1 year, so we are also actually clueless on this. So, also sir, you mentioned about bidding for Rs. 12,000 crores water projects in first quarter and Rs. 10,000 crores bids were opened which could be nearly 8 to 10 projects, so is the competition intensity is sti
Q
Congrats on very great execution sir. Sir, my question is regarding the HAM projects which you mentioned that NHAI has come with a new idea in which grants is reduced up to 20%, so, sir just wanted to ask you in your opinion, like NHAI brought HAM projects because they don’t want to give more in EPC because by doing so governments investment requirement increases. If in HAM projects they donate 20% then as you said there are many companies who cannot bid for HAM projects, so there are few company like us whose balance sheet is very strong and who can do it and HAM projects quantity in NHAI ord
Management
No it is not like this, every project will not accept this model only few project will accept this model. In NHAI plan all type of projects are there, with 40% grant and 20% grant will also be there, BOT, EPCs also will be there. So, all four type of model they accept. So, sir you are saying both HAM projects will co-exist some will come under 20% and some under 40%? So, Government is exploring, this grant is a contribution from NHAI during construction it may be 40%, it may be 20% depending on the market view or markets acceptance. So, it is going on means thinking is still on, what will be i
Q
Congratulations on good set of numbers. Sir, my first question was on the order. Sir, you said Rs. 7,000 crore of order book is from the project which is still pending appointed date. So, these are the 8 projects which I understand which is still having appointment pending. This includes Amritsar, Bathinda, Ludhiana and Rupnagar, but sir you said all this 8 put together would be Rs. 7,000 crores EPC, is my understanding correct sir?
Management
Yes, very much correct. And when or Amritsar and Ludhiana, when do we expect the AD by September? Yes, because now monsoon has already started so, we would also not very much interested. So, we will wait for monsoon to end and may be by September end or October mid, generally we will be having that appointed date. And for the rest we can expect in Q4 rest 6 projects? I would say, we would be receiving the appointed date gradually, it is not that all the project will be getting appointed date in Q4, may be 2 or 3 projects will be depending on the land acquisition status, otherwise will be havin
Q
Namaskar sir. Sir, two questions, first is this new rate of GST, which has being implemented with effect of July. So, what kind of impact it is having in terms of processing of the GST credit etc., and is it leading to any increase in our working capital or outstandings with the government?
Management
Ashishji in my opinion again because if there is rate change or GST change, we have to claim in terms of change of law or all that, then working capital will be impacted a bit because there would be more money stuck into this, now rate has increased then it is 18% which is I think it is a handsome amount, I believe that working capital little should be there, let us see how government is taking in terms of reimbursing those extra cost which we are incurring from our GST. Fair enough sir, sir, secondly in terms of the transmission projects that we are targeting, so at this point of time, what i
Q
My question is a follow up question related to margins only which one of the participants had earlier asked. Basically, like you mentioned that when we adjust this early completion bonus, the margins come somewhere around 14.3% for the quarter, so is that more often indication of higher execution of EPC projects in the quarter than the HAM projects and how much is the impact of the inflation that you had mentioned. So, just wanted to understand what is the aspect in the breakup of revenues for the current quarter, a broader breakup?
Management
So, in broader breakup I will tell you that around 63-64% is EPC balance is HAM and if we compare with the previous quarter, our HAM execution has increased one thing. Second point is that whatever new projects so far we have started, those are in their early stage, so in early stage what I believe is not so much of profit happens. Third one is that what I believe is that in first quarter inflation was the key factor for the first quarter which we believe that as of now as we speak there are quite consistent in terms of getting cool. To that extent, my margin would be under pressure, inflation
Q
Sir, I want to understand little about diversification from you, which areas we can target? You are doing transmission line, you first tried for High-speed rail, how big opportunity it will be, what will be our capability set there? And besides this the ropeway projects which you talked about, how big is that opportunity, how many orders are targeting to take in that? If you can tell something about this diversification?
Management
See, the ropeway is in the planning of government, they are starting it and one project has been bidded. In that there bid was not correct so we didn’t participate in that but in ropeway there are many projects coming in. slowly as more projects come in area will keep on opening and we are quite serious in ropeway because ropeway is coming through NHAI. Besides ropeway we are concentrating on metro and railway also and with this our High-speed bullet train in that also we are concentrating a lot. So, Aditya, no doubt we are exploring new opportunities but we are not so fast, we are trying to u
Q
Rathiji just one question I had on this InvIT, at the date of making this InvIt, so how many assets are initially planned to take and what will be the book value of the equity of these assets which we get transferred and also the last thing, do we have a management team in place now for this InvIT? So, just touch upon these two things?
Management
Yes, so Parikshit, to answer your question on equity as of now we are having almost equity value of those 7 asset, as of now my book value of equity is around Rs. 1,000 crores and the team is also in place, the team is also building up. So, far we have independent and we have taken, in our opinion we have taken a competent staff to manage the show for that InvIT and from the same background, I would say not from the expenses in background from the financial so far we have taken and we have given them independent hand to setup their own team, to evaluate the projects not only for G R, but the p
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Speaking time
Management
61
Shravan Shah
15
Moderator
11
Jiten Rushi
11
Vibhor Singhal
6
Mohit Kumar
4
Alok Deora
4
Tina Virmani
4
Aditya Bhartiya
4
Parikshit Kandpal
3
Opening remarks
Parikshit Kandpal
Thank you Rochelle, on behalf of HDFC Securities, I would like to thank G R Infraprojects for giving us this opportunity to host the first 1Q FY23 Results call. Today, on this call we have Mr. Vinod Kumar Agarwal, Chairman and the Whole-Time-Director of the company and Mr. Anand Rathi, Group CFO. So, without any further delay, I would like to handover the call to call to VinodJi for his opening remarks. Thank you sir and Over to you.
Vinod Kumar Agarwal
Good afternoon ladies and gentlemen. I Vinod Agarwal, welcomes you all to the Q1 FY23 Earnings calls of G R Infraprojects Limited. Today with me is Mr. Anand Rathi Company’s CFO. Now, I am going to share with you all some key highlights of first quarters. I feel very happy to say that in Q1 FY23 company’s project aggregation has improved very much and with this improvement, the company has recorded a standalone of approximately Rs. 2,477 crores revenue from operations which was Rs.2,268 crores compared to last years Q1 FY22. Improvement in project aggregation of our company in recent past happened due to the declaration of projects appointed date. Last quarter, company had received early completion bonus of Rs. 130 crores which is a record for the company. This bonus was received for Purvanchal Expressway. We have seen many upward trend with this and we are fully confident that same pace for execution will continue in the future. Due to the government’s effort we all feel that pressure
Anand Rathi
Thank you sir, for giving me this opportunity for setting the financial for the quarter ending June 2022. So, to talk about revenue from operation, I am happy to say that we have recorded decent increase in the same which stood at approx. Rs 2,477 crores for the quarter ended June 2022 with 15%on Y-o-Y basis. On that basis also it is almost Rs. 2,700 crores with a growth of 19% approximately. Our standalone EBITDA margin is (Inaudible) 10:12 for the quarter. We see the approximately 20% of the revenue from the operation, EBITDA margin on consol basis also Rs. 700 crores approx. which is almost 25% of the revenue from operation. Standalone PAT margin is what we have recorded is Rs. 321 crores in the current quarter Rs. 203 crores and the quarter ended June 2021 that is year-on-year basis and PAT margin on consol basis also increased by around 83% which almost at Rs. 405 crores in the current quarter as compared to Rs. 221 crores in the previous quarter it is a June 2021 quarter. We are
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