AHLUCONTNSEQ2 FY23November 15, 2022

Ahluwalia Contracts (India) Limited

5,174words
114turns
14analyst exchanges
4executives
Management on call
Shobhit Uppal
DEPUTY MANAGING DIRECTOR
Vikas Ahluwalia
EXECUTIVE DIRECTOR –
Satbeer Singh
CHIEF FINANCIAL OFFICER –
Shravan Shah
DOLAT CAPITAL
Key numbers — 40 extracted
INR 622.84 crore
announced financial results for Q2 FY23. During Q2 FY23, the company has achieved a turnover of INR 622.84 crores and a PAT of INR 39.17 crores in comparison to a turnover of INR 698 crores and a PAT of INR 35.
INR 39.17 crore
or Q2 FY23. During Q2 FY23, the company has achieved a turnover of INR 622.84 crores and a PAT of INR 39.17 crores in comparison to a turnover of INR 698 crores and a PAT of INR 35.78 crores in the corresponding
INR 698 crore
ed a turnover of INR 622.84 crores and a PAT of INR 39.17 crores in comparison to a turnover of INR 698 crores and a PAT of INR 35.78 crores in the corresponding quarter of the last financial year. EPS of
INR 35.78 crore
4 crores and a PAT of INR 39.17 crores in comparison to a turnover of INR 698 crores and a PAT of INR 35.78 crores in the corresponding quarter of the last financial year. EPS of the company for Q2 FY23 is 5.8
10.99%
for Q2 FY23 is 5.85 as compared to 5.34 in Q2 of FY22. During Q2 FY23, company's EBITDA margin is 10.99% as compared to 10.04% and PAT margin 6.29% as compared to 5.13% in the corresponding period of th
10.04%
compared to 5.34 in Q2 of FY22. During Q2 FY23, company's EBITDA margin is 10.99% as compared to 10.04% and PAT margin 6.29% as compared to 5.13% in the corresponding period of the last quarter of the
6.29%
2 of FY22. During Q2 FY23, company's EBITDA margin is 10.99% as compared to 10.04% and PAT margin 6.29% as compared to 5.13% in the corresponding period of the last quarter of the last financial year,
5.13%
23, company's EBITDA margin is 10.99% as compared to 10.04% and PAT margin 6.29% as compared to 5.13% in the corresponding period of the last quarter of the last financial year, of the corresponding
INR 1,232.09 crore
ng quarter of the last financial year. During the H1 FY23, the company has achieved a turnover of INR 1,232.09 crores and a PAT. of INR 76.94 crores in comparison to a turnover of INR 1,278.11 crores and a PAT. of
INR 76.94 crore
ear. During the H1 FY23, the company has achieved a turnover of INR 1,232.09 crores and a PAT. of INR 76.94 crores in comparison to a turnover of INR 1,278.11 crores and a PAT. of INR 70.60 crore in H1 FY22. E
INR 1,278.11 crore
d a turnover of INR 1,232.09 crores and a PAT. of INR 76.94 crores in comparison to a turnover of INR 1,278.11 crores and a PAT. of INR 70.60 crore in H1 FY22. EPS of the company for H1 FY23 is INR 11.49 as compare
INR 70.60 crore
s and a PAT. of INR 76.94 crores in comparison to a turnover of INR 1,278.11 crores and a PAT. of INR 70.60 crore in H1 FY22. EPS of the company for H1 FY23 is INR 11.49 as compared to INR 10.54 in H1 FY22. Duri
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Guidance — 20 items
Shravan Shah
opening
“Without wasting much time, I will hand over the floor to Shobhit sir for opening remarks and post that they will be sharing their data regarding the order book and all the bookkeeping questions and then we will have a Q&A session.”
Mohit Kumar
qa
“So my first question on the execution, the run rate, we can expect and of course I think we've given a guidance of 15% growth, which means the second half we should do INR 1,800 crores as top line.”
Mohit Kumar
qa
“Are you maintaining the guidance or do you think there is a downward risk?”
Mohit Kumar
qa
“Management We will strive to maintain that guidance.”
Mohit Kumar
qa
“given that we have already keyed, I think our guidance was 40-50 billion, I think we are already largely there.”
Mohit Kumar
qa
“Management We have actually exceeded our target.”
Mohit Kumar
qa
“So going forward, the pipeline is robust but we are being conservative in how we are bidding.”
Mohit kumar
qa
“Can I expect to surpass the order inflow guidance for the fiscal?”
Management
qa
“Maybe we will surpass it by about, our guidance was INR 3000 crores, we may surpass it by about INR 1000 crores.”
Management
qa
“Out of this -- these 3 L1 projects, one project is the Tata Memorial Hospital, which we are still not very sure, when the funding would be approved and when the LOI will be released to us.”
Risks & concerns — 6 flagged
Are you maintaining the guidance or do you think there is a downward risk?
— Mohit Kumar
So are we looking at another quarter where at least in the NCR-related projects, you may have a significant headwind?
— Ashish Shah
And we already have inquiries on projects, both from the private sector side, both for residential and commercial, but residential is something which we are very, very cautious on.
— Management
But what I'm trying to lay stress on here is that the INR 1,800 crores figure of counter claims that actually most of it is baseless because when we go to go and file claim, the builder or the client has to file a counter claim.
— Management
Is there a chance of this risk materializing in future?
— Padmadevan
No, it's as per the new guidelines that have been given by the government of India, we have to mention this because of transparency, but the risk of this materializing is highly unlikely.
— Management
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Q&A — 14 exchanges
Q
Good evening, sir.. Another good quarter, sir, as far as margins and top margins are concerned. So my first question on the execution, the run rate, we can expect and of course I think we've given a guidance of 15% growth, which means the second half we should do INR 1,800 crores as top line. Are you maintaining the guidance or do you think there is a downward risk? Management We will strive to maintain that guidance. Mohit Kumar (Overtalking 00:08:09) Management Because our order book is healthy and traditionally the last two quarters The run rate is always higher. Yes, our turnover has been
Mohit Kumar
Secondly, on the order pipeline, how does this look like at this point of time? given that we have already keyed, I think our guidance was 40-50 billion, I think we are already largely there. Can you just comment on the order pipeline opportunity for the Q3 and Q4? Management We have actually exceeded our target. We are being conservative in our bidding now. So we are already L1 in three projects, two out of which we are expecting to be awarded shortly within this month. So going forward, the pipeline is robust but we are being conservative in how we are bidding. Can I expect to surpass the or
Q
Sir, my question is, again, on the margins, which you were just talking about. So we were probably looking forward to some sort of improvement in the run rate in the second quarter given that commodity had fallen. But still, we seem to be at close to around 10% only. So…
Management
11%, Ashish. And sorry to pre-empt you, but I have a peer comparison in front of me. I think we've beaten the margins of some of my closest peers, smaller and bigger than us. No, that I appreciate. I know, I mean, there are quite a few who would have not reached 10%, but more social... At 11%. And you can't discount and this is in spite of headwinds primarily on account of excessive rainfall, why our turnover is also a bit flat is because we've lost a lot of time due to excessive rainfall across the country. So in spite -- and that our overheads was impacted in spite of those impacts on the ma
Q
Sir, when we are guiding for the EBITDA margin, are we including other income or excluding it?
Management
Yes. We are including it. So excluding other income, what can be a margin? Yes because of the -- our other income may be improved as is written back and that kind of related to business income. So that's why it has been included in -- for the calculation was better. So sir, the second question is currently, our order book is majorly focused on government contracts. So what will be our focus going forward? Will we be focused on government contracts? Or will we try to ramp up our private order business? No, we will. I've been saying that over the last two or three interactions that I've had with
Q
So you said that we are L1 in 3 projects, one of them is the Tata Memorial Hospital, which...
Management
Q
Sir, what is our capex guidance for FY '23 and FY '24.
Management
Q
Yes, sir, I just want to know what is your capex guidance for FY '23 and FY '24.
Management
Yes. For FY '23, our guidance would be we've done about INR 33 crores. As Satbeer mentioned in his initial comments. It will be another INR 20 crores for the next 2 quarters? And as far as FY '24 is concerned, it would be in the range of about similar INR 50 crores to INR 60 crores. And sir, in case of East projects, how the execution is going on since after change in government, is payments and all that has become normal. Which part -- with geographical thing are you talking about? Bihar, sir. So look, the JDU continues to hedge the government, though RJD is a part of this now Previously, it
Q
So maybe we can get back to you. I can broadly give you the details. The major, as you know, you would understand this. I'm assuming that when we file a claim, the client for obvious reasons, files counterclaim. So the major one in this is the arbitration that is going on with Emaar MGF, for the games, village, Commonwealth Games, Village project that we had completed in 2010 before the Commonwealth Games. Now our claim against them is to the tune of about INR 400 crores and about approximately INR 500 crores, and they have filed a counter claim about INR 1,100 crores. So this is, otherwise, t
Padmadevan
Just to clarify, these are all very old clients, at least 10-year-old clients? The major one is 10 years, the arbitration has been going on for the last 7 years. It is just that when it was reaching a culmination because of COVID, the arbitrator the presiding arbitrator was very old. He was 85 years old, he retune himself. He resigned actually. So it is actually going to start again. We are in the past approach the courts to get presiding arbitrator appointed a new one. But what I'm trying to lay stress on here is that the INR 1,800 crores figure of counter claims that actually most of it is b
Q
Yes. My question was for some more clarity on the margin front, like you are at around 11% now. You have indicated a target of around 12%. So do you think that you'll be able to get to the run rate of 12% this year, by the end of this year and maintain it next year, or how you're looking at it?
Management
Yes. To both questions. Yes. That's it. No, you want for the clarification. You had a question when I'm saying yes to both. So you have a further question, kindly ask that. My question was that when you have guided for the margins, you're looking at a full year margin of 12%, or you looking at an exit run rate of this year of 12% and maintaining it next year? Yes, we are looking to maintain it next year. So logic is that a lot of our projects, we have a very healthy order book. And out of that order book, a lot of projects, which I named in response to an earlier question from Shravan, they ar
Q
Yes. Sir, I was asking that we are L1 in three projects currently. One of them is the Tata Memorial Hospital project. So which are the other two projects?
Management
There is a convention center in Guwahati, the PWD there, which is about INR 260 crores. And there is a Lachit memorial coming up in Jorhat, Lachit was a renowned freedom fighter of Assam. So that is about INR 175 crores. This is in Jorhat. So this is approximately around INR 400 crores, INR 450 crores. And then we are Tata... Tata Memorial was about INR 700 crores. We're targeting another INR 1,000 crores of order inflows for the second half? Yes. And in terms of bid pipeline, you told that it's INR 5,000 crores, and we are looking at [technical difficulty 0:29:57] We lost you again.
Q
So I was saying that our bid pipeline is INR 5,000 crores and you said that hospital is one segment that we are looking at. So which are the other segments that we are looking for?
Management
Hospitals, Railway stations, institutional buildings, campuses, commercial projects… And in terms of the competitive intensity, you said that it is still high. So what's your outlook for the next, say, six months to one year that do you see competitive intensity coming down, or do you feel that will still remain high? It will remain high. Yes. And just one last one, sir, what is the average cost of debt for us now? The debt is hardly on that is hardly INR 42 lakhs during this half year. So this is at approximately 8%, 8.5%... What Mr. Satbeer is saying, there is no debt, virtually zero debt. T
Q
Just had a follow-up question on the competitive intensity. Has it gone up over the last six months, how would you describe it? And is there a segmentation, meaning if the contract value is higher than a certain threshold then there is less competition. If you can just give a little more color on that?
Management
Yes. On the public sector contracts, the new contracts, the competitive intensity has increased. On the private sector side, there seems to be a greater discipline and the client want to be, there seems to be a conscious effort from the client side, at least large clients to go with proven contractors with proven track records. So what I'm trying to say is that the margins, we feel that the margins will start improving on the private sector side. And with RERA and other consolidation which has happened, we feel especially non-residential projects, they will be more attractive to us, of course,
Q
Just to request like other infra companies, can you also provide some kind of earnings presentation on quarterly basis, that will be very helpful for us.
Management
Sorry, Uttam, can you repeat your question again, please? Sir, I just want that the company to provide earning presentation on quarterly basis. That would be very helpful for people like us. Earning presentation on a quarterly basis. This will be uploaded just now. Satbeer is saying, we will be uploading this shortly today only. But if we did just before the con call, then it is really helpful to us. That's the request only. We'll do that. We'll keep that in mind. And from next time around, we'll publish it or upload it before the con call.
Q
Sir, most of the questions have been answered. I just missed the segmental breakup for quarter, intra, infrastructure and institutions. Can you repeat?
Management
Yes, Satbeer will just give it. Yes. Can you repeat your question, please? Segmental breakup for quarter infrastructure and institutional? Okay. This is the institutional is 38.27%, and hospital, 32.04%, 13.24%, infrastructure 7.20%, commercial 8.35% and other 0.92%.
Q
Thank you, everybody. I thank the management, again, for giving us the opportunity to host the call. So with sir, do you have any closing comments?
Management
No. Thank you, Shravan. Thank you, everybody. So I hope to be talking to you again post our next board meeting. Thank you so much. Have a good evening. Bye. Thank you, sir.
Speaking time
Management
43
Moderator
16
Shravan Shah
8
Vasudev
8
Satbeer Singh
7
Ashish Shah
5
Uttam Kumar Srimal
4
Nikhil Abyankar
3
Padmadevan
3
Sandip Sabharwal
3
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Opening remarks
Shravan Shah
Thank you. Good evening everyone. I would like to welcome you all for Q2 FY23 results conference call of Ahluwalia Contracts India Limited. We thank the management for giving us the opportunity to host the call. From the management we have Mr. Shobhit Uppal, Deputy Managing Director along with Mr. Vikas Ahluwalia, Executive Director and Mr. Satbeer Singh, CFO with us. Without wasting much time, I will hand over the floor to Shobhit sir for opening remarks and post that they will be sharing their data regarding the order book and all the bookkeeping questions and then we will have a Q&A session. Over to you sir.
Shobhit Uppal
Thank you Shravan. Good evening everybody. Ahluwalia Contracts India Limited has announced financial results for Q2 FY23. During Q2 FY23, the company has achieved a turnover of INR 622.84 crores and a PAT of INR 39.17 crores in comparison to a turnover of INR 698 crores and a PAT of INR 35.78 crores in the corresponding quarter of the last financial year. EPS of the company for Q2 FY23 is 5.85 as compared to 5.34 in Q2 of FY22. During Q2 FY23, company's EBITDA margin is 10.99% as compared to 10.04% and PAT margin 6.29% as compared to 5.13% in the corresponding period of the last quarter of the last financial year, of the corresponding quarter of the last financial year. During the H1 FY23, the company has achieved a turnover of INR 1,232.09 crores and a PAT. of INR 76.94 crores in comparison to a turnover of INR 1,278.11 crores and a PAT. of INR 70.60 crore in H1 FY22. EPS of the company for H1 FY23 is INR 11.49 as compared to INR 10.54 in H1 FY22. During H1 FY23, company's EBITDA marg
Management
What I would suggest Shravan that you know all the bookkeeping questions and all details relating to geographical divide and other such questions. Satbeer will make the announcements and then I'll take questions after that. Over to Satbeer.
Satbeer Singh
First of all segment by journal book. This is commercial 8.35%, hospital 32.04%, [inaudible 0:04:34], residential 13.24% and sector wise government 81 51%, private 18.49%. And it costs you about region wise. East 37.60%, north 33.97% and south 4.88%. West 17.74% and outside India, 5.82%. And if you ask about state wise, this is Assam 5.56%. Bihar 28.31%, Delhi 8.30%, Himachal 11.26%, Haryana 1.89%, Jammu 8.55%, Karnataka 4.88% Maharashtra 12.17% and Odisha 3.76%, UP 2.91%, West Bengal 5.52% and Uttarakhand 0.72% rest is outside India, Nepal 5.82%. This is about order book. And besides that, there is a retention money. It's around to be INR 150 crores total data including retention. This is coming out INR 691 crores Course mortgage advance is INR 190 cores and out of this intact varying into 50%. And trade reverse is 605. Codes inventory 238 cores. Real estate inventory 59.73 quotes, unwilled. Revenue 315. Quote and networking of the day. This is coming out 71 days. And beside that ther
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