GRINFRANSEQ2 FY23November 11, 2022

G R Infraprojects Limited

7,439words
105turns
9analyst exchanges
1executives
Management on call
Parikshit Kandpal
HDFC Securities
Key numbers — 40 extracted
5%
ar’s same quarter. If we look at the standalone basis then the company’s operational revenue with 5% increase was Rs. 1,777 crores which was Rs. 1,699 crores same Q2 quarter last year. And in this q
Rs. 1,777 crore
r. If we look at the standalone basis then the company’s operational revenue with 5% increase was Rs. 1,777 crores which was Rs. 1,699 crores same Q2 quarter last year. And in this quarter company received an ea
Rs. 1,699 crore
lone basis then the company’s operational revenue with 5% increase was Rs. 1,777 crores which was Rs. 1,699 crores same Q2 quarter last year. And in this quarter company received an early completion bonus of alm
Rs. 6 crore
me Q2 quarter last year. And in this quarter company received an early completion bonus of almost Rs. 6 crores.t The Company’s EBITDA was Rs. 260 crores, so in previous year same quarter it was Rs. 278 cro
Rs. 260 crore
er company received an early completion bonus of almost Rs. 6 crores.t The Company’s EBITDA was Rs. 260 crores, so in previous year same quarter it was Rs. 278 crores. On 30th September 2022 by including L1
Rs. 278 crore
t Rs. 6 crores.t The Company’s EBITDA was Rs. 260 crores, so in previous year same quarter it was Rs. 278 crores. On 30th September 2022 by including L1 projects our order book value is about Rs. 16,200 in whi
Rs. 16,200
was Rs. 278 crores. On 30th September 2022 by including L1 projects our order book value is about Rs. 16,200 in which L1 projects Rs. 592 crores value is also included. On 30th September 2022, the company’s
Rs. 592 crore
ember 2022 by including L1 projects our order book value is about Rs. 16,200 in which L1 projects Rs. 592 crores value is also included. On 30th September 2022, the company’s executable order book is about Rs.
Rs. 10,100 crore
ores value is also included. On 30th September 2022, the company’s executable order book is about Rs. 10,100 crores. In order book about 93% share is of road and highway development projects. In Q2 financial ye
93%
ptember 2022, the company’s executable order book is about Rs. 10,100 crores. In order book about 93% share is of road and highway development projects. In Q2 financial year 23, the company has ach
Rs. 5,500 crore
jects. Today company has 9 operational and 9 under construction projects and 6 HAM projects worth Rs. 5,500 crores appointed dates are yet to come and the appointed dates of these projects are expected to come i
Rs. 16,450 crore
are expected to come in this financial year. In this quarter company has submitted a bid of about Rs. 16,450 crores in which one Rs. 1,000 crores metro project and 15 road projects worth of Rs. 15,000 crores are
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Guidance — 20 items
Management
opening
“1,000 crores metro project and 15 road projects worth of Rs.”
Management
opening
“450 crores one ropeway project is also included.”
Management
opening
“We are very excited with the Government’s infra focus there we are fully confident that we will be successful to achieve our target of Rs.”
Management
opening
“We can complete our target, on this basis we are fully hopeful that next year means financial year 24 onwards we can come on our growth track of 15% - 20% yearly.”
Management
opening
“I want to tell about InvIT, let me tell you about the progress of InvIT that project SPVs technical due diligence is going to come and it will be completed in few weeks and we are expecting that draft total documents will get ready by this calendar year.”
Mohit Kumar
qa
“And what you observe in the H1, the bidding has been a pretty muted, can you expect this to pick up in H2 substantially to expect to get better than FY22?”
Management
qa
“In the pipeline tender has been floated few more projects are to come in this of NHAI and in continuation in ‘23 and ‘24 the way the Government is announcing that previous year also they have said about crores rupees for HAM projects and for next year ‘24 also.”
Mohit Kumar
qa
“Sir, in the second half or first half in your revenue has been slightly muted, how do you expect the H2, H2 of course is as said that FY24 onwards, we expect 15% to 20% growth will come.”
Mohit Kumar
qa
“Then in H2, do you expect it to be flattish?”
Management
qa
“So, H2 what I would say it would be more kind of flattish reason being that the project were depleting order book I would say because whatever projects right now we are having in our hand and which is executable and will be executing on those projects only and those projects are to be executed in next 2 years of time right.”
Risks & concerns — 11 flagged
Volatility of inflation and interest rate is still continuing the risk.
— Management
And coming to your third question which is on capacity built up, so it is an ongoing process on which we are continuously working on, work is going on many things and it is little bit difficult to give guidance on it like to tell you any particular sector where our decision has been done, it is not like that but we are doing work like our existing strength is may it be financially or may it be engineering or may be it design has worked on it like we have increased our design strength.
— Management
In financial also we have associated with new people who have become our partner in that our financial strength has also increased and in the coming time we are seeing some sector but at this level it is difficult to say that what new are we doing, I can tell this in the coming quarters only.
— Management
Or is it going to be a decline going forward.
— Teena Virmani
And inflation pressure will be a pass through this impact based on the agreement?
— Teena Virmani
Inflation is pass through, provisions are there we say there is a pass through but there is no direct linkage, it is linked to CPI, WPI while certain raw material or certain materials, no it is not having direct linkage with those index and all that and that also comes with some lag so, it is very difficult but yes, that is the one cause, one reason is there.
— Anand Rathi
See, there may be impact of inflation may around 1% right, so what I am saying that if I am saying then 15%, 16% kind of EBITDA margin ware expecting, so like inflation is coming down it is volatility I mean inflation so far is volatile right, sometimes some news come may be because of dollar rising, some may be because of some crude rising all that.
— Management
As such no challenge is there that in the coming time there are not many tender in this month maximum tenders are from between December to March.
— Management
So, not a big challenge of debarment but today itself we have received this so we are evaluating it that how to respond to it, how we have to deal with NHAI but as such there is no kind blame on us but NHAI has taken this action so we have to see that how we will deal with this and still we are very hopeful that under quarter 4 we achieve our target.
— Management
Is there a downside risk that if that much is not coming because competition will be heavy in that period and because lot of these people will be queuing up then any downside risk you see that in flow can be lower than estimated?
— Alok Deora
This years, the projects of pipeline at present, there is ample space for everyone and the way competition cooled down in HAM on seeing that I don’t see its challenge.
— Management
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Q&A — 9 exchanges
Q
Sir, my first question is how does the bidding pipeline look from NHAI and any color of the order outlook for H2 FY23? And what you observe in the H1, the bidding has been a pretty muted, can you expect this to pick up in H2 substantially to expect to get better than FY22?
Management
Sir, this year the projects in the pipeline in NHAI which we are targeting are HAM projects worth of Rs. 55,000 crores and they under in this financial year should be completely bided. In the pipeline tender has been floated few more projects are to come in this of NHAI and in continuation in ‘23 and ‘24 the way the Government is announcing that previous year also they have said about crores rupees for HAM projects and for next year ‘24 also. At present pipelines are very good although the working of Government that for first 3 quarter bidding working doesn’t happens much and working for biddi
Q
So, sir just continuing the other question, so in terms of months we have the flattish second half and then the 15%, 20% growth in 24, so that momentum should continue for at least couple of years?
Management
Of course, I think that this growth will remain for the coming 3, 4 years because the way focus of Government is towards Infra and type of work pending, in India a lot of work has to be completed in Infra, so for the next 3, 4,5 years this type of growth will be definitely there. And sir, we are saying that Rs. 15,000 crores inflow we are targeting, so till now how much we have received? Currently, the bid which we have submitted as I said that is of almost Rs. 16,500 crores. In this quarter we have bided for Rs. 16,000 crores and the tender has to be opened, so from that only we can know. We
Q
Sir, this debarment notice which you put now in exchange, can you just elaborate a little bit what is any reason that they have mentioned? NHAI has mentioned in the letter?
Management
We are evaluating this, by the way they have not given any reason and recently we have received it today itself and now we are evaluating on this that what and how should we take action and what should be done with this? Sir, just now we told that we have bided for 10 HAM projects, so will this debarment affect the outcome from the bidding or you think that the bidding deadline is beyond this one-month period? Sir, we have received this letter recently and we are evaluating it. We don’t know that how NHAI will act on this, this is being evaluated and we will take action on this however it is p
Q
Sir, just only 2 questions first is exactly of InvIT, that what is the amount which you are seeing and from this what will be the difference in the balance sheet in our operations. How does it help the company in terms of next level of growth? And secondly in the middle you started the transmission business what is the update on that like team buildings? Third final question if I see historically our company in every lean period of the last 1 years, 1.5 years works very much on capacity building and in the next 5 years ladder up in terms of revenue and EBITDA absolute numbers they were both me
Management
So, firstly I will come on InvIT, so in InvIT the big change from the company level will be that only debt will be reduced, in company’s balance sheet debt will be removed and will be placed in InvIT and what we are taking from the market debt will be reduced from that. So, from company level as such the balance sheet will get lighter and more vision will come to the company that the coming HAM projects, we complete it and transfer it to InvIT. And as an investor come and we can increase our execution efficiency. And progress of InvIT which I told that with SEBI its DOD. So, our work is going
Q
My question is related to margins, you mentioned initially that there were certain additional provisioning and some elevated cost in the quarter. Can you please specify what is this provisioning for and if you can quantify the impact or the amount related to the same?
Management
So, if we are comparing it with quarter of the last financial year right, so my additional provision is with respect to the debtors, long outstanding debtors I would say and there we have made some policies for which we are providing for if it is on basis that age bucket which we have decided internally and as an when those money is received back or then we will again will be treating as an income so, you will have that in fact in other income you will find this impact also where my other income is quiet high because of some write-back of provision which we have made in past, so is as per poli
Q
Sir, just continuing on the debarment, so I am harping on it. So, sir, I just want to understand in this one month we will make the presentation to NHAI what could be the reason and why they have done it, but sir is there any chances of getting this extended? Or is it for one month and done?
Management
See, how will NHAI take action in future or what will take we cannot make any brief on this, I am not able to tell you. I am not able to understand why this one month also? Why it happened where we don’t have any kind of blame on us. Till now there is no charge sheet of any kind upon the company, no kind of blame but now NHAI has taken the action and on that we are evaluating and will take proper action on it, will talk to NHAI. So, now what can be done and what cannot be done we cannot. But generally, Jiten in this what I would probably presume is that probably NHAI may give the debarment not
Q
Sir, just one more question on this recent notification on the debarment. So, any tenders which we would have built if they were to open now or so any thoughts will we go through or it is only for that period where you can’t bid?
Management
Sir, at present nothing can be said about this because we have received the letter recently. We are assessing it and it is not felt that something like this should be happened that it will affect the previous tenders. It is only for one month. See, this letter if we say, we can say that this debarment is only for one month, so one month started from today or day before whatever, but then point is 6 months before from today what I bided and took the work and started doing it how will it be impacted? I don’t think that there would be any impact. No, sir I was asking that we bided and tender has
Q
Sir, from the last 2 quarters we see that margins from our consolidated levels are coming out to a very strong at all levels. So, sir just wanted to understand that actually I missed the opening remarks I joined slightly late, that here is it because of the kind of bonus we are getting. Because of this some margins are coming means how should we look at consolidated level margins going forward?
Management
See, our consolidated margin largely coming because of the interest income which we are getting from NHAI on the operational HAM projects right and interest income in last 6 months you have seen has being rising and in 6 months it is quite high. is almost there. RBI raised by 2% almost. So it is all because of this that our income is rising at SPV level and hence that consolidated margins are rising. So, that is only because of the rising interest rates and this is we generate going forward as well if interest rate don’t change? Right.
Q
Thank you all and I expect that the company with full devotion and with full effort will work I assure you this and expect that all investors and bankers will stand with us and for good future we will all work together. We will participate in the growth story of India. As Modiji has made an agenda of $5 trillion economy, we will also participate in that. Thank you. Thank you all.
Parikshit Kandpal
Thank you Ajendra ji and Anand ji for this opportunity. We can disconnect the call.
Speaking time
Management
30
Anand Rathi
19
Jiten Rushi
14
Moderator
11
Shravan Shah
7
Teena Virmani
7
Alok Deora
5
Ashish Shah
3
Parikshit Kandpal
2
Mohit Kumar
2
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Opening remarks
Parikshit Kandpal
Thanks Tanvi. I would like to thank the management of G R Infra for giving us this opportunity to host the call. Today from G R we have (Inaudible) 1.04 Director of the company and Mr. Anand Rathi ji is a Group CFO, so without taking any further time, I would now like to hand over the floor to the management for the opening remark and update from the quarter. Thank you and over to you, sir.
Management
Thank you Parikshit ji. Good after ladies and gentlemen. I welcome you all on the behalf of G R Infraprojects Limited to the Q2 financial year 23 Earnings call and with me is Group CFO Shri Anand ji Rathi and now I would like to talk with you the highlights of second quarter. Due to due to getting appointment date in most of our projects, there is improvement in execution in this quarter as compared to last year’s same quarter. If we look at the standalone basis then the company’s operational revenue with 5% increase was Rs. 1,777 crores which was Rs. 1,699 crores same Q2 quarter last year. And in this quarter company received an early completion bonus of almost Rs. 6 crores.t The Company’s EBITDA was Rs. 260 crores, so in previous year same quarter it was Rs. 278 crores. On 30th September 2022 by including L1 projects our order book value is about Rs. 16,200 in which L1 projects Rs. 592 crores value is also included. On 30th September 2022, the company’s executable order book is about
Anand Rathi
Thank you, sir for giving me this opportunity. Good afternoon all. Let me run pass through financial highlights of the company for the quarter ending September 2022. So our standalone revenue from operation is at Rs. 1777 crores in the quarter with an increase of around Rs. 77 crores or Rs. 78 crores compared to the same quarter of the previous year. Similarly, our consolidated revenue from operation also increased by Rs. 254 crores at Rs. 2136 crores with a growth of approx. 13% compared to the same quarter of the previous year. Our standalone EBITDA margin for the quarter was around 14.63% which is lower and compared to of same quarter of the previous year. Its decrease was mainly on account of the additional provisioning, as well as some CSR expenses, but also the elevated level of inflation is also one of the cause for this decrease. Our EBITDA margin at group level has increased to 28% in quarter ended September 2022, from 21% in the quarter ended September 2021, is largely due to
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