GRINFRANSEQ3 FY23February 14, 2023

G R Infraprojects Limited

8,452words
169turns
16analyst exchanges
2executives
Management on call
Parikshit Kandpal
HDFC Securities
Anand Rathi
the Group CFO
Key numbers — 40 extracted
7%
he third quarter. On a standalone basis, Company’s operational revenue with an increase of almost 7% was Rs. 1,899 crores which in the last quarter was Rs. 1,777 crores. The company’s EBITDA with an
Rs. 1,899 crore
d quarter. On a standalone basis, Company’s operational revenue with an increase of almost 7% was Rs. 1,899 crores which in the last quarter was Rs. 1,777 crores. The company’s EBITDA with an increase from 6.5%
Rs. 1,777 crore
rational revenue with an increase of almost 7% was Rs. 1,899 crores which in the last quarter was Rs. 1,777 crores. The company’s EBITDA with an increase from 6.5% was Rs. 277 crores which was Rs. 260 crores in
6.5%
crores which in the last quarter was Rs. 1,777 crores. The company’s EBITDA with an increase from 6.5% was Rs. 277 crores which was Rs. 260 crores in the last quarter. The company’s profit after tax
Rs. 277 crore
h in the last quarter was Rs. 1,777 crores. The company’s EBITDA with an increase from 6.5% was Rs. 277 crores which was Rs. 260 crores in the last quarter. The company’s profit after tax increased from 6% a
Rs. 260 crore
as Rs. 1,777 crores. The company’s EBITDA with an increase from 6.5% was Rs. 277 crores which was Rs. 260 crores in the last quarter. The company’s profit after tax increased from 6% and was Rs. 174 crores whi
6%
rores which was Rs. 260 crores in the last quarter. The company’s profit after tax increased from 6% and was Rs. 174 crores which was Rs. 164 crores in the last quarter. Our order book value till 31
Rs. 174 crore
was Rs. 260 crores in the last quarter. The company’s profit after tax increased from 6% and was Rs. 174 crores which was Rs. 164 crores in the last quarter. Our order book value till 31st December 22, was al
Rs. 164 crore
e last quarter. The company’s profit after tax increased from 6% and was Rs. 174 crores which was Rs. 164 crores in the last quarter. Our order book value till 31st December 22, was almost Rs. 14,000 in which
Rs. 14,000
ch was Rs. 164 crores in the last quarter. Our order book value till 31st December 22, was almost Rs. 14,000 in which one project worth Rs. 700 crores appointed date has yet to come. In order book mostly 90%
Rs. 700 crore
ter. Our order book value till 31st December 22, was almost Rs. 14,000 in which one project worth Rs. 700 crores appointed date has yet to come. In order book mostly 90% shares are of Roads and Highway Develop
90%
00 in which one project worth Rs. 700 crores appointed date has yet to come. In order book mostly 90% shares are of Roads and Highway Development Projects. In the quarter third of FY23, the Company h
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Guidance — 20 items
Parikshit Kandpal
opening
“Anand Rathi - the Group CFO of the Company, so the format of the call will be and I will hand over the call to Mr.”
Parikshit Kandpal
opening
“Our current years order intact target is still maintained at Rs.”
Anand Rathi
opening
“Balance captive contribution which is required to be made for our under-construction HAM/BOT project is Rs.”
Alok Deora
qa
“Sir just wanted to understand on the order book side, so we have a kind of not won any projects hence in this year and also one project of metro where you were L1 and one got cancelled.”
Alok Deora
qa
“So, sir in this fourth quarter how much target are we expecting of inflows?”
Alok Deora
qa
“Ajendra Kumar Agarwal: We are maintain our same target of around Rs.”
Alok Deora
qa
“2 which is approximately a project of Rs.”
Alok Deora
qa
“2,500 crores each and we have quite good expectations that we should get the project.”
Alok Deora
qa
“I just want to ask one more thing, this equity contribution what would be this year, next year?”
Alok Deora
qa
“200 crores towards the HAM projects, so how much would be for the next year, sir?”
Risks & concerns — 11 flagged
Prices has to be seen, location also has to been seen, decision is taken after analyzing whatever risk factors are there, but we will analyze everything whichever is in our pipeline after analysis final decision will be made.
— Shravan Shah
And rest in HAM also you feel so much competition and that is what we are little bit hesitant to give the guidance we can see a risk that this number can go Rs.
— Shravan Shah
14,000 or can go 13.5% because we can see that little bit of risk?
— Shravan Shah
So, lastly on the margin side, are you seeing the input inflation pressure reducing, price of cement is going reducing, steel price is reducing, so due to that margins should improve in Q4 and FY24?
— Mohit Kumar
So, I don’t think that the pressure of inflation will be low going forward.
— Anand Rathi
Now, I would say it is very difficult to take a call in terms of what inflation will be or what kind of inflation scenario will be into there in next 1 year.
— Anand Rathi
Maybe it is possible in next quarter, but it is very difficult to anticipate it.
— Anand Rathi
So, probably going forward we will be able to have more margins and basis of our past experience we will be having more margin into, but yes of course that kind of margin is not there, 15%, 17% margins is difficult.
— Anand Rathi
I would say 40 or 45% of total revenue is generally booked in the last quarter because this last quarter is total unhindered quarter, so it is very difficult to tell in today’s date, but that is the range.
— Anand Rathi
I want a clarification on the margin that next year the guidance which we have given in that margin impact is 15% or there will be some pressure on margin?
— Hiten Boricha
867 crores between our standalone and consolidated which you were saying is coming due to some financial cost of NHAI and which will not come in the future, so my point was that if there is a 14% difference, so sir will it come or not in future because 14% of FY24 is bit difficult, so needed some clarification.
— CA Akash Dhanuka
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Q&A — 16 exchanges
Q
Good afternoon, sir. Congratulations on a decent pickup in execution. Sir just wanted to understand on the order book side, so we have a kind of not won any projects hence in this year and also one project of metro where you were L1 and one got cancelled. So, while you mentioned the bid pipeline being very strong, how many orders realistically we are looking to achieve in the fourth quarter now? Ajendra Kumar Agarwal: Generally, if you see historically then the bidding happens in the last quarter only although some biddings on the basis of L1, but in that competition is so much that those who
Alok Deora
So, sir in this fourth quarter how much target are we expecting of inflows? Ajendra Kumar Agarwal: We are maintain our same target of around Rs. 15,000 and like yesterday only we bidded of Rs. 2 which is approximately a project of Rs. 2,000 crores to Rs. 2,500 crores each and we have quite good expectations that we should get the project. And now in ropeway also Government is giving a lot of interest. In the coming times good projects of ropeway will also be done. In transmission also our projects are in good pipelines and are already in highways. I just want to ask one more thing, this equity
Q
Sir just continuing the previous question and for the better understanding of everybody, can you repeat the value and number of projects which we have already bidded segment wise and the projects value and the projects where we are planning to bid till March? Ajendra Kumar Agarwal: In this which we have already bidded, in highway we have bidded for 48 projects of almost Rs. 42,000 and like this in railway we have bidded for Rs. 5,000 crores and in ropeway we have bidded for Rs. 2,500 crores.
Shravan Shah
And in ropeway first you mentioned that there are 2 projects of Rs. 2,500 crores each or both together Rs. 2,500 crores? Ajendra Kumar Agarwal: No, both together, both together are of Rs. 2,500 crores. And how much more are you going to bid, sir? Ajendra Kumar Agarwal: Under HAM if you see in highway then approximately Rs. 110,000 crores projects are there which are in pipeline, in Government whose bid has already come and approximately for tunnels is of Rs. 25,000 crores, for railways it is for Rs. 8,700 crores, transmission is about Rs. 10,000 crores projects are in pipeline. And this entire
Q
Sir my first question is that you have made an agreement with IndiGrid what is its nature? And will we do all the bidding of all new transmission assets with IndiGrid?
Anand Rathi
So, with IndiGrid we have done some sort of partnership where we have identified certain projects where we will be having support both in terms of equity, as well as monitoring, as well as our guidance because IndiGrid is there into this business for last so many years where we will be continue to receive the guidance from or even capital also. So, such thing has been done, but it is not that we will do all the projects with IndiGrid only. We have identified certain projects where we will be bidding jointly. Second question is have we capped it or what I heard that we will bid up to Rs. 5,000
Q
Sir first question is on the status of the InvIT, elaborate on it a bit like exactly at what stage we are and by when do we expect to launch the InvIT?
Anand Rathi
As Ajendra sir told we have already filed the DOD and we received the first set of comments also from SEBI. Recently we have received the first set of comments from SEBI, so very soon we will be starting our marketing and I think March would be so early probably March end or by April end we will be done with this InvIT launch and all that. So, secondly, on terms of appointed date, one appointed date is pending for the project in Maharashtra, so by when do we expect that also to come? So, in that I think some land issues are going on probably forest issue may be there, so some issues are there
Q
Sir on the bid pipeline which is said that Rs. 42,000 crores on roads, Rs. 5,000 over railways, Rs. 25,000 crores ropeways so when are these bids expected to open, sir? Ajendra Kumar Agarwal: There is a regular process of NHAI which is dependent mostly on number of bidders. Many times, number of bidders is more then they take more time and if number of bidders is less then it gets quickly because after the evaluation for each technical and financially is done then only the bid is opened, but in generally within one month it is done, a few months are extended.
Jiten Rushi
Sir almost Rs. 50,000 crores of projects that that the tenders are awaited to open that is what we can conclude? No, it is a Rs. 14,000 crores where bids are yet to open…. Sir you said that Rs. 42,000 crores, Rs. 5,000, 500 crores in the Q&A where you said the bids this bids you are saying you mean to say you have completed? Pipeline. So, what you are saying is, when these bids would be when those projects would be bidded it will take another one month of time? It is not necessary that every project is taking one month of time. It opens in 7 days and it may take as more as…. Sir on the balance
Q
Sir my first question is that the guidance that you have given for the next year in which you have done from 15% to 10%, so just wanted to understand what is the main reason to reduce this growth guidance so low in exhibition phase because as you mentioned in your opening remarks the order book pipeline is very strong, so our guidance which has come down is due to what reasons? Is it less in execution process or is it because of inflation? Exactly what is the reason for that, sir?
Anand Rathi
No, execution is streamlined, actually now the new projects which will come in that little time is required to start the project, so due to that it is otherwise the execution is properly streamlined. The time about which you are saying that is the appointment date, sir? Is there delay in appointment dates? No, not in appointment date. It is because of that what we were expecting that if we got some work in December, in October also, so in third quarter also if we got work, but so far we haven’t any received any order and HAM projects are unlike EPC. EPC projects is like once you receive the or
Q
So, 2 questions from my side, one what is our overall exposure to view the HAM projects till date? Ajendra Kumar Agarwal: Exposure you mean to say?
Parvez Qazi
Open equity plus loans and advance altogether what have we included? So, Rs. 1,800 crores is the total equity investment so far. So, in Q3 in 9 months have we received any early completion bonus? Or we haven’t received? No, we haven’t received any, I mean 9 months we must have received some which we have already given that number in the previous results, but for the Q3 we haven’t received any bonus.
Q
Good afternoon, sir and congratulation on the decent set of numbers. Sir you in the first 9 months have done sales of around Rs. 7,000 crores and you are saying FY24 growth as 8 to 10%, so what will you close for FY23?
Anand Rathi
In FY23 we are having our expected growth of in the range of 5% to 10% for FY23. Means upon FY22? Then 5 to 10% is a big margin like our Rs. 7,000 crores has come, our 1-1/5 months has already passed of last quarter, so roughly we would have an idea what exact figures we will close? Exact number can be known after getting exact, in this last quarter it is 40%. I would say 40 or 45% of total revenue is generally booked in the last quarter because this last quarter is total unhindered quarter, so it is very difficult to tell in today’s date, but that is the range. Will it be better than the thir
Q
Sir out of this total order book of around Rs. 14,000 crores, I missed on a point of one project where your appointed date is pending, so what is the size of this particular project where appointed date is pending?
Anand Rathi
It is around Rs. 700 crores. So, then almost Rs. 13,300 crores order book is now ready to be executed? Right. So, there are no concerns on that in terms of execution? Right. And on the transmission side you mentioned that there is a pipeline of around Rs. 10,000 crores of projects where you would be bidding and another Rs. 5,000 crores where you would be bidding along with the IndiGrid, so these are including both? You would be bidding or targeting projects worth Rs. 15,000 crores on the transmission side? No, total Rs. 10,000 crores. Ajendra Kumar Agarwal: Total Rs. 10,000 crores in this Rs.
Q
Sir I was just saying that subcontracting expense is decreasing since like 3, 4 years, so I wanted to know are you focusing more in-house or what? I am saying consolidation figure?
Anand Rathi
That is a case-to-case basis decision and project-to-project. Somewhere we can have more subcontracting and somewhere we can do in-house. So, it is varying. Sir I wanted to know what is mining royalty? Are you paying? Mining royalty is very depending on which state we are working. Somewhere it is no royalty, somewhere it is huge amount of royalty. Ajendra Kumar Agarwal: It depends on the state and material what material you use. There is different royalty and royalty is different in aggregate. Different royalties in different material and different royalty for different states.
Q
I wanted to ask about the status of CBI enquiry that was going on?
Anand Rathi
So, CBI has filed their report and that matter is with court in Guwahati, so we are pursuing and we have appointed a legal advisor, we are taking the help of legal advisor also and we are representing our case before the court. What is the timeline do we expect the outcome to come? That depends on the court madam, the court keeps on giving date. Courts procedure is a bit long. For us to commit any timeline will be. Second question is the last one how much equity have we invested in 9 months and in previous 3 quarter? Total I think it was Rs. 1,300 something odd crores as of March 2022 and righ
Q
I wanted to understand from you that once the InvIT comes in what would be its impact on the G R Infra balance sheet? Specifically according to you how much equity can be released and how much debt will go in that InvIT? Any guidance on that aspect?
Anand Rathi
So, now the projects so far we have identified to switch over to InvIT is are of 7 projects where total debt is around Rs. 3,800 crores as on date, so depending on the timing of the InvIT probably, I believe that to that extend my debt would go outside my G R balance sheet because that again depend on as whenever this InvIT would happened then what our auditors would suggest I don’t know, but that is the case, I will give you just the numbers that this is the debt number and regarding your question about the release of equity, there is no cash transaction which as of now we are proposing we ar
Q
Sir just one question rest of the question is answered. There is a bar from bidding for NHAI for one month in November and we did not get any reasons for that in the previous call, so what was the reason and what are the things that we have done, so that it won’t happen again?
Anand Rathi
I think that was because of that CBI issue, they have issued this kind of debarment orders Suo Moto basis though we have been given this opportunity to represent our case, but they have ignored our case and they have debarred it for one month and to avoid those circumstances going forward we have to be more vigilant, we have to be more alert in terms of what because it was the case paid by CBI that some sort of bribing is happening, so we have to be more vigilant. We have to be more careful going forward.
Q
Sir I have 2 questions, first wanted some better clarity on how much equity we have invested in HAM projects? How much has to be done? And what is the target if you can give these things, so that it will be really helpful?
Anand Rathi
See, total investment of equity commitment from our side is as of December is Rs. 1,580 crores which is to be infused in the next 2, 2.5 years and we had to do a total of Rs. 3,200 crores, so that is the case. Rest has been done? The difference is done. Difference is done. Sir lastly continuing with what the previous participant asked on the debarment order which you received, so what is the current status? Are we allowed to bid? How was it currently panning out? Debarment order, so that period was over in the month of the first week of December. Yes, sir that was for one month only and after
Q
I want a clarification on the margin that next year the guidance which we have given in that margin impact is 15% or there will be some pressure on margin?
Anand Rathi
See, in margin depending on the order I will be getting and the margin which I can expect in the new orders, so little changes may happen, but otherwise existing order book I mean I am pretty sure that we will be having that kind of margin 14%, 15%.
Q
I wanted to ask the previous point that in the whole 9 months, there is a difference of Rs. 867 crores between our standalone and consolidated which you were saying is coming due to some financial cost of NHAI and which will not come in the future, so my point was that if there is a 14% difference, so sir will it come or not in future because 14% of FY24 is bit difficult, so needed some clarification.
Anand Rathi
So, Mr. Dhanuka the problem is that the impact would be only in case of interest rate movement, currently it is like that in last 9 months you see that there is a huge movement in interest rate which is called as bank rate, repo rate of RBI and this scenario when it comes back again let us say may be after 4 years, 5 years, 10 year down the line I am not aware of, if this movement comes back again then there would be impact otherwise it would be normal. So, the impact which is today is abnormal impact in the current year. Sir what would be the normal impact? How much would be the difference be
Speaking time
Anand Rathi
69
Moderator
19
CA Akash Dhanuka
17
Jiten Rushi
13
Shravan Shah
12
Teena Virmani
9
Alok Deora
5
Mohit Kumar
4
Hiten Boricha
4
Navid Virani
4
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Opening remarks
Parikshit Kandpal
Thanks Tanvi. First of all, I would like to thank the management of G R Infra for giving us this opportunity to host the Third Quarter FY23 Results Call. Today we have Mr. Ajendra Kumar Agarwal Ji, he is the Managing Director of the Company and Mr. Anand Rathi - the Group CFO of the Company, so the format of the call will be and I will hand over the call to Mr. Ajendra Kumar Agarwal for Industry overview followed by the Financial overview by Mr. Anand Rathi, Group CFO. Over to you Ajendraji. Ajendra Kumar Agarwal: Thank you Parikshit Ji. Good afternoon ladies and gentlemen. I welcome you all on the behalf of G R Infraprojects Limited to the Earnings Call for quarter third financial year 23. Today with me is our Company’s Group CFO Sri Anand Rathi. Now I want to share with you the key highlights of the third quarter. On a standalone basis, Company’s operational revenue with an increase of almost 7% was Rs. 1,899 crores which in the last quarter was Rs. 1,777 crores. The company’s EBITDA
Anand Rathi
Thank you, sir. Thank you for giving me this opportunity. Let me present you the highlights of the financial performance of the Company for the quarter ended December 2022 in brief. Our standalone basis revenue from operation for the quarter was approximately Rs. 1,899 crores with an increase of approximately Rs. 80 crores on year-on-year basis and consolidated revenue from operation for the same period also increased by approximately Rs. 237 crores on year-on- year basis to Rs. 2192 crores. Our standalone EBITDA margin has increased to 14.58% in the quarter ended December 2022 from 14% approx. in quarter ended December 2021. Our EBITDA margin at consol level was around 27% in the quarter ended December 2022, higher from 18.72% recorded in the quarter ended December 2021. It was largely due to increase in the finance income recognized in the current period due to the revision in the bank rates. Our PAT margin at standalone level increased by 35% approx. to Rs. 174 crores in the quarter
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