GPTINFRANSEyear 2024August 03, 2023

GPT Infraprojects Limited

5,970words
86turns
12analyst exchanges
2executives
Management on call
Atul Tantia
EXECUTIVE DIRECTOR AND CHIEF
Vishal Mehta
STELLAR IR ADVISORS
Key numbers — 40 extracted
rs,
n a remarkable start for the fiscal year 2024, the strongest quarterly performance on all parameters, that is revenue, EBITDA, PAT, and Cash Flow. This achievement is attributable to our strong execut
INR 234 Crore
Now moving ahead to our financial performance for the First Quarter of FY 2024 Our revenues was INR 234 Crores on a stand-alone basis, which compared to INR 188 Crores last year, representing a growth of app
INR 188 Crore
irst Quarter of FY 2024 Our revenues was INR 234 Crores on a stand-alone basis, which compared to INR 188 Crores last year, representing a growth of approximately 25% Y-o-Y. On a consolidated basis, the revenu
25%
d-alone basis, which compared to INR 188 Crores last year, representing a growth of approximately 25% Y-o-Y. On a consolidated basis, the revenue stood at INR 236 Crores compared to INR 188 Crores fo
INR 236 Crore
, representing a growth of approximately 25% Y-o-Y. On a consolidated basis, the revenue stood at INR 236 Crores compared to INR 188 Crores for the last year, representing a growth of 26% Y-o-Y. In both the
INR 188 Crore
approximately 25% Y-o-Y. On a consolidated basis, the revenue stood at INR 236 Crores compared to INR 188 Crores for the last year, representing a growth of 26% Y-o-Y. In both the stand-alone and consolidate
26%
ue stood at INR 236 Crores compared to INR 188 Crores for the last year, representing a growth of 26% Y-o-Y. In both the stand-alone and consolidated numbers, we have set a target of approximately
20%
Y-o-Y. In both the stand-alone and consolidated numbers, we have set a target of approximately 20% growth in the current fiscal year. This growth will be majorly driven by the significant executio
92%
be majorly driven by the significant execution in the Infrastructure segment, which accounted for 92% of our total revenues for the first quarter. Our stand-alone EBITDA for the quarter ended 30 Ju
INR 32.5 Crore
venues for the first quarter. Our stand-alone EBITDA for the quarter ended 30 June 2023, stood at INR 32.5 Crores compared to INR 23.4 Crores, representing a growth of 39% Y-o-Y with EBITDA margin at 13.9% co
INR 23.4 Crore
Our stand-alone EBITDA for the quarter ended 30 June 2023, stood at INR 32.5 Crores compared to INR 23.4 Crores, representing a growth of 39% Y-o-Y with EBITDA margin at 13.9% compared to 12.4% for the same p
39%
nded 30 June 2023, stood at INR 32.5 Crores compared to INR 23.4 Crores, representing a growth of 39% Y-o-Y with EBITDA margin at 13.9% compared to 12.4% for the same period last year. We are confide
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Guidance — 20 items
Atul Tantia
opening
“In both the stand-alone and consolidated numbers, we have set a target of approximately 20% growth in the current fiscal year.”
Atul Tantia
opening
“This growth will be majorly driven by the significant execution in the Infrastructure segment, which accounted for 92% of our total revenues for the first quarter.”
Atul Tantia
opening
“With the improvement in revenue, the operational efficiencies have helped us to ensure long-term EBITDA, and we expect the same to maintain going forward.”
Atul Tantia
opening
“This order is expected to be completed in this financial year, and we expect further incremental orders for the subsidiary in the near term as well.”
Atul Tantia
opening
“This is despite the closure of the contract for DFC, and we anticipate increasing momentum in the Sleeper segment, which is backed by commencement of operations in South Africa and commissioning of the facility in Ghana.”
Atul Tantia
opening
“We expect that for the full year FY 2024, this segment will contribute almost 12% to 13% of annual revenues.”
Atul Tantia
opening
“The management is confident to settle all the existing arbitration cases with the Central Government and PSUs in this calendar year, and this will entail receipt of approximately INR 60 Crores from these old arbitration cases, 75% of this receipt will be used to reduce debt and balance will be used for long- term working capital.”
Atul Tantia
opening
“With the Eastern and Western Dedicated Freight Corridor expected to be commissioned in this financial year, Indian Railways and the Indian economy will start seeing full benefits of this ambitious project that aims to change the face of trade transportation across the country.”
Atul Tantia
opening
“We have started the fiscal year 2024 with a strong performance, and we expect to go ahead with the same guidance of approximately 20% growth in the revenues and approximately 40% growth in profit for FY '24.”
Atul Tantia
qa
“So average interest rate will be almost 10.5%.”
Risks & concerns — 1 flagged
So as you scale up the business, at 150 days also, you'll not have too much of working capital debt, which will broaden that internal nature of business, because a lot of infra companies have stress point only on this issue of working capital cycles.
— Dhiraj Sachdev
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Q&A — 12 exchanges
Q
Congratulations for a great set of numbers. Sir, you've mentioned in your comments before that we have a capacity of 240,000 concrete sleepers in Ghana. What would be the revenue potential of this capacity?
Atul Tantia
Thank you. The revenue potential, like I said, we have an order of INR 123 Crores in Ghana. And every year -- annually, we can get revenues of almost INR 80 Crores from that facility. Okay. Perfect. And I would also assume that since we have not generated any profits in Ghana, our actual operating margins would have further higher potential as we start getting profitable in Ghana, right? So if you see our stand-alone numbers are much better than the consolidated numbers. The Ghana operations will come in the consolidated numbers. And obviously, the consolidated numbers will kind of catch up to
Q
Congratulations for a good set of results. Just -- I mean, how much is the government order book and how much is from private players?
Atul Tantia
100% is government order book. And do you see any delay in your execution? No, no, our execution is quite strong, and we have achieved revenue growth of almost 27%. There's no delay. Okay. And what was this order book last year, if I would say, so? Has it increased -- just wanted to understand whether it is increasing? Last year if we see or any -- how is the trend on the order book? 31st March 2022, it was INR 1,684 Crores if you see Slide 8 on our presentation, which was INR 2,276 as on March '23 and is currently INR 2,288 Crores as on June. And exports you said, what is the business on expo
Q
Sir, I have a couple of questions. One, you mentioned that you are probably looking at something like this year our new orders to the extent of INR 1,600 Crores. And out of which, we have received something INR 200 Crores in first quarter. So like -- are we expecting the major part of the orders coming in, in second half or something like that? I mean which state it will be, more on infra side or more on sleeper side?
Atul Tantia
So just to correct you, this first quarter, we received almost INR 250 Crores, not INR 200 Crores of new orders. And most of the orders are in the Infrastructure segments. Sleeper business is almost -- in terms of revenues, almost 10% expected to be this year. And in terms of order book, the Sleeper segment is about 12% of the total order book. In terms of the areas, it'll be, like I said earlier as well, it's 100% government contracts, primarily focused on railways. Our core competency is in terms of bridges. So we expect the orders to come in from that segment. And sir, we have seen margins
Q
With respect to your comment about entering new geographies like Maharashtra. So I just missed the part. Can you just please elaborate what's the reason for entering that place?
Atul Tantia
So we had, we have got 3 contracts in Mumbai City from MRIDCL, which is Maharashtra Rail Infrastructure Development Corporation Limited. One is a cable-stayed bridge over Byculla railway station, another is a bridge over Ghatkopar railway station there, and another is a connection of the Ghatkopar bridge to the Eastern Expressway. Three Contracts total to about INR 600 Crores. And the execution for them is also going on smoothly. So, what is like the time line of this contract, by when do you expect to finish? We expect to finish in FY '25. FY '25. Okay. Okay. And this outlook is given 20% gro
Q
Just require one clarification. You mentioned our total debt is at INR 202 Crores, and our interest cost is 10.5%. So, should we assume that total interest expense should be for the year around INR 22 Crores?
Atul Tantia
No, because finance cost includes bank guarantee commission; processing fees; interest on mobilization, advance and others. Last year, the finance cost was INR 36 Crores. We expect it to be below INR 30 Crores this year.
Q
So basically, I'm new to this company. So just to get an understanding on your international business. If you could just brief us about -- just to get an understanding of your South African business and Ghana business. And individually, usually, what is the EBITDA margins this concrete sleeper business gets you and the nature of contracts and the time line for execution if you could?
Atul Tantia
So we have three factories in Africa, 1 in South Africa, which is there since 2008, '09. Another in Namibia, which is a neighboring country for South Africa, which is there since 2011. And the third one we recently commissioned in Ghana. The factories in South Africa and Namibia and Ghana -- or the factory in South Africa and Ghana is housing a subsidiary locally there and the factory in Namibia is an associate because it's a PPP model with the government of Namibia. In terms of the revenue potential for each of the factories last year, means the revenue potential for South Africa at peak reve
Q
So I have a couple of questions. My first question is that are we planning to change our order book mix going forward? Like we have achieved a 12% order mix from concrete sleeper segment.
Atul Tantia
No. We -- so the Infrastructure business continues to be the backbone of our business and has done 85% to 90% of revenues as well as order book, and we expect that mix to be maintained going forward as well. Okay. Okay. Also if you could throw some light on the Jogbani arbitration? I'm just wondering are we... So, as I said in my opening remarks, we have applied for this Vivad Se Vishwas Scheme II which was introduced in the last union budget scheme of the Honorable Finance Minister. In her speech, she had allocated money for this scheme to settle all the existing arbitration disputes for the
Q
Congratulations for the good set of numbers. While a couple of my questions have already got answered by the previous participant, one or two more questions I would like to understand and clarify. Is there any periodicity in either receiving the orders and even the execution of the orders, maybe because of the rainy season or some other seasonal effect? So just to understand whether our quarters would remain equally on the receptor order or on the execution or it will have some periodicity?
Atul Tantia
Sure. So generally, the first half is almost 40% of the full year numbers. Having said that, this year's monsoon slightly delayed, especially -- or barring I would say, North India, monsoon is quite delayed and less in some sense. The second quarter is obviously affected by monsoon but not that much. So, if you were to average it out, maybe in the second quarter, we would be almost 18% to 20% of the full year revenues compared to 25% if you were to flatline it. In terms of order availability, obviously, it depends on the government budget and the focus of the ministry, which is there, thankful
Q
So actually, I have 3 related questions and all of them on the infrastructure side of the domestic business. So with the current setup or the facility that you have and the investment that you have done, what kind of lease revenues could we generate? And secondly, considering the growth rate we are envisaging for the future, when would you see the investment -- further investments to be done in the sector -- segment?
Atul Tantia
So in terms of the Infrastructure business, we don't have a facility per se. We do set up our facilities in the various locations where we do get the contracts. So the investment that we have done is towards plant machinery, manpower and everything, and obviously, the credentials that we have built over the last so many years in terms of our execution capabilities. Peak execution is something that is -- there's no number, I think, in this industry that you can give in terms of peak execution per se. It depends on the order book that you can get. And we have been quite disciplined in terms of o
Q
Sir, I've been hearing a lot of due diligence on selection of the order based on 13%, 13.5% margin. Is there a criteria for working capital, way of selecting orders as well? Because I've seen in the past being an infra-oriented company, your collections or operating cash flows have been pretty decent in terms of working capital. And is it going to sustain going forward? And what's the normalized working capital?
Atul Tantia
Sure. So first of all, I'll just correct you. What I think said -- what's I think I have said if maybe you're mistaken, it's 12.5% to 13%, not 13%, 13.5% in terms of the hurdle rate for the operating margins. In terms of the working capital, obviously, we would like to get to 150-odd days in terms of working capital, which would be quite a good number. And hopefully, that would also be achieved by the settlement of this arbitration disputes which have been stuck on the balance sheet -- part of which have been stuck on the balance sheet for quite some time. And this Vivad Se Vishwas Scheme II w
Q
My question was the revenue growth that you are expecting of 20%. Is it from domestic or from the overall business?
Atul Tantia
It's both from domestic as well as the overall. So this year, on a stand-alone basis, which is domestic business, we have grown by 26%. And we expect both domestic as well as the overall business to grow in tandem. And can you just break it down like how much revenue growth will be there from infra and from concrete? So, in terms of the Infrastructure segment, it will contribute almost 87% to 88% of the overall revenue and concrete will contribute almost 12% to 13% of the overall revenue. Infrastructure segment will grow by almost 20% to 23%, and Concrete segment would grow about 15% to 18%. O
Q
Thank you, everyone, for participating in our Q1 FY '24 Earnings Conference Call for the period ended 30 June 2023. I hope we've been able to address all your queries. In case you have any other queries, please direct the same to us or Stellar IR, our Investor Relations advisers. Thank you again, and have a good day.
Management
Speaking time
Atul Tantia
37
Moderator
14
Dhiraj Sachdev
7
Parth Kotak
5
Shivam Saxena
4
Vignesh Iyer
4
Ankita Rao
4
Kalpesh Parekh
3
Rahil Shah
3
Rishith Shah
2
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Opening remarks
Atul Tantia
Thank you. Good morning, everyone, and a warm welcome to the GPT Infraprojects Earnings Conference Call for the first quarter ended June 30, 2023. The results presentation, along with our press release has already been uploaded on the company's website and that of the stock exchanges. I hope that you have had a chance to go through the same. Today, on the call, we also have with us Stellar IR, our Investor Relations advisors. I'm glad to announce that the Q1 FY '24 has been a remarkable start for the fiscal year 2024, the strongest quarterly performance on all parameters, that is revenue, EBITDA, PAT, and Cash Flow. This achievement is attributable to our strong execution capabilities, steady focus on cash flow and also our commitment to expand to newer geographies with the commissioning of the factory in Ghana. Now moving ahead to our financial performance for the First Quarter of FY 2024 Our revenues was INR 234 Crores on a stand-alone basis, which compared to INR 188 Crores last yea
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