Q3 24/25

Feb 13, 2025

Summary

Q3 FY25 saw 11% YoY revenue and PAT growth, with a robust order book and stable margins. Bangladesh project delays impacted revenue, but operations have resumed. FY25 revenue is guided near INR 10,000 crore, with strong order inflow and stable double-digit margins expected.

Ladies and gentlemen, good day and welcome to the Cemindia Projects conference call hosted by ICICI Securities. As a reminder, all participants' lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. I now hand the conference over to Ms. Nidhi Shah from ICICI Securities. Thank you, and over to you. Thank you, Mike. Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q3 FY 2025 earnings call of Cemindia Projects Limited. Today we have with us from the management Mr. Jayanta Basu, the Managing Director, Mr. Prasad Patwardhan, the CFO, Mr. Rahul Agarwal, Head of Investor Relations. We begin the opening remarks from the management, followed by a Q&A. Thank you, and over to you, sir. Thank you, Nidhi. Good morning, everyone. This is Prasad Patwardhan from Cemindia Projects. Before we start the con call, let me remind everyone that there could be some forward-looking statements made during this call, which will be subject to several risks and uncertainties, and the actual results may differ materially from these statements. Now, coming to our numbers, which we announced yesterday for Q3 FY 2025, we have reported a top line of INR 2,250 crores approximately as against INR 2,070 crores a year ago, which represents a growth of 11%. EBITDA margin has come in at 9.5%, and profit after tax is INR 87 crores, which is again a growth of 11% on a YoY basis. For the nine months ending December 2025, our consolidated revenue is INR 6,600 crores, which represents a growth of 21% on a year-on-year basis. EBITDA margin for the nine-month period stands at 9.9%. Profit after tax is INR 259 crores for the nine-month period, as against INR 185 crores in the previous financial year, nine months, a growth of 41%. Our balance sheet continues to be under leverage, and the net debt to equity ratio is about 0.4 times. In this nine-month period, we have secured orders for about INR 6,370 crores, and in addition to that, we are L1 on orders for about INR 800 plus crores. That is all from my side to start with. I will now hand over to Mr. Basu for the initial comments, and then we will start with the Q&A session. Thank you, Prasad. Welcome all to this Q3 result telecom, where Prasad has given the data for the financial, that is, revenue and profitability. There are some significant achievements we had during last quarter. First of all, I must say that we have got two big orders. That is Vadhvan Port and IKEA. Both are close to INR 1,600-INR 1,700 crore. Vadhvan Port, as you know, that is an initiative by the Government of India. Huge investment is expected, and we are happy that we too get into that in the first package. Similarly, IKEA also a very prestigious job, iconic building at Delhi, Noida. That is also a good order book for us for last quarter. In addition, we have some other small jobs from various agencies. Today, if you see our work security of INR 6,600 crore GCR, and we are expected to get up to INR 9,000 crore, which I hope it will be achieved. Coming back to last quarter performance in terms of the revenue, which is INR 2,240 or INR 2,250 crore. This is largely impacted because of the Bangladesh project. As all of us know that we are having a sizable job going on in Bangladesh, where since from August, September, we could not do any work, which was the starting point actually after the monsoon. That was nothing related to our performance. It was Government of India has not allowed us to do the work because of the local condition, and it is valid for all the companies. The revenue, what was expected during the last quarter from Bangladesh, which was a big chunk, which we could not get. Otherwise, our revenue top line would have been at least INR 200 crore more. Then you could have seen the similar type of growth of 23%-24% quarter-to-quarter. Otherwise, bottom line is all okay and work in hand, today we have got INR 20,000 crore work in hand, and out of that, I think government is 50% and private is 42% and PSU 8%. This complex will little bit change going forward. As you know, our new promoter will like to do much more work, so there could be some inorganic growth as well. All these things have to see how it goes going forward. But there will be a lot of opportunity and a lot of improvement in the top and bottom line is expected going forward. Coming back to the project, Chennai Metro, Chitravathi, Project Varsha, and Sewar, all the big projects are going okay. The Bangalore Metro is large of completion, so nothing much to report about the project. The projects are all under control. That's all from my side, so I'll be happy to have questions from your end. Please go ahead. Thank you. Thank you. We will now begin the question answer session. Participants who wish to ask a question may press star and one on your touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We have the first question on the line of Aditi from CDEC Research. Please go ahead. Sir, hello. Yes. How do you think is your order pipeline getting influenced by depreciation of rupee? By depreciation of the rupee. I don't think that will affect much because as you must be knowing that our work is, presence is not on 10%-11%, and the depreciation of rupee is while pricing will take care of that for its portion. Going forward, I don't know. I don't think that will affect our order pipeline at all. Yeah. We don't expect any impact on the order flow because of the depreciation of the rupee. Okay. How much of your current order book comes from international markets? About 10% of the order book is from overseas markets. Okay. What sort of leap in project execution capabilities the company needs to take as it moves towards executing more than INR 10,000 crores of order book? Sorry, can you repeat the question, Aditi? What sort of leap in project execution capabilities the company needs to take as it moves towards executing more than INR 10,000 crores in any financial year? Yeah, already this year will be close to INR 10,000 crores, if not INR 10,000. So we have the capability to do INR 10,000 crores. In terms of execution capability, what we need, we need some CapEx involvement. Normally, we try to get it from the market because the plant and machinery we want to use, unless it is very specific, we can get it from the market. Manpower-wise, we are already there. Maybe some infusion required at bottom level. The labor force, of course, we have to get from the market, which will sometimes be the challenge. We don't see much of a challenge to grow in terms of the deliveries concerned. Okay, up to what level of project can the company execute with the current capability? It depends. There is no straight answer because the same setup can do 200 crore jobs, can do 1,500 crore jobs. You require a project manager, you require some following staff for both the type of project. If you ask me now, with this fall part, maybe we can go up to 13,000, 14,000 crores easily. Thereafter, we may require to increase some CapEx and manpower. Okay. What sort of operational excellency do you people now need, if at all, post exit of the foreign promoter? Well, technology is the key. Materially, we have to improve, and we are improving in many folds. We never did a pile of Just very technically, I am talking about 50/50 ton weight. We are doing now 300 ton each pile. We are using 1,500 ton of crane in floating condition. There are many things, technically, we are continuously upgrading ourselves. That is required also because timeline has shrunk. Earlier, we used to take more time. Government used to allow. Now the timeline has also shrunk, quality has improved. Technological advancement is going on. Apart from technological improvement, ITD is well-versed with all the excellencies which is required. Yes. Okay. Thank you. We have the next question on the line of Sri Gandhi from Mangal Keshav Financial Services. Please go ahead. Good afternoon, sir. My first question was regarding the acquisition of open offer. When do you expect the open offer to commence? My first question was that. Second question was, do you expect any main change post the acquisition? Is there any kind of main change going to happen for the company? This was my second question. Open offer depends upon certain- Two, three years. Clearances we are waiting for. Not we are waiting for, the seller and buyer they are waiting for, which will happen. It is a matter of, I would not say two months from now. Very soon. Very soon. One month it should come. Okay. Any main things you are expecting post the acquisition of the company? Immediately because there has been no discussion on that line. Okay. Hello. They will continue. Okay. Sir, my next question was regarding this time the results, what we have seen is EBITDA has come very flattish on year-on-year basis. What kind of operational challenges did you face because of EBITDA? At EBITDA level, even margins normally you have been maintaining over 10% margins, and this time you are coming here at 9.5% around. How do you see to improve it further? Well, I think this quarter to quarter, this mafia, we have to get out of that. Because some quarter will be good, some quarter will be very good. Some quarter will be average. In totality, we have to see. We don't see much of challenge because challenging jobs has been behind us now. Even Bangladesh also could have contributed a large chunk of margin, which was not done. I don't see that as a reflection of going forward. So you are confident of maintaining above 10% margin, which you have been maintaining over the years, right? Yeah, I think this should be. Yes. Okay. And sir, out of the total bid line of around INR 31 crores, which you had told us INR 12,000-INR 13,000 crores we had already submitted last quarter. For the submitted, how much when we expecting to finalize the order bid pipeline? Bid, we have already submitted around INR 15,000 crores, roughly, which is under various stages, either negotiation or L1 or just submitted. That will be another INR 15,000 crores tender we are working for, which will be submitted maybe Okay, sir. Thank you so much. Thank you. Thank you. We have the next question in line of Noel Vaz from Union Asset Management. Please go ahead. Yes, thank you for the opportunity. I just have one follow-up question just to clarify. The order inflow you have guided for FY 2025 is INR 9,000 crores? Yeah, I think around that INR 9,000 crores. Okay. Do we have any clarity for the next year, FY 2026? FY 2026, I cannot give a clarity, but it should be around INR 12,000, INR 13,000 crores order we should get next year. Okay, thank you. Just one point. You had mentioned something about inorganic growth opportunities. Could you just what would that look like for a company like us? Okay. If you have seen that we are in metro, we are in marine, we are in airports, we are in special job and then industrial structures, sub-building and irrigation water. We are mostly everywhere we are there. There are road also we are there, but there are few opportunities which may come once the new promoter comes. I will not be able to comment much of that. You have to guess. Let us see. There could be some element of the work we have to do, but the opportunity will be huge and good business as well. Yeah. Okay. But this will be more like JVs or this will be, what structure would it look like? Or it will be No, not JV. We have got to improve our capability. We have to induce some team. Those process will take some time. It is not that next month it is going to happen, maybe after seven, eight months time. But the opportunities are there, as we understand from the new promoter will be. It will be by in-house only. Just to clarify further, I think what we mean is getting into some certain segments that we probably don't have a presence today. I don't think we are talking about any inorganic growth or acquiring any other company, at least as of now. Okay. Thank you for that clarification. That is all from my side. Thank you. Thank you. We have the next question in line of Pratik Kothari from Unique PMS. Please go ahead. Yes. Hi, good afternoon, sir. To your last comment, just to confirm, when you mean inorganic, you mean you intend to enter new segments. This is not acquiring a company. Yes. That is it. Exactly. Okay. This would be what we had spoken about, sir, in the last call. Green hydrogen, data centers, the possibilities. What all is it that we currently don't do but potentially can do in the future? Exactly. I think you know as much as I know. Yeah. Correct. Fair enough. Sir, one on the international side. Just how are things progressing there? We wanted to build up a large part of our order book from there, especially in the Marine, Middle East, Africa, other regions. Just how are things panning out on the international side? It's the same, and it's quite good going on. We are expecting at least one order very soon from international, that is the marine segment. Another 2, 3 tenders already have submitted. We are hopeful that we may get one from there. We are maintaining the same sort of tempo in overseas market for marine segment is concerned. Correct. And sir, it has been about 3, 6 months since the new promoter has come in. Any conversations either with them or with clients, anything that you would like to highlight, positive, negative, anything? Well, definitely there have been some conversations. It has to be. The new promoters, they have got a huge internal planning to invest lot of money to have clean energy, to have many other things. Data centers and roads and whatnot. So those require infrastructure, those require a lot of construction and MEP activity. So huge opportunities are lying in front of us to do a lot of work with our Adani Group. Correct. Then, this 20%, 25% revenue guidance which you had given for 2, 3 years, this still holds, ex of Bangladesh also. Yes. We will continue to do whatever we are doing. For the new promoters, there will be some job overseas as well, not only India. Correct. Just to confirm, of this INR 20,000 crores, Bangladesh would be about INR 1,500 crores in the order book. That is all, yes. Correct. Thank you, and all the best, sir. Thank you. We have the next question on line of Jainam Jain from ICICI Securities. Please go ahead. Thank you for the opportunity. Sir, my first question is, what is your order pipeline currently? Order pipeline, as I just mentioned, that around INR 50,000 crores of worth of tender we have submitted, and we are lowest in around INR 800 crores. We are L1. Tender which is yet to be submitted will be another INR 15,000 crore roughly. Okay, sir. Can I just give us some details pertaining to inventory, trade receivables, unbilled revenue, mobilization advance, and trade payables? Yes, in terms of numbers, these outstanding, the net working capital is under 100 days. It is very much under control, and we are collecting money from our customers on a regular basis. Apart from contract to retention, which is held back by the customer, we are able to realize our money on time. So it is under 100 days, which I think is in par for the industry or maybe better than that. Okay. And sir, considering the order inflow guidance of INR 9,000 crore in this year, until now, we have made two-third of the guidance. So like, are you confident enough to meet this year's guidance, and any specific project, which you would like to highlight, which is giving us this confidence? We are confident. As I mentioned to you that we are already L1 in 800 crore jobs, so that is one. One job which we are more or less sure that we will get the LOI for many jobs, crores. And one job here and there, so more or less, we are okay with the INR 9,000 crore. Okay, sir. And, what is the project detail of the L1 project, I mean, the INR 800 crore project? One is that metro work in Bangalore. Which metro? That, we can discuss it separately, but INR 800 crore job, we are L1, so we are okay. All right. Okay, sir. That answers my question. Thank you so much, and all the best. Was that your last question, Janam? Yes. Thank you for the opportunity. Thank you. We have the next question from Aditya Sahu from HDFC Securities. Please go ahead. Hi. Thank you for the opportunity. Sorry to interrupt you, Aditya. I request you to kindly go off the speaker phone. Your audio is pretty low. All right. Am I audible right now? Yes. Sure. Just one small question over here. Of the big pipeline that we have, INR 15,000 crores, how much of that would be from the overseas markets? INR 2,500 crores, roughly. Understood, sir. Just one other question, on the CapEx front. What would be the CapEx that we have done till nine months FY 2025, and what are we planning to do for the remaining part of the year? CapEx, till nine months, we have done around- 100 INR 100 crores. Which is much less than what we had last year, apple to apple. Going forward, it will be how much? Maybe another INR 15, INR 20 crores maximum. So total CapEx this year will be INR 120, INR 125 crores at the max. Understood, sir. Thank you so much. Thank you. We have the next question on line of Neha Raichura from Abakkus Asset Manager. Please go ahead. Yeah. Thank you for the opportunity, sir. My question is on the Bangladesh project, sir. If you can just share some details on the issues that we have faced in Bangladesh. Last quarter, you had mentioned that it was because of the political tension. What exactly are the on-ground challenges that we are facing right now? Are there any difficulties or technical difficulties, and have they eased out or not? Well, up to a certain point, none of the Indian companies were allowed to do the work, start the work there because of, as you know, there are some turmoil. A few months back, maybe end of November or mid of November, it was cleared, and today we have mobilized all the people and the plant and machinery is getting mobilized there. Things are quite okay. Because of the delay in the mobilization, which was supposed to happen in month of September, October, which is happening now. There is a gap of 3 months lead time, which we have lost. Otherwise, today's scenario is okay, and we are able to do work there. No problem. Sure. Okay. Sir, in that sense, then how much revenues can we expect from this project, say, in this current quarter and then for FY 2025? Next year is okay. Hopefully, there will be no effect. This year, if you see this quarter 1, 2, and 3, we have INR 500 crores of revenue we have considered, where we have done only INR 150 crores. Okay. Even in the last quarter, INR 300 crore revenue was budgeted. We have done only INR 97 crore revenue. This year has been affected by Bangladesh. Sir, any job number for ROTE-526 that we can expect to do from this project? Number-wise, I have to see because that depends upon detail I have to find out. For total INR 1,500 crore job, we have to complete in 12, 13 months' time. Okay. Also, just my second question was on the other expenses. This quarter, if we see, they have significantly increased almost 26%, 27% up year-on-year, and even the debt levels have increased. Is this both because of this particular project, or are there some other reasons for these increases? No, it is nothing to do with any particular project. Overall, the scale of operations has gone up, and the other expenses need to be seen along with the material costs and the subcontracting costs. It just depends on the mix and the inputs that go into any project execution. It is not related to any single project. Okay. Just my last question on the opportunity size from the Vadhvan Port. I think the total opportunity size stands at almost about INR 170, INR 185 crores. Is that the right number? If you can give insight on what opportunities are we seeing from there. There are opportunities. I will not be able to comment on the number. But there are opportunities. We have already there secured the first package, so there will be another second or third package in the pipeline. We have to see when the tender comes. Okay. Thank you, sir. That's all from me, sir. Thank you. Thank you. We have the next in line, Devang Shah from HFC Mehta Investment. Please go ahead. Hello. Devang Shah, yes. Yeah. Good afternoon, sir. The way we are seeing the budget in which, once again, the emphasis is given for infra growth and the CapEx push has been given. Do you feel, next year also there will be a good allocation, whatever may be the public-private partnership and the segment in which predominantly you are into diversified. There is a huge scope and opportunity for you to also get some kind of bidding as far as tender is concerned, and chances of getting some kind of winner also. We may expect a significant order inflow also for next year because you already earlier commented around INR 12,000 crore to INR 13,000 crore. Sir, that could be a possibility, and it can increase also for next year as far as order inflow is concerned. It depends upon one stroke of luck, because if we get a single order of INR 5,000 crore, the INR 12,000 crore figure will be INR 17,000 crore. Whatever government investment will come next year, that will not affect much. But already whatever investment is there, that is quite a bit. Overseas market also, there are good opportunities. Middle East is opening very fast. Yes, next year should be good for all the infrastructure companies. Sir, just one question that, there is any kind of risk that you are pursuing as far as execution risks are concerned due to domestic and global kind of challenges? Domestic risk, whatever risk we had, we know the risk, so we can cater that. Of course, if you go to overseas market, if it is a new market, we have to assess the risk. Each country has got their different chemistry. Generically, it is very difficult to say. Like Bangladesh. We never expected this to happen. There is a political risk. Sri Lanka, which was supposed to be a very risky country in terms of economy, now it is doing very well. Things like that. It has to be assessed time to time. It's very dynamic situation. Okay. Sir, for next year, what kind of CapEx that you are projecting? Because for this year, you already mentioned around INR 120 crore. For next year, any kind of plans for CapEx? We really haven't had any plan because it depends upon. There are a few big jobs which may come in the way, and those require some new plant and machinery. We have not planned anything for next year. We'll try to keep it under control. But if we have to diversify to some new field, maybe CapEx has to be there. Really, I don't have an exact number now. Okay. Sir, one more question that, are you going to maintain the margin or there is a scope of any kind of improvement also? The EBITDA margin that is around 9%-10% range in which you are into. So by considering the fact you are now bidding new projects, so it is a margin lucrative. There is any scope of expansion of margin from here on, or it will remain stable? Actually, it is market-driven and segment-driven. Basically, the construction industry margin is around 9%, 10%, 11%. Some of the companies, those who go for different models, BOT and annuity, et cetera, they will differ. But we are purely EPC infrastructure company, so I don't see there will be much change unless we do something exceptional in a particular job. It is going to remain stable around 9.5%-10%. That we can expect? Yes. Okay. Thank you, sir. Thank you. We have the next question on the line from Parikshit Kandpal from HDFC Securities. Please go ahead. Yes, sir. First question was on the guidance. Did you say in the call that this year the revenue will be about INR 10,000 crores? Hello? Yes, sir. Can you hear me? Hello? I said it will be close to INR 10,000 crores. Yeah. Okay. And margin is about double digits. EBITDA margins. Yeah, it should be. Okay. Sir, next year you have guided for INR 10,000-INR 12,000 crores of inflows. Does it include the inflows coming in from the new promoter, or will that be over and above that? No, I think it's together. Okay, that will be together. What are the pending regulatory approvals required? I think you got CCI approval, and earlier ITD Cementation India Limited shareholders have approved this acquisition. What are the pending approvals required for this? Is RBI approval required before the open offer gets executed? If you can help us understand the pending regulatory requirement or approvals required for the open offer now. No, Parikshit, we don't need to take any approval from the RBI for this transaction. What is remaining now is largely the SEBI approval for the open offer and a few consents from the lenders. Once that is through, the transaction will go through. Do we expect to close this within the end of March 31? I mean, within this financial year, the open offer will get closed? Yeah. As of now, I think it will be safe to say that the transaction should get completed by March, by next month. Okay, sir. Sure. Those are my questions. Thank you. Thank you. We have the next question on the line from Vipin Kumar of Sumangal Investment. Please go ahead. Hi, sir. Thanks for the opportunity. We have various JVs with our current promoter, ITDC Thailand. What will happen to those JVs post their exit? Since those projects are almost completed, maybe in the next six months or so, Mumbai Metro, Kolkata Metro projects and one or two other projects will get completed, and there's no other work that is coming in those joint ventures. They were our key technology partners, so we were getting some technologies from them. What will happen to that part? See, we are with them for last close to 20 years. Because of them, we have started doing airports, underground metro. Once upon a time, they used to have 300 people working in India, which has come down to now only 30 people now. Technology, more or less, whatever we do, we don't require their support. More than that, we have an agreement that they'll keep on supporting us, whether they are in the board or not, technological support they will give. There's an agreement with us, Adani, and them. I don't see there is much of an issue on that. Will you be paying any royalty for that technological support, sir? That is to be seen, because that is between the two of the promoters. I will not be able to comment on that. But at least we have in principle agreement that technology support will be continued, if required. Last question, sir, your new promoters. Will we be getting orders from them on nomination basis, or there also we will have to compete via tender? Have you any discussions with your new promoters on this subject? Can you throw any light on this? I got you. So far as I know, it will be the process which has been followed. They will go for the tender, and based on that, the job will be awarded. On nomination basis only. No. They will go for tender, they will invite bid from all the bidders, and then they will take a decision based on the evaluation of the bid. Okay, sir. Thank you, and all the best. Thank you. Thank you. We have the next question on the line from Nishit Singhai, an individual investor. Please go ahead. Yes. Hi. Good afternoon, sir. Thank you for the opportunity. My question is on the Bangladesh front again. Are we expecting any revenue shortfall in the current quarter as well from the Bangladesh project? Current quarter, yes, because current quarter means January, February is almost gone. Yes. Actually, we were supposed to do piling from the month of November. That means this quarter, the full swing from January, February, March, full swing work should have been there. But the piling activity will start maybe end of this quarter, which is a major source of revenue. So there will be definitely the revenue will be affected in this quarter also. Okay. I believe the mobilization advance we were supposed to receive in the last quarter. Will that revenue be covered up in this quarter? No, we have already received the mobilization advance earlier this year, so there is nothing here more to be received on the Bangladesh project in terms of the mobilization advance. Okay. Basically, we are just at a 3-6 month delay. That is it. Else, things stay the same. Yes. Okay. Thank you. Thank you. We have the last question on the line from Mr. Sri Gandhi from Mangal Keshav Financial Services. Please go ahead. Yeah. Good afternoon, sir. Is there any project which is going on Dubai side? In Dubai, do you have any projects lined up? We are not executing any projects in Dubai as of now. No projects in Dubai. Okay. Thank you so much. Thank you. Thank you. That was the last question. I would now like to hand the conference call to the management for closing comments. Thank you everyone for joining us on this Q3 FY 2025 earnings call. We look forward to interacting with you again next quarter. Thank you once again. Thank you. Thank you. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us and you may now disconnect your lines.