Ladies and gentlemen, good day and welcome to ITD Cementation Limited Q2 FY 2025 earnings conference call, hosted by ICICI Securities Limited. As a reminder, all participant 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 this conference call, please signal an operator by pressing * then 0 on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Nidhi Shah from ICICI Securities. Thank you, and over to you, ma'am.
Thank you, Nirav. Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q2 FY 2025 earnings call of ITD Cementation India Limited. Today we have with us from the management, Jayanta Basu, the Managing Director, Prasad Patwardhan, the CFO. We will begin with opening remarks from the management, followed by a Q&A. Thank you, and over to you, sir.
Good morning, everyone. This is Prasad Patwardhan, and thank you for joining us on this Q2 FY 2025 earnings con call. Before I begin, I would like to inform you that the discussion that we will have during this call may contain certain forward-looking statements about the company and its prospects, which are subject to several risks and uncertainties, and the actual results may differ materially from the statements that we make during the course of this call.
Let me first start with the financial performance for the quarter, and subsequently our MD, Mr. Basu, will take you through the operational performance of the company. We declared our results yesterday, and I am sure all of you would have had a chance to go through the results. The brief highlights of our performance in this quarter are as under. We have reported a total income of INR 1,991 crore, which represents a growth of 24% on a year-on-year basis. Our EBITDA margin at about INR 204 crore represents a growth of 18% on a year-on-year basis, and profit after tax of INR 72 crore in the quarter has shown a growth of about 34% on a year-on-year basis.
Looking at our half-yearly numbers, the total income at INR 4,372 crore represents a growth of 27% on a year-on-year basis. The EBITDA at INR 442 crore has grown by 27%, and profit after tax at INR 172 crore represents a growth of 63% on a year-on-year basis. Our balance sheet continues to have very low leverage, and the debt-to-equity ratio is about 0.4 x. During this six-month period, and thereafter in October as well, we have secured orders of about INR 3,850 crore so far. As part of my opening comments, this is all I will say as of now. I will now hand over to Mr. Basu for his comments, and then we will take your questions.
Prasad, thank you, and welcome to this con call for quarter two of 2024-2025 years. Our revenue this quarter is around INR 2,000 crores, which is almost 25% more than last year for similar quarter. This shows that we are growing. This quarter revenue is a little bit affected due to monsoon, and monsoon does not affect all kind of job, but the kind of job what we are doing in Ganga Expressway, the roadwork, we cannot do anything because roadwork is totally dependent on the good weathers. That has affected a little bit. At the same time, in general Bangladesh, we are working for one transmission line, and because of the political scenario, we could not do much during last quarter. That also has some effect on our revenue. Otherwise, it could have been a little bit more.
That is in terms of the work which has affected, otherwise progress in all the projects are okay, quite steady. Ganga Expressway, we have achieved around 50% progress so far. The balance work is now mostly out of the local issues. That means the earth work is almost getting completed, which is a key component of the roadwork. We will be less dependent on the local issue and balance top work so we can do.
We expect by June, July next year, the work will be completed substantially. Chennai Metro as well going okay. All the TBMs are running now. We have completed a substantial portion of tunnel income portion. So 40%, 41% progress we have achieved so far. Then another one, underground metro at Bangalore is verge of completion. Entire tunnel has been completed. So the finishing work is on progress.
Project Indian Navy, we are doing two jobs, one in east and one in west coast. Project one is a new one, is picking up quite well. Around 10% progress we have done so far. The other project in west coast, that is a seaward, is in verge of completion. A few other navy jobs like JMPT also almost done. Small jobs are under control. We are doing an varsity job in Colombo.
Progressing better than the budget, better than the target. So the existing jobs which we are doing are in good shape, and I hope that from next quarter it will be better than this quarter, which is a normal trend. We have seen that third quarter, fourth quarter is better than first and second quarter. Coming to the prospects, it is a similar type of what I have said last time.
We have got close to INR 30,000 crores of job on the pipeline in various stages. Some of the tenders, some tender is issued, some we have submitted the bid. So we expect that some good jobs we will be securing during last few months of this year to fulfill our target of work to be secured. That is all in long and short about the progress and the performance that we have. I will now keep it open for you to discuss. Any questions are all welcome. Thank you.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. Participants, you may press star and one to ask a question. The first question is from the line of Sunil Kothari from Unique PMS. Please go ahead.
Thank you, sir, for opportunity and.
Sunil, can I request you to talk a little louder, please?
Yeah. Sir, getting my voice?
Yes. Thank you.
Hello.
Yes, Sunil. Go ahead.
Hi, sir. Congratulations for good set of numbers. I just wanted to acknowledge one thing is, to Mr. Basu and your team, Mr. Patwardhan, during last almost 20, 25 years, after I think 2005, this is the moment where again, we are going to see our new owner. The way you have handled last three, four change in ownership and the way you navigated this company is a commendable job, sir. So congratulations for that.
My question, sir, is with now Adani being owner, with going to become a new owner, how you see the competitor? How competition or other players will be looking at Adani? Because JSW, now they both are in a similar type of business segment, ports and so many other things. How this change, can it affect our business getting from the JSW like players? Your thoughts will be really helpful.
One more thing on this new ownership. How you feel? How you see? I think I have heard Mr. Patwardhan on TV interview, today, Mr. Basu on TV interview, we feel positive about Adani's entry as a owner. Little bit combining these things, if you talk something more on.
Well, your first question was that how our other client will view this merger or acquisition. I do not see much on that because this is an independent listed company and will be working in a similar pattern what we are doing. Maybe it will be a little bit of more job for Adani. Otherwise, there should not be any problem because there are many instances like that. Larsen & Toubro, they have got L&T design, L&T-Ramboll, and many company like that.
That does not mean that they do not do work for others. This is purely professional business scenario. I do not think it will be affected. But let us see what happens. In terms of Adani, we have to do much more work than what we have been doing so far, including whatever work we are doing apart from Adani, that will remain, that will grow, and maybe we will be getting some more job from Adani. That is a positive sign. We have to enhance our capability. That much I can say at this moment.
Mm-hmm. Great. Sir, the second question is, looking at your last two, three year track record, the way we are performing, it seems that because of, say, little bit not order good inflow as you required. By 2023 end March, we were having order book of INR 22,000 crore. Now we are below INR 18,000 crore. And looking at the way you want to grow, maybe 15%, 20% for next two, three years, how challenging it will be for you to get as early as possible the orders, or will it hamper a year of maybe lower growth? How do you see next two, three years looking at order inflow, pipeline and your ambition to grow?
Yeah, I think that sometime the statistics are misleading because if you consider last year this time, our work value, working hand was little bit more than now. But what we used to do, we used to do our progress was less. Today, you can imagine a job of INR 5,000 crore, we are completing two and a half years. In earlier days, a job of INR 1,000 crore used to take four years time. So, the execution date has increased.
Obviously, it is because of the nature of the job and the pressure from the requirement of the client. So whatever job we get now, we do it fast. So we cannot compare with the last year or second last year, what was the order book and what was the revenue. Yes, we need some jobs, and as I have just mentioned that there are plenty of jobs in pipeline. We are not at all worried about that. We still maintain that 2025 assumption growth is possible.
Great, sir. Thank you and congratulations again. Wish you good luck.
Thank you. Participants , you may press star and one to ask a question. Next question is from the line of Dhananjay Mishra from Sunidhi Securities and Finance. Please go ahead.
Yes, sir. Congratulations on good set of numbers. Am I audible?
Yes, please.
Yeah. You talked about INR 30,000 crore of prospects. Out of this, how much bid are already submitted, and when do you see this bid will be finalized?
I think submitted already two to four plus one, five plus one, six plus one, seven, plus around 12, INR 30,000 crore bid already submitted, and remaining are on the stage of evaluation and being submitted. We are quite hopeful that whatever bid we have submitted, few of them we will get. I do not want to comment on the project as a number now. As I said, that end of the year, total job achievement for sure will be secured this year, that we are confident about that.
Okay. These all bid will finalize in this year itself, or it will go in next year also?
Some may spill over next year out of INR 30,000 crores. Most of them we hope by February, March will be finalized.
Are most of the bids in domestic market, are these prospects in overseas market also?
Yeah. If you see the ratio of around 25% out of this is from overseas market.
25%. Going forward, what will be our strategy in terms of sector and in terms of bidding strategy going forward? I mean, in terms of metro, marine job and all that.
As we have maintained, we will still maintain the same thing. We will focus more on the overseas business, particularly marine. If we are able to do marine little better successfully, then we will go to other segment as well. So far, that is the strategy. Internally also, we have enhanced our capability to do some more job in infrastructure development like airports or buildings or industrial structure. That is the second priority now, overseas and the infrastructure in India.
Okay. Lastly, on margin front, sir, this quarter margin is a little bit down. What will be the margin guidance for next year?
Yeah, I think that for convenient purpose, if you reduce this and that, then it is up to otherwise is 10% +.
Oh, so 10% + is doable going forward also?
Yes.
Okay. Thank you, and all the best.
Thank you.
Thank you. The next question is from the line of Noel Vaz from Union Asset Management. Please go ahead.
Yes, thank you for the opportunity. Just one question.
Noel, you are not audible.
Hello, can I be heard? Hello.
Yes.
You are audible now. Please go ahead.
Yeah, sorry about that. So, in the first half of this current financial year, we have seen working capital increase very dramatically compared to first half of the previous year. Is there some particular reason? I know receivables have increased and all, but is there anything else that there in the mix or something which is the response
Noel, again, we are not able to hear you. Can you please speak little louder?
Can you increase the volume?
Hello, can I be heard?
Yes, go ahead.
I think you said our working capital compared to last year and this year, isn't it?
Yes. Correct, sir.
What happened, it is not very uniform distribution. Sometimes you will find that at a time we have lot of working capital invested, and rest of the year, almost nothing. It depends upon the new job what we secure. We have secured some new building jobs where some more investment has been done. Prasad, am I correct?
Yeah, that is absolutely correct. The other reason is if you look at our March numbers, typically we see a lot of government clients releasing payments to us in the month of March. That is why the working capital in terms of number of days in March may be a little lower. This is nothing out of the ordinary, this is a normal course that we have seen this buildup of working capital as even the revenue and the execution also ramps up. There has been some increase in the working capital. As Mr. Basu said, it is all in control and it is in line with what we have covered planned.
Okay, understood. Does this also explain why the margins were a little bit low, or this is just because of a seasonal factor?
Margin, as I told you that one of the marine job in Bangladesh, which was supposed to be done, we could not do much because of the political issue. So revenue has affected and accordingly, margin also. Marine job is a normally margin fabric. That is one factor. Similarly, because of the monsoon, generally, progress and margin, that gets affected. That is what is the situation now.
Okay. Thank you. That's all from my side.
Thank you. Next question is from the line of Aditi from CD Equisearch . Please go ahead.
Good afternoon, sir. Sir, my question is, I was just curious to know that, do you have any plans of getting into T&D EPC or power sector related EPC?
Transmission and distribution EPC. No, we don't have any plan for that. Transition, sometimes we do the civil portion, as I said, that which involves the concrete structures for the purpose of transition business. There we are, in fact, Bangladesh, we are doing that. But as a whole system transition, we don't have any plans.
Okay. No plans in the near future or no plans at all?
So far there is no plan. Future, I can't say.
Okay. My next question is, how do you think that onboarding of Adani Group is going to impact ITD?
Definitely it will impact positively. That much I can say now.
Sir, can you please elaborate on this? What positive impacts can ITD business?
We haven't had any discussion with Adani so far because it is still in a stage of work in progress. Generally, perception is that they have got plenty of work and they have got their presence all over the world. Those things will help us to go more abroad, more overseas jobs and maybe diversification of our portfolio to certain segments. Those are the positive things we are perceiving now.
Okay. With the help of Adani Group, you are planning to secure more of international business, right?
Yes, that will help us to go internationally more because of their presence.
Not much impact will be seen in domestic market.
Yeah, domestic also, because they are also growing, so they require people. So we will be there with them. We also will grow with them.
Okay, sir. Thank you.
Thank you very much. Participants, you may press star and one to ask a question. Next question is from the line of Aditya Sahu from HDFC Securities. Please go ahead.
Hi, I hope I'm audible.
Aditya, can you hear us?
Yes. I hope you can hear me.
Aditya, we can barely hear you.
Can you speak a bit louder?
Sure. Sir, I just had a small question over here. I understand you have provided the EBITDA margin guidance of about 10%. Could you please help us on the revenue guidance part too? What sort of revenue are you looking at for 2025, 2026 in the near term?
2025, 2026, you can find, as I have mentioned before also, around 20% ± revenue should be.
The next two, three years, we can expect 20% of revenue growth happening?
Yeah, it will slightly taper down once we become big. 20% next year, maybe 15%, in that range.
Understood, sir. On the INR 30,000 crore order pipeline that you are planning, what is the annual orders you are expecting in the current financial year of this INR 30,000 crore to be received?
Maybe another INR 5,000 crore to INR 6,000 crore order we should book out of which.
Okay. More INR 5,000 crore, INR 6,000 crore of order we can expect in the second half of FY 2025?
Yes.
Understood, sir. That is it. I do not have any more questions.
Thank you. Next question is from the line of Abhishek Shah from Ambit Capital. Please go ahead.
Hi, good afternoon. Thank you for the opportunity. Just a couple of questions. Firstly, you touched upon briefly the Bangladesh marine order. Can you give some more color on what is pending in terms of revenue from Bangladesh and going forward, how you are thinking about it and whether the situation has improved? Second question was on CapEx. Can you just update on the guidance for current FY 2025 and FY 2026? Thank you.
Okay. Bangladesh, two months, we didn't do much because of the situation we all know, but we have been in close touch with the Indian Embassy and our similar fraternity people like USCOM, InCom and other companies, those who are working from India and Bangladesh. Now that things have been resolved, we have discussed with the embassy and discussed internally with the other companies, and all have moved, and as well we have also moved there.
So work has started. Mobilization already, at some other mobilization, which was not there, we have already mobilized that. Hopefully from December onwards, we will be able to start the work. As a local condition, so far we are okay. I mean, we don't see much of problem. So let us keep finger crossed. I think things should be okay going forward. Regarding your other CapEx issue, so far our CapEx is around INR 67 crores this year. Going forward, next year, we will be safe. I think the CapEx will be under control because whatever investment we have done last two years, we do not see that much investment coming year by year. Hello?
Okay, thank you. That is it from my end. Thank you.
Okay, thank you.
Thank you. Next question is from Nidhi Shah from ICICI Securities. Please go ahead. Nidhi, may I request an unmute so I may proceed with the question, please.
Hi, am I audible now?
Yes.
Thank you so much for taking my question. My first question would be on mobilization advance. How much do we have currently on books as mobilization advance?
As of September, we have about INR 1,300 crores.
INR 1,300 crores. Okay. Post the order book that you have mentioned for September ended, have we received any more L1s or orders in this quarter, in Q3?
We have received one order in October, about INR 1,600 crores plus GST.
All right. Are there any L1s that are pending to be awarded?
Sorry, can you come again?
Are there any L1s that are pending to be awarded?
No.
Okay. The INR 5,000 that you mentioned previously that we expect to book in H2, does the INR 1,600 form a part of it, or is it over and above the INR 1,600?
No, INR 1,600 is not part of that. That is beyond INR 1,600.
Okay. So over and above this, we expect another, say INR 5,000 crores.
Yes.
Now, some macro questions I wanted to ask in terms of Bangladesh. This order we saw issue with mobilization in the beginning, but now as you have said, the issues have been resolved. Do we think that there is appetite now in Bangladesh for more orders? Is that something that we can aspire to get international work from?
No, specifically for Bangladesh, we still want to see, watch and see how it goes coming months in reality. Though there are plenty of opportunities, we have to be careful moving on that.
In terms of other markets, are you seeing an unexpected slowdown or an unexpected pickup in speed in any of the international markets? Do you think that there are some key geographies where you would be able to secure orders in the next one to two years?
Yeah, I think the Middle East market has shown very good promises. Lot many things are happening there. You may be knowing that infrastructure and the township building, et c. I don't want to comment on everything, but at least Middle East market is going up.
All right. My absolute last question would be on the different sectors and segments that we operate in. Is there any segment that we are focusing on heavily or we would like to focus on in terms of what the market is giving us indications in orders?
Well, as a principle, we like to stick to the segments what we are working and do more job going abroad, increase the footprint, et c. But, we also can't keep away from the new segments like data center, like green energy and renewable energy. There are many new type of structures are going to come, even for the high-speed rail also going to be track laying. So those things, we are already talking to our various experts. Maybe someday you have to be there for this new segment.
These segments that you mentioned, data center, renewables and these segments, we currently do not have any orders from these segments, as I recall, right?
No. I don't think that we have much presence on that. Maybe little bit things we are doing, but in a big way, no.
All right. Thank you so much for taking my questions, and all the best for the rest of the year.
Thank you.
Thank you. Next question is from Ritesh Gandhi from Purnartha Investments. Please go ahead.
Yeah. Hello, sir. Am I audible?
Yes.
Yeah. Thank you for the chance. My question is relating to the manpower shortage we had witnessed in the industry. What was the progress during the quarter and moving forward the next half, what do we expect? Any shortage?
Yeah. Manpower, again, depends upon which segment we are working. But if you see the way we are working in Ranaghat Metro and the marine and some more specialized job, we basically require good machines, high-tech machines, and we require good operators, which is possible, which is under control. But there are some jobs, kind of job like building, where we require manpower. That's a bit of challenge to everybody in India. That is a regular challenge, and we are trying to manage that.
Do we expect any shortage moving forward?
Yeah, as I said that, typically labor-oriented job will always have some challenge. There's totally different sector, but we don't expect any effect for that because we are already working a continuous process.
Okay, sure. That's all from my side. I join back the queue.
Thank you. Participants, you may press star and one to ask a question. Next follow-up question is from Pratik Kothari from Unique PMS. Please go ahead.
Yes. Hi, good afternoon, and thank you. Sir, one question on the other income and also other expense. Just compared to Q1, both of them are higher, even though revenue is not. Anything to highlight there?
No, nothing really to highlight. In terms of other income, there were some equipment that we had purchased for some of our projects, for Chennai Metro and one or two others, which we have been able to sell off during this period. So that gain on sale is appearing in other income. In terms of other expenses, there is nothing unusual. All the expenses are in the ordinary course of business. So there is nothing unusual that you would like to highlight or point out over there.
Right. Fair. Sir, with now ITD not being a parent anymore or selling off this business, does any market or any segment kind of open up for us? Were there any restrictions earlier put in place that this geography or this segment we cannot do?
Not really. A long time back, we were not encouraged to go overseas market because ITD was already there, and ITD thought that India has got good market, why to go outside. That has been for last two years, that also has been removed. We are going overseas. For this case, I do not think there will be any effect on us. Whatever we are working, we work in India and we grow here.
Correct. Sir, last question on this new segments that we are thinking to enter or scale up there. Sir, do we have the technical capability in-house or are we developing that? Will we have to partner with someone?
See, for a company like us, engineering company, always research and development is a part of our journey. We always think about that. We have a team. But which segment will work, what will be the skill required, that needs to be assessed. Yes, we have the capability, and we have to enhance it as and when it is required.
Great. Sure. Thank you and all the best, sir.
Thank you.
Thank you very much. As there are no further questions, I will now hand the conference over to the management for closing comments.
Thank you very much for taking time out and being with us on this Q2 FY 2025 earnings call. We look forward to interacting with you again next quarter. Thank you very much.
Thank you very much. On behalf of ICICI Securities Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.