Release Date: May 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ahluwalia Contracts (India) Ltd (BOM:532811, Financial) reported a significant increase in turnover and PAT for Q4 FY24, with a growth of 34.83% and 176.76% respectively compared to Q4 FY23.
- The company's EPS for Q4 FY24 increased to INR29.83 from INR10.78 in Q4 FY23, indicating strong earnings growth.
- The net order book stands at INR11,179.93 crores, providing a robust pipeline of projects to be executed over the next 2 to 2.5 years.
- Ahluwalia Contracts (India) Ltd (BOM:532811) is L1 in four projects amounting to INR3,914.28 crores, which are expected to be awarded soon.
- The company has a healthy order inflow of INR6,536.81 crores during FY24, showcasing strong business acquisition capabilities.
Negative Points
- The company's EBITDA margin for Q4 FY24 decreased to 8.96% from 12.77% in Q4 FY23, indicating a decline in operational efficiency.
- There was a slowdown in project execution due to impending elections and labor scarcity, impacting productivity and margins.
- Working capital days increased to 38 days from 25 days in the last quarter, primarily due to delays in fund receipts.
- High subcontracting charges were noted, which were about 2% higher than the last quarter, affecting overall cost management.
- The company faced payment issues in certain projects, particularly in Bihar, leading to slower execution and potential delays in project completion.
Q & A Highlights
Q: Sir, first is on the margin front. So, this quarter we have seen 9% EBITDA margin. In the last phone call, we were confident that we can do more than -- what we reported in the third quarter, that is 10.9%. So, any specific reason and now how do we see the margin for FY25 and possible for FY26?
A: Look, in the last quarter there has been -- in the last month of the year, the slowdown started on account of the impending elections. So, that has impacted. Plus, in March there was -- March and subsequently in April and May, there was a huge scarcity of labor. So, that has impacted our productivity. So, that has led to reduced margins while our turnover has grown, but it could have been more if the labor scarcity was not there. Going forward, what we had projected, what I had said in the last call, that FY25, the margins will grow up because the order book is healthy. And with the new government also coming in now, I think the pace of projects, even execution will pick up. And traditionally, come May, the labor also starts coming back. At the moment, we are operating at about 60% to 70% on our project side, so the last three months or so. So, all these things, when we take into account, these have impacted our margins. So, going forward, whatever guidance I had given for FY25 last time, we are confident it will be a double digit, more than 10%.
Q: And on the order inflow and revenue growth for FY25, '26, how now we are looking at?
A: 15% to 20%. And these orders, we are L1 in approximately INR4,000 crores worth of projects. These are four projects. So, I think this will also happen in June or July. We were only held up because of elections and the task. So, this should also happen. And going forward, the order pipeline is also healthy.
Q: So, additionally, apart from this INR3,949 crore L1, four projects, how much more are we looking at to bag in FY25?
A: Another INR2,500 crores to INR3,000 crores.
Q: Sir, can you help us with the status of the Chhatrapati Shivaji Maharaj Terminus redevelopment project in Mumbai? And what is the kind of execution you can expect in FY25 and FY26 from this particular project?
A: So, this project now is starting off now. There were certain issues with drawing approvals because there have been some changes from the initial tender drawing provided to us necessitated by the client's requirements and local authorities. So, all that is behind us now. So, we have broken ground and construction has begun. So, going forward, we are looking at -- in the rest of the year, we are looking at doing a turnover of about INR800 crores in this financial year, which is FY25. And in FY26, it will be to the tune of about INR1,200 crores.
Q: Are there any other slow-moving orders in the order book right now?
A: There are a couple of slow-moving orders in Bihar, which we expect -- which are nearing completion, actually. The last 30% in two medical colleges is left, which we feel that post-election, the pace will pick up. They are held up on account of funding issues.
Q: Sir, what about the Mumbai Civil Disposal Project? And how do you see the execution? Because in Q4, we have seen a strong execution. So, we expect the momentum to continue?
A: Yes, it will. The first quarter again of FY25, because of elections, as I mentioned earlier, may the results may be a little sluggish, but and then -- this is the monsoon season also. But FY25 overall should be good.
Q: Sir, my first question is on the margins again. So, you said that March there was a problem of labor and it still continues for, you think that it will continue even in May and June. So, we are also-- So, same way are we looking at Q1 being a month?
A: I did mention that. Yes.
Q: So, I mean, could it be worse than Q4?
A: Not only labor is one and then elections, of course.
Q: But can we go below 9% because in this quarter there was only one month impact and on Q1 we will have more impact on two months or maybe three months. So, can it go below 9% as well?
A: I do not think so. No.
Q: So, the bottom some 9% would be the bottom margin on which you recorded in Q4. Hello?
A: Yes. I said yes.
Q: My second question is on the settlement with Emaar MGF. So, how much is the total cash into expected from this transaction, from the settlement and how much you have realized in Q4?
A: (inaudible) Emaar MGF, that amount has been settled, INR218 crores, including GST and out of which we have shown this is INR194 cores, which is basically basic amount and this will attract 25.17% tax and become.
Q: (spoken in foreign language)
A: INR90 crores.
Q: Balance?
A: INR125 crores.
Q: (spoken in foreign language)
A: This is two transactions, basically August and January.
Q: August and January. Okay. And your total INR140 crores will come, your share overall, right?
A: Rest is basically INR128 crores.
Q: No, I am saying out of INR194 crores excluding the taxation, you will have realization of about INR140 crores total cash in for the company, right?
A: Yes.
Q: Okay. Got it. And just last thing, sir, you said the L1 is 4.-- Can you please again tell me what is
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
