Detailed Narrative
FY25 Performance and Growth Momentum
Bondada Engineering Limited reported robust financial performance for FY25, with revenue growing by 96% year-on-year to ₹1572 crores. This growth was accompanied by an impressive 150% increase in PAT. The company aims to sustain this growth momentum by strategically focusing on high-growth sectors and spaces, ensuring proper planning and execution to maximize shareholder value. Management emphasized their commitment to risk mitigation measures and continuous evaluation of new opportunities aligned with their capabilities.
Order Book and Future Revenue Visibility
The company currently holds a healthy order book exceeding ₹5000 crores. Management has set an ambitious target to grow this to ₹8000-8500 crores by March 2026. The RE segment, primarily solar EPC and O&M, constitutes a significant portion of the current order book, totaling ₹3589 crores (₹3300 crores EPC, ₹200 crores O&M). Solar EPC orders are expected to be executed within 10 to 18 months, while O&M contracts will run for 3-5 years post-COD.
Entry into Battery Energy Storage Systems (BESS)
Bondada Engineering has successfully emerged as L1 for its first battery energy storage system (BESS) project in Telangana, valued at ₹240 crores. This marks a new business segment for the company, with the BESS market projected to grow at a CAGR of 27% to $32 billion by 2030. The company aims to install 2 GW of BESS by 2030, with an estimated installation cost of ₹1.8-2 crores per MW for the CapEx model, generating rentals over 12 years.
Diversification into Indian Railways and Telecom
The company has expanded into the Indian Railways sector, securing an initial order of ₹228 crores from South-Central Railway and participating in tenders worth ₹600 crores for Kavach infra projects. The Indian Railways plans to spend ₹10,000 crores annually on safety projects, presenting a substantial long-term opportunity with better margins than solar EPC and telecom. In telecom, while 5G rollout in Tier 3 cities is slower, the company is actively pursuing large tenders, including a ₹6000 crore tower tender, and expects to maintain telecom's revenue contribution at around 30%.
Capital Management and Receivables
Bondada Engineering reported managing its working capital effectively, with a cash conversion cycle of approximately 75 days, which it aims to maintain. Receivables stood at ₹520 crores at the end of FY25, representing about 33% of turnover. Management clarified that a significant portion of these receivables, particularly from February and March deliveries (totaling ₹520 crores), are from cash-rich PSUs and are expected to be collected by June 2025. The company has also secured ₹125 crores in additional sanction from SBI to enhance its bank guarantee limits.
Strategic Initiatives and Product Business
The company is in advanced discussions to manage Microsoft data centers in Hyderabad, with an agreement expected within one to two months, potentially generating ₹70 lakhs per month for a 25 MW data center. The product business, including eco-build products, solar streetlights, and BLDC motors, grew by 35% to ₹218 crores in FY25 and is projected to maintain a 35-40% year-on-year growth until 2030. The recent acquisition of Speck Systems Limited was primarily for office expansion and assets, not for entering the defense sector or utilizing outdated product lines.