AVP Infracon — Q4 FY25 earnings call

Call held 2 May 2025

Management summary

AVP Infracon Limited reported robust financial performance for FY25, with significant year-on-year growth in both standalone and consolidated revenue and net profit. The company outlined aggressive revenue targets for the coming years, supported by a strong order book and strategic expansion into new geographies and the private sector. Management addressed concerns regarding working capital and debt, explaining them as strategic decisions for operational efficiency and growth, while also indicating plans for increased transparency through potential quarterly reporting.

Highlights

  • Standalone Revenue for FY25 grew 80.43% YoY to ₹272.45 crores.

  • Standalone Net Profit for FY25 increased 80.97% YoY to ₹33.10 crores, with an EPS of ₹13.25.

  • Consolidated Revenue for FY25 rose 82.02% YoY to ₹292.81 crores, and Consolidated EBITDA reached ₹62.77 crores.

  • Current order book exceeds ₹400 crores, providing strong revenue visibility.

  • Ambitious revenue guidance of ₹500+ crores for FY26, ₹750-800 crores for FY27, and ₹1,000 crores within two years.

  • Strategic focus on cost efficiency, technology upgrades, and backward integration (RMC plants, blue metal crushers, own fleet) to maintain profitability.

Concerns

  • Working capital trends showed significant jumps in short-term loans and advances, and other current assets, raising analyst questions.

  • Debt level was perceived as 'huge currently' by an analyst, with a debt-equity ratio of 1.30.

  • Cash flow from operating activity was negative for FY25, primarily due to timely payments to suppliers.

Key financials

  1. Revenue (Standalone) ₹272.45 Cr +80.4%YoY
  2. Net Profit (Standalone) ₹33.1 Cr +81%YoY
  3. EPS (Standalone) ₹13.25
  4. Revenue (Consolidated) ₹292.81 Cr +82%YoY
  5. EBITDA (Consolidated) ₹62.77 Cr

What they filed

Q4 FY26: revenue up 159.1%, net profit up 72.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue63 88 96 177 193 +206%228 +159%
EBITDA13 19 22 33 42 +223%35 +84%
Net profit7 11 13 20 23 +229%19 +73%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹400 Cr

as of 2025-03-31 quantified

Execution

Order book substantially enough to cover the next half year.

Composition

Mix 2 segments
  • Roads 90%
  • Other lines (drains, steel supply) 10%

Share of order book by segment

Pipeline

other

Expecting INR 700-800 crores of new orders in FY26, with many tenders lined up.

The company has an order book exceeding INR 400 crores and is confident in acquiring new works from many lined-up tenders.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹15 Cr
    Yeah, we are planning to invest around INR15 crores to INR20 crores based upon the project, but our top maximum utilization in capex will be INR20 crores.
  • Debt Debt disclosed
    • New borrowing Taken short-term loans or overdrafts at a lower interest rate to maintain cost efficiency and ensure timely payments to suppliers.
    short term loans and advances, which have jumped by INR28 crores, Y-o-Y, from INR17.8 crores... CC limit that we have gone up to INR112-odd crores. And the long term has also gone up a little bit.
  • Liquidity Cash ₹15 Cr ₹15 crores of capex money is still in Fixed Deposit from IPO time. Operating cash flow is negative due to timely supplier payments, but expected to be positive next year.
    INR15 crores of our capex money is still in FD, right, from IPO time... our cash flow from operating activity, the main reason why it's negative, as you can see, is because we are paying the supplier on time... Most probably by next year, it should be positive.

Guidance & targets

Revenue

  • Revenue Target Revenue · FY26 · High confidence ₹500+ crores
    Looking ahead, we remain confident in our ability to scale further and are working towards achieving INR500 plus crore revenue in the coming year with a substantial order book in the medium term.

    — Prasanna D.

  • Revenue Target Revenue · FY27 · High confidence ₹750-800 crores
    We are planning 500 this year and the next year we are at least planning INR750 crores to INR800 crores.

    — Prasanna D.

  • Revenue Target Revenue · FY27 · Medium confidence ₹1,000 crores
    So maybe around in a two years down the track, we are expecting around INR1,000 crores, four-figure number.

    — Prasanna D.

  • Solar EPC Revenue Revenue · FY26 · High confidence ₹75-100 crores
    Sir, we are targeting a INR75 crores to INR100 crores revenue minimum of solar in the largest segment

    — Prasanna D.

Profitability

  • PAT Percentage Profitability · FY26 · High confidence Maintain same as FY25
    Definitely. So, definitely we are maintaining. We want to maintain that.

    — Prasanna D.

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence Maintain around 21%
    And so, the margins, we will strive to maintain those as well. This is a good base to assume around 21%.

    — Prasanna D.

Order Inflow

  • Order Inflow Target Order Inflow · FY26 · High confidence ₹700-800 crores
    we are expecting around INR700 crores to INR800 crores of orders to be received in this financial year

    — Prasanna D.

Market Share

  • Revenue from Other States Market Share · A year down the line · Medium confidence 25-30%
    a year down the lane, we are expecting at least 25% to 30% of the revenue from other states.

    — Prasanna D.

Capex

  • Capex Plan Capex · FY26 · High confidence ₹15-20 crores (max ₹20 crores)
    we are planning to invest around INR15 crores to INR20 crores based upon the project, but our top maximum utilization in capex will be INR20 crores.

    — Prasanna D.

Market context

  • Operating Cash Flow Liquidity · Next year (FY26) · Medium confidence Positive
    Most probably by next year, it should be positive.

    — Priyanka Singh

What to watch in Q1 FY26

Order Inflow for FY26

Next quarter (Q1 FY26)
Current Targeting ₹700-800 crores
Target Progress towards ₹700-800 crores

Why it matters

Order inflow is crucial for revenue visibility and execution pace in the construction sector.

we are expecting around INR700 crores to INR800 crores of orders to be received in this financial year

Risks & concerns

  • Working Capital Management with Growth

    medium

    Analyst noted significant jumps in short-term loans and advances, and other current assets. Management explained these as strategic to secure lower interest rates and ensure timely payments to suppliers, which helps project execution.

    Analyst acknowledged

  • Debt Levels

    medium

    An analyst mentioned the 'debt level is huge currently' and debt-equity ratio of 1.30. Management clarified that increased debt is primarily for working capital (CC limit) and equipment loans to support growth, and they are maintaining margins.

    Analyst acknowledged

  • Negative Operating Cash Flow

    low

    Analyst noted negative CFO for FY25. Management explained it's due to timely payments to suppliers, a strategic decision to maintain good relationships and ensure smooth raw material availability, and expects it to be positive next year.

    Analyst acknowledged

Q&A highlights

8 direct
Updates on large orders bid for Direct
We are in the process of the tender opening for the recent bids we have bidded, sir, which we dated during the last call. It is in the process. Technical bid has been open and we are waiting for the commercial bids on the latest tenders we have submitted. We can expect any time the tender opening process to be concluded.

Provides an update on the bidding pipeline and future order book potential, indicating near-term catalysts.

Asked by Prateek Chaudhary

Geographic diversification and revenue share from other states Direct
The revenue is entirely from Tamil Nadu as of now. We are targeting to explore other states. Across states, we are down, a year down the lane, we are expecting at least 25% to 30% of the revenue from other states.

Highlights the company's strategy for geographic diversification and its potential impact on future revenue mix, reducing concentration risk.

Asked by Prateek Chaudhary

Potential margin dilution from entering newer states Direct
Just by lowering the price, bagging orders very, very, very easy. We are trying to maintain that PAT percentage what we are maintaining till date. So, we are bidding very conservatively or else we would have got a handful of orders from other states by now.

Addresses concerns about margin pressure from expansion and reiterates management's commitment to maintaining profitability through conservative bidding.

Asked by Prateek Chaudhary

Changes in working capital trends and balance sheet items (short-term loans, advances) Direct
So, what we have thought and implemented in this year is, we have taken some short-term loans or overdrafts at a lower interest, which will definitely be available at a cheaper cost than what we are paying for a creditor at a higher credit rate.

Explains the strategic rationale behind changes in working capital and debt, linking it to cost efficiency, timely payments to suppliers, and improved project execution.

Asked by Agastya Dave

Debt level and working capital requirement for future growth Direct
So, since we are targeting a INR500 crores turnover, we do need working capital in the form of, again, like a CC limit and all.

Clarifies that increased debt is primarily for working capital (CC limit) and equipment loans to support the company's ambitious growth targets, particularly the ₹500 crore revenue target.

Asked by Kaushal Sharma

Negative cash flow from operating activity Direct
First of all, our cash flow from operating activity, the main reason why it's negative, as you can see, is because we are paying the supplier on time.

Explains the reason for negative CFO as a strategic choice to maintain good supplier relationships and ensure smooth raw material availability, rather than a liquidity issue.

Asked by Paras Chedda

Request for quarterly results reporting and concalls Direct
We are also on the cards of forward thinking about this. We are just working on it. We will definitely let you people know that if there is a plan getting on track. And, yes, we have to go quarterly as we have just two more years to get onto the main boards and we are working, we are planning about this quarterly and Ind_AS accounting systems also.

Indicates management's consideration for improved transparency and investor engagement through more frequent reporting.

Asked by Agastya Dave

Split of orders between government and private players Direct
We are doing 100% government orders till now. And any back to back works is also towards government only. And we have started targeting private players and public sector units also.

Reveals the current client base and the strategic shift towards private sector projects for future growth and diversification, which could impact revenue mix and risk profile.

Asked by Abhishek Kumar

3 min read 7 chapters

Detailed narrative

Strong Financial Performance in FY25

AVP Infracon Limited delivered its strongest financial results to date for FY25. Standalone revenue grew by 80.43% year-on-year to ₹272.45 crores, with net profit increasing by 80.97% to ₹33.10 crores, resulting in an EPS of ₹13.25. On a consolidated basis, revenue rose 82.02% to ₹292.81 crores, and EBITDA reached ₹62.77 crores, reflecting significant scalability and operational discipline.

Ambitious Revenue and Order Inflow Targets

The company has set ambitious growth targets, aiming for ₹500+ crores in revenue for FY26, ₹750-800 crores for FY27, and a four-figure number of ₹1,000 crores within two years. To support this, AVP Infracon expects to receive new orders worth ₹700-800 crores in FY26, building on its current order book exceeding ₹400 crores. Management is confident in acquiring new works from many lined-up tenders.

Strategic Geographic Diversification and Private Sector Focus

Currently, all revenue is derived from Tamil Nadu, but the company is actively pursuing geographic expansion. It targets 25-30% of its revenue from other states within a year, with clarity expected by the end of H1 FY26. Additionally, AVP Infracon, which historically focused 100% on government orders, is now strategically targeting private players and public sector units, with plans for major private sector orders in the next year across various infrastructure segments.

Working Capital Management and Debt Strategy

Management addressed analyst concerns regarding increased short-term loans and advances, explaining these as strategic decisions to secure lower interest rates and ensure timely payments to suppliers. This approach aims to maintain cost efficiency and reduce project delays. While the debt-equity ratio is around 1.30 and the CC limit has risen to ₹112 crores, the company asserts that this debt is necessary for working capital to support its growth trajectory and that PAT margins will be maintained.

Entry into Solar EPC Segment and Capex Plans

AVP Infracon has recently entered the Solar EPC segment, targeting ₹75-100 crores in revenue from this new vertical for FY26. The company plans a capex of ₹15-20 crores for FY26, with a maximum utilization of ₹20 crores, deployed based on project requirements rather than a fixed budget. This capex is intended to support project execution and expansion, with ₹15 crores of capex money still held in FD from the IPO.

Commitment to Profitability and Operational Efficiency

The company is committed to maintaining its PAT percentage and EBITDA margin, targeting around 21% for FY26. This is achieved through a focus on cost efficiency, upgrading technology, and backward integration via in-house RMC plants, blue metal crushers, and an owned fleet of vehicles. Management emphasized conservative bidding to maintain profitability even when expanding into new states, ensuring that the desired profit percentage is retained.

Future Transparency Initiatives

In response to analyst requests, management indicated that they are actively considering and working towards reporting quarterly results. This move aims to enhance transparency and investor engagement, aligning with their plans to transition to main boards and adopt Ind_AS accounting systems. They expect to provide updates on this plan as it progresses, acknowledging the current six-month reporting gap.

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