Capacit'e Infraprojects Limited — Q3 FY25 earnings call

Call held 14 Feb 2025

Management summary

Capacit'e Infraprojects reported strong Q3 and 9M FY25 results, with significant revenue and PAT growth, surpassing previous yearly PAT records. The company achieved substantial order inflows, reaching ₹2,579 crores for 9M FY25 and expects to exceed ₹3,000 crores for the full FY25. Despite a one-time GST expense impacting Q3 margins, management is confident in future execution acceleration and margin recovery, driven by a robust and diversified order book.

Highlights

  • 9M FY25 PAT of ₹151 crores, up 120% YoY, surpassing highest ever yearly PAT.

  • 9M FY25 Revenue from operations at ₹1,678 crores, up 26% YoY.

  • Order inflow for 9M FY25 (excluding MHADA) at ₹2,579 crores, with confidence to cross ₹3,000 crores for FY25 and ₹4,000 crores including MHADA.

  • EBITDA margin for 9M FY25 improved to 18.7% from 17.9% in 9M FY24.

  • EBIT margin for 9M FY25 improved to 14.6% from 12.1% in 9M FY24.

Concerns

  • Q3 FY25 operational margin partially impacted by a one-time expense of ₹12 crores related to differential GST rate for a public sector contract.

  • EBITDA margin for Q3 FY25 stood at 16.7%, lower than 18.5% in Q3 FY24 due to the one-time GST expense.

Key financials

2 periods

Q3 FY25

  • Revenue
    ₹590 Cr
    YoY +23%
  • EBITDA
    ₹101 Cr
    YoY +13.5%
  • EBITDA Margin
    16.7%
    YoY -9.7%
  • PAT
    ₹52 Cr
    YoY +73.3%

9M FY25

  • Revenue
    ₹1,678 Cr
    YoY +26%
  • EBITDA
    ₹318 Cr
    YoY +31%
  • EBITDA Margin
    18.7%
    YoY +4.5%
  • PAT
    ₹151 Cr
    YoY +120%

What they filed

Q1 FY27: revenue up 6.8%, net profit down 14.9% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue518 590 671 589 646 +25%675 +14%712 +6%629 +7%
EBITDA95 90 86 102 108 +14%108 +20%109 +27%99 −3%
Net profit45 52 53 47 51 +13%50 −4%45 −15%40 −15%
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

₹10,047 Cr

as of 2024-12-31 quantified

Inflow this quarter

₹1,120 Cr

Composition

Mix 2 client types
  • Public Sector 63%
  • Private Sector 37%

Share of order book by client type

Pipeline

L1 awaiting loa

L1 position in projects worth INR600 crores

The company is confident of surpassing its guided order book addition for FY25, entering a high-growth phase with a diversified order book from esteemed clients.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Aluminium form work
    However, it should be close to INR60 crores so far. Majority of that being aluminium form work.
  • Debt Debt disclosed
    FY '25, it will be at similar levels as what we are. The cash position, obviously, will improve further.
  • Liquidity Cash ₹80 Cr Unencumbered cash of ₹80 crores, fund-based limits of ₹190 crores (₹140 crores utilized), non-fund-based limits of ₹1,000 crores (₹700 crores utilized), and available bank guarantee/LC limits of ₹260 crores.
    The company is sitting with unencumbered cash of close to INR80 crores, apart from the fixed deposits, which are lying at the bank less margin for LCBG. The total fund-based limits for working capital are INR190 crores. Utilization is INR140 crores. The total non-fund-based limits are close to INR 1,000 crores within consortium, and the utilization is close to INR700 crores.

Guidance & targets

Order Inflow

  • Fresh Order Intake (FY25) Order Inflow · FY25 · High confidence ₹3,000 crores minimum (excluding MHADA)
    Further, we are in an L1 position in projects worth INR600 crores in private sector. And therefore, it should be by our conclusion that we will cross INR3,000 crores minimum as fresh order intake in the current financial year.

    — Rohit Katyal, Executive Chairman

  • Fresh Order Intake (FY25) including MHADA Order Inflow · FY25 · High confidence ₹4,000 crores
    Along with MHADA release of land in the current financial year, we will cross INR4,000 crores.

    — Rohit Katyal, Executive Chairman

  • Fresh Order Inflow (FY26) Order Inflow · FY26 · High confidence ₹4,000 crores
    So you can take that the next financial year, we have internally set a target of INR4,000 crores of new fresh order inflow, all right?

    — Rohit Katyal, Executive Chairman

Revenue Growth

  • Year-on-Year Growth Revenue Growth · next 2-3 years · High confidence 25-30%
    So with the order book, which we just informed you all, and with the execution, what we need to do and commit it to clients, obviously, we see a 25%, 30% growth year-on-year, if not more.

    — Rohit Katyal, Executive Chairman

EBITDA Margin

  • Overall EBITDA Margin EBITDA Margin · full year · High confidence 17.5% plus (approx. 18%)
    However, having said that, we have already guided that the company will be maintaining the overall guidance of 17.5% plus EBITDA, which is 18% approximately for the full year

    — Rohit Katyal, Executive Chairman

EBIT Margin

  • EBIT Margin Improvement EBIT Margin · full year · High confidence at least 200 basis points
    and it will be maintaining and growing the EBIT by at least 200 basis points over the corresponding period of the last financial year.

    — Rohit Katyal, Executive Chairman

CIDCO Billing

  • Monthly Billing CIDCO Billing · next financial year · High confidence ₹85 crores per month
    So CIDCO, we should be billing at least INR85 crores per month in the next financial year, if not more.

    — Rohit Katyal, Executive Chairman

MHADA Billing

  • Annual Billing at Capacity Level MHADA Billing · next financial year · High confidence ₹400 crores
    As far as MHADA is concerned, we have a target to bill about INR1,200 crores at the LLP level. So, we do see that about INR400 crores will be built at capacity level.

    — Rohit Katyal, Executive Chairman

Receivables

  • Receivables Days Improvement Receivables · current quarter · High confidence 15 days
    The total receivables as on Q3 '24-'25 stand at INR500 crores which is less than 90 days and should improve by about 15 days going forward in the current quarter.

    — Rohit Katyal, Executive Chairman

ECL Reversals

  • ECL Reversals ECL Reversals · next 5-6 quarters · High confidence ₹115-120 crores
    I cannot give a particular timeline. But as I told you, that we are looking over the next 5, 6 quarters for recovery of INR115 crores.

    — Rohit Katyal, Executive Chairman

Asset Monetization

  • Non-core Asset Sale Asset Monetization · current quarter · High confidence ₹50 crores at least
    But yes, I do expect upward of INR50 crores at least to happen in the current quarter.

    — Rohit Katyal, Executive Chairman

Net Debt

  • Net Debt Reduction Net Debt · FY26 · High confidence ₹100 crores
    You should see a fall of INR 100 crores in net debt.

    — Rohit Katyal, Executive Chairman

Execution

  • Q4 FY25 Execution Execution · Q4 FY25 · High confidence ₹700 crores
    So, we are confident we need to touch INR700 crores. We will do that.

    — Rohit Katyal, Executive Chairman

What to watch in Q4 FY25

Reversal of one-time GST expense

coming quarters
Current ₹12 crores expensed in Q3 FY25
Target Reversal of ₹12 crores

Why it matters

This reversal will improve EBITDA margins, bringing them back in line with guided levels.

We are confident that the industry representations on this matter will soon be addressed, and we should see the reversal in coming quarters.

Risks & concerns

  • One-time GST expense impacting Q3 margins

    medium

    A ₹12 crore expense for differential GST rate on a public sector contract impacted Q3 EBITDA margin, but management expects reversal in coming quarters.

    Management acknowledged

  • Ongoing litigations and ECL provisions

    medium

    The company has provided ₹210 crores for ECL, with ₹115-120 crores expected to be realized over the next 5-6 quarters, indicating ongoing efforts to recover dues.

    Management acknowledged

  • Real estate market and client selection

    low

    The company is selective in private sector projects, choosing clients with strong balance sheets to ensure cash flow and avoid payment issues.

    Management acknowledged

Q&A highlights

7 direct
High-rise construction segment growth strategy Direct
So super high-rise segment continues to be a very important part of our portfolio. The percentage may increase, decrease on the basis of new order wins. Just to keep you updated, we will be constructing along with joint venture with Tata projects at BDD 10 towers of 300 meters each.

Highlights the company's continued focus and expertise in high-rise projects, including a significant JV project, indicating future growth in this segment.

Asked by Ranodeep S.

Data center construction market strategy Direct
So in data centers, we have constructed about 11 data centers for Department of Telecommunications through BSNL. Another 2 at Udhampur and Kolkata are under construction, expected to be handed over by April. Apart from this, we have participated in a substantially large data center project, which includes the hardware part to some extent as well. And it's on EPC basis.

Reveals the company's experience and ongoing projects in the data center segment, positioning it for future opportunities in this high-growth area.

Asked by Ranodeep S.

One-time GST expense and its impact on Q3 EBITDA Direct
Yes, other construction expenses. So we would like to inform and I clarified during my opening remarks that this INR12 crores pertains to Bhagwati project of MCGM, where the GST when it increased from 12% to 18%, the 6% differential GST is yet to be reimbursed by the client. The legal standing on the subject is that the client has to pay. However, as a prudent measure, since it has been outstanding for quite some time, we have made provision for the same.

Clarifies the reason for the Q3 margin dip, attributing it to a specific one-time provision, and expresses confidence in its future reversal.

Asked by Rishi Kothari

Recovery of past litigations and ECL reversals Direct
So as I explained last time, over the next 4 to 5 quarters, you will see substantial reversals happening. That's what our understanding with the success what we have seen over the last 4, 5 quarters translates into.

Provides insight into potential future profit boosts from the reversal of provisions made for past litigations and bad debts.

Asked by Rishi Kothari

Working capital management and receivables Direct
So there is an improved shift from WIP to debtors, which will translate into higher receivables in the current quarter. And therefore, we should see the numbers of last March, which were close to excuse me. Working capital, please. Close to last March on a substantially higher revenue.

Addresses concerns about working capital, indicating an improvement in the conversion of WIP to debtors and a target to reduce receivable days.

Asked by Shreyans Mehta

Payment delays from government clients (CIDCO/MHADA) Direct
So Maharashtra state finances, we keep repeating quality of client is very important. CIDCO has its own source of funds. So, there is no delay in CIDCO. MHADA has its own source of fund, there is no delay in MHADA either.

Reassures investors about the payment reliability of key public sector clients like CIDCO and MHADA, distinguishing them from other state government entities.

Asked by Shreyans Mehta

Total receivables and their improvement target Direct
The total receivables as on Q3 '24-'25 stand at INR500 crores which is less than 90 days and should improve by about 15 days going forward in the current quarter.

Quantifies the current receivables and provides a clear target for improvement in the collection cycle.

Asked by Rajesh Jain

Promoter shareholding and potential buyback Partial
As far as buyback is concerned, no, at the moment, the company's cash flow do not permit any buyback. We will look at this in a couple of years from today. However, as far as promoter stake is concerned, we did add close to 31 lakh shares, which got converted last December -- last November, or December.

Clarifies the company's stance on buybacks (not feasible currently) but highlights recent promoter share acquisition, indicating confidence.

Asked by Rajesh Jain

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q3 and 9M FY25

Capacit'e Infraprojects reported robust financial results for Q3 and 9M FY25. For the nine months, revenue from operations grew 26% YoY to ₹1,678 crores, with PAT surging 120% to ₹151 crores, surpassing the company's highest ever yearly PAT. EBITDA margin for 9M FY25 improved to 18.7% from 17.9% in the prior year. Q3 FY25 saw revenue grow 23% YoY to ₹590 crores, and PAT increased 77% to ₹52 crores, despite a one-time GST expense impacting Q3 EBITDA margin to 16.7%.

Robust Order Book and Strong Inflow Outlook

The company's standalone order book stood at ₹10,047 crores as of December 31, 2024, with public sector projects accounting for 63%. Fresh order intake for 9M FY25 (excluding MHADA) was ₹2,579 crores, including a significant ₹1,120 crore NBCC project in Q3. Management is confident of exceeding ₹3,000 crores in order inflows for FY25 and anticipates crossing ₹4,000 crores including MHADA projects. For FY26, the company has set an internal target of ₹4,000 crores for new order inflows.

Strategic Focus on High-Rise and Data Centers

Capacit'e Infraprojects continues to prioritize the super high-rise segment, with upcoming projects including a joint venture with Tata Projects for 10 towers of 300 meters each. In the data center market, the company has completed 11 data centers for BSNL and has two more under construction, expected to be handed over by April. The company is actively bidding for large data center projects, including those with hardware components, and aims to be a strong contender in this growing sector.

Working Capital and Receivables Management

The company's total receivables as of Q3 FY25 were ₹500 crores, with a target to improve collection by 15 days in the current quarter. Management emphasized that there are no payment delays from key clients like CIDCO and MHADA, as they have their own funding sources. The company has provided ₹210 crores for ECL and expects to recover ₹115-120 crores over the next 5-6 quarters, with at least ₹50 crores from asset monetization anticipated in the current quarter.

Capital Structure and Debt Outlook

Capacit'e Infraprojects maintains a healthy liquidity position with ₹80 crores in unencumbered cash. Fund-based limits are ₹190 crores (₹140 crores utilized), and non-fund-based limits are ₹1,000 crores (₹700 crores utilized), leaving ₹260 crores in available bank guarantee and LC limits. While gross debt levels are expected to remain similar in FY25, net debt is projected to fall by ₹100 crores in FY26. The company's finance cost for 9M FY25 was ₹72 crores, expected to decrease as a percentage of top line.

Outlook and Growth Guidance

The company projects a revenue growth of 25% for FY25 and a minimum of 25-30% year-on-year growth for the next 2-3 years. EBITDA margin is guided to be 17.5% plus (approximately 18%) for the full year, with EBIT expected to improve by at least 200 basis points. The company aims for Q4 FY25 execution to touch ₹700 crores. Billing from CIDCO is expected to be at least ₹85 crores per month in FY26, and MHADA billing at capacity level is targeted at ₹400 crores annually.

This is an AI-generated summary of a publicly available earnings call transcript.
View original transcript

More Construction earnings calls