Capacit'e Infraprojects Limited — Q4 FY25 earnings call

Call held 27 May 2025

Management summary

Capacit'e Infraprojects reported a historic FY25 with PAT growing 69% to ₹204 crores and total income up 23% to ₹2,407 crores. The standalone order book reached ₹10,545 crores, supported by ₹2,823 crores in new orders. However, Q4 FY25 margins were impacted by a new policy deferring profit recognition on certain projects until 10% completion, and working capital saw an increase in trade receivables.

Highlights

  • FY25 PAT reached a historic high of ₹204 crores, growing 69% YoY from ₹120 crores in FY24.

  • FY25 Total Income grew 23% to ₹2,407 crores, demonstrating strong top-line growth.

  • Order book on a standalone basis stood at a robust ₹10,545 crores, providing strong revenue visibility.

  • Significant order inflow of ₹2,823 crores in FY25, indicating strong bidding activity and project wins.

  • Write-back of bad debts and interest totaling ₹12 crores contributed positively to other income in Q4 FY25.

Concerns

  • Q4 FY25 EBITDA margin declined to 16.9% from 19.8% in Q4 FY24, partly due to a new profit recognition policy.

  • Trade receivables increased significantly from ₹548 crores to ₹1,080 crores, impacting working capital.

  • An L1 government project worth ₹600-700 crores remains unawarded due to a change in the Maharashtra government.

Key financials

2 periods

Q4 FY25

  • Total Income
    ₹705 Cr
    YoY +16%
  • EBITDA
    ₹119 Cr
    YoY -1%
  • EBITDA Margin
    16.9%
  • PAT
    ₹53.1 Cr
    YoY +2%
  • PAT Margin
    7.5%

FY25

  • Total Income
    ₹2,407 Cr
    YoY +23%
  • EBITDA
    ₹437 Cr
    YoY +20%
  • EBITDA Margin
    18.2%
  • PAT
    ₹204 Cr
    YoY +69%
  • PAT Margin
    8.5%

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

₹10,545 Cr

as of 2025-03-31 quantified

Composition

Mix 2 client types
  • Public Sector 68%
  • Private Sector 32%

Share of order book by client type

Pipeline

L1 awaiting loa

L1 government project in Maharashtra

The company has entered a high-growth phase, supported by a diversified order book from esteemed clients across public and private sectors.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹60 Cr

    Previously planned ₹60 Cr

    So we had restricted our capex last year to under INR60 crores, I believe. And we would like to see a similar number in the current financial year, could be higher by about INR15 crores, INR20 crores. But yes, there will be an increase in the temporary structures because of sizable projects being added in the quarter 4 of last fiscal. site establishment is temporary structures, which are written off or amortized over the project life cycle up till 85% of the project.
  • Debt Gross ₹334 Cr · Net ₹120 Cr
    • Repayment Repayment made in April and May. ₹10 Cr
    So the debt level historically has been INR335 crores. That is where we would ideally like it to see. There is a temporary blip of increase because of new projects starting. However, out of that INR10 crores repayment has already happened on a net basis in April and May. And these repayments will continue. So we do look that by the end of the year, we should be again on gross level of INR334 crores, but the net level will substantially fall because we carry approximately INR65 crores to INR90 crores of free cash on our books. So on a net basis, if your debt level is close to INR195 crores today, we ideally would like to see that at about INR120 crores to INR125 crores.
  • Liquidity Cash ₹65 Cr · Undrawn ₹150 Cr INR 260 crores of further limits (BG and LC) expected to be tied up over the next quarter. Cost of debt expected to be stagnant or lower in FY26 due to reduced commissions on bank guarantees post investment grade rating.
    So for the current financial year, State Bank of India has already assessed us. And while we have INR150 crores of unutilized BG limits available with us and LC limits, commensurating with the requirement what we have, we do believe that INR260 crores of further limits will get tied up over the next 1 quarter. We don't see any challenge on that. And with the results out, obviously, we'll be approaching for the rating agencies as well so that the finance costs can be reduced. What is interesting is after having gone into the investment grade, all the banks have reduced the rate of interest. And the rate of interest is not very interesting. What is important is that they have reduced the commissions on the bank guarantee and the full impact will be visible from quarter 2 of the current financial year, hopefully. Okay. So ideally your finance cost should be stagnant or lower in FY '26, right? That's what you have seen in FY '25.

Guidance & targets

Revenue

  • Revenue Growth Revenue · year-on-year (Vision 2028) · High confidence 25%
    We have set Vision 2028, where we have targeted revenue growth of 25% year-on-year, maintaining healthy EBITDA margins and improving on working capital.

    — Rohit Katyal

Profitability

  • EBITDA Margin Profitability · full year · High confidence 17-17.5%
    You see, we have always maintained a guidance of close to 17% to 17.5% for the full year basis. We continue to do better.

    — Rohit Katyal

Order Inflow

  • Order Inflow Order Inflow · FY26 · Medium confidence ₹3,500 crores
    Answering your question, the order intake, committed order intake for the current financial year will be INR3,500 crores. Our internal targets will be higher. That can be left to another day once we cross this INR3,500.

    — Rohit Katyal

Debt

  • Net Debt Debt · by year-end · High confidence ₹120-125 crores

    From ₹195 crores today

    So on a net basis, if your debt level is close to INR195 crores today, we ideally would like to see that at about INR120 crores to INR125 crores.

    — Rohit Katyal

Profit Recognition Policy

  • Profit Recognition Threshold Profit Recognition Policy · ongoing · High confidence 10% contract execution
    the company has made a policy of not recognizing profits on the projects until 10% of the contract is executed.

    — Rohit Katyal

What to watch in Q1 FY26

EBITDA Margin recovery post new accounting policy

next quarter (Q1 FY26) and Q2 FY26
Current 16.9% in Q4 FY25 (impacted by new policy)
Target Closer to 17-17.5% full year guidance

Why it matters

To assess the true underlying operational profitability as profit recognition begins for new projects.

So it's only prudent that for entire design build projects, the profit is only recognized once 10% of the contract is completed. At the moment, for these three projects, no profitability has been recognized in Q4 of last fiscal.

Risks & concerns

  • Impact of new profit recognition policy on reported margins

    medium

    New policy defers profit recognition on projects until 10% completion, impacting Q4 FY25 EBITDA margin by ~2% and FY25 by ~1%.

    Management acknowledged

  • Increase in trade receivables and working capital

    medium

    Trade receivables doubled from ₹548 crores to ₹1,080 crores, though management views this as a positive shift from WIP to debtors, expecting correction in 2-3 quarters.

    Analyst acknowledged

  • Labor availability and wage inflation

    medium

    Labor availability and qualified workmen are an industry-wide challenge, which the company is actively trying to resolve.

    Management acknowledged

  • Delay in awarding L1 government project

    low

    An L1 project worth ₹600-700 crores has not been awarded due to a change in the Maharashtra government, though the company's overall order inflow has not suffered.

    Management acknowledged

Q&A highlights

6 direct
Impact of new profit recognition policy on Q4 EBITDA margin Direct
the company has stopped recognizing profit till 10% of the contract value for new projects, which started in Q4 of last fiscal is completed. This includes NBCC. This includes Signature Global and this includes Maldives project.

Clarified the reason for Q4 margin compression and explained the new accounting policy for EPC projects.

Asked by Nirvana Laha

Increase in trade receivables and working capital Direct
the positive movement after now 8 quarters, what you are seeing is the movement from WIP under contract assets to debtors, both certified and uncertified. So we believe that over the next 3 quarters, the debtors at absolute level will fall.

Addressed concerns about rising receivables, explaining it as a positive shift from WIP to debtors and projecting a reduction in the coming quarters.

Asked by Nirvana Laha

FY26 revenue growth guidance (15% vs 25%) Partial
No, no. I just gave you an example, sir. The guidance remains at 25%, all right.

Reaffirmed the 25% revenue growth guidance for FY26, clarifying a previous example was not a revised target.

Asked by Nirvana Laha

Clarification on new accounting policy for profit recognition Direct
So as a percentage completion, when you incur a cost of, let us say, INR100 and your site contribution is or profit margin on gross is 15%, the sale automatically becomes INR115. This 15% will not be recognized, only the cost actual incurred and the actual billing done will be recognized.

Provided a clear example of how revenue and cost are recognized, but profit is deferred under the new policy until 10% completion.

Asked by Rishi Kothari

Timeline for profit recognition on new projects (Maldives, NBCC, Signature Global) Direct
In Maldives from the current quarter for NBCC from quarter 2 and onwards, and even for Signature Global, because there are two phases in Signature Global, for Phase 1, we should start recognizing profit from quarter 2 and Phase 2, we will start recognizing profit from quarter 4.

Gave specific timelines for when profit recognition would begin for key new projects, providing clarity on future margin recovery.

Asked by Dhananjay Mishra

Change in statutory auditor Direct
There's no rationale. We are required under law to change the stat auditor after 10 years. We are thankful to EY Associate for having supported the organization and guided us for the last 10 years. And that's the only reason. There's no other reason.

Clarified that the auditor change was due to regulatory requirements (10-year rotation) and not any specific issue.

Asked by Pradyumna Laddha

Status of L1 government project in Maharashtra Direct
So that project still has not been awarded and is the cold story, let me put it that way. There has been a change in the government. And fortunately, or unfortunately, you may put the government of Maharashtra is trying to correct its finances.

Revealed that a previously L1 project worth ₹600-700 crores is stalled due to state government changes, impacting potential order book conversion.

Asked by Mukul Verma

3 min read 6 chapters

Detailed narrative

Strong FY25 Performance Despite Q4 Margin Impact

Capacit'e Infraprojects delivered a historic performance in FY25, with total income growing 23% to ₹2,407 crores and PAT surging 69% to ₹204 crores. This success is attributed to prudent financial management and strong execution. However, Q4 FY25 saw a dip in EBITDA margin to 16.9% from 19.8% in Q4 FY24. This was primarily due to a new accounting policy implemented in Q4, where profit recognition on certain large EPC projects (NBCC, Maldives, Signature Global) is deferred until 10% of the contract is executed.

Robust Order Book and Inflow

The company secured ₹2,823 crores in new orders during FY25, contributing to a standalone order book of ₹10,545 crores as of March 31, 2025. The order book is diversified, with 68% from the public sector and 32% from the private sector. Management expressed confidence in continued growth, targeting a 25% year-on-year revenue increase as part of their Vision 2028. An internal target of ₹3,500 crores for order inflow has been set for FY26.

Working Capital Dynamics and Debt Reduction Targets

Trade receivables significantly increased from ₹548 crores to ₹1,080 crores, which management explained as a positive shift from Work-in-Progress (WIP) to certified debtors. They anticipate a reduction of ₹200-250 crores in debtors over the next 2-3 quarters. The company aims to reduce its net debt from the current ₹195 crores to ₹120-125 crores by the end of the year. Gross debt is expected to be around ₹334 crores by year-end, with ₹10 crores already repaid in April/May.

Project Updates and Execution Outlook

Work on MHADA projects is progressing, with 16 rehab buildings ongoing and 6 more starting in June. Two buildings are slated for delivery by June 10, and approval for 6 residential towers (90 stories each) has been received. CIDCO projects are also advancing, with two locations to be delivered by July and the remaining four by December 2026. Profit recognition for Maldives projects will start in Q1 FY26, for NBCC and Signature Global Phase 1 in Q2 FY26, and for Signature Global Phase 2 in Q4 FY26, aligning with the new accounting policy.

Capital Expenditure and Liquidity

Capex for the current financial year is expected to be similar to last year's under ₹60 crores, possibly increasing by ₹15-20 crores. However, there will be an additional ₹140 crores for temporary structures related to new projects. The company maintains healthy liquidity with ₹65-90 crores of free cash on its books and ₹150 crores in unutilized bank guarantee limits. Further limits of ₹260 crores are expected to be tied up in the next quarter. The cost of debt is anticipated to be stagnant or lower in FY26 due to reduced commissions on bank guarantees following the investment grade rating.

Other Income and Auditor Change

Q4 FY25 other income of ₹36 crores included a ₹12 crore write-back of bad debts and interest, along with ₹24.08 crores from scrap sales, fixed deposit interest, and reversal of excess provisions. This boosted Q4 EBITDA by approximately 2% and full-year EBITDA by 1%. The change in statutory auditor was confirmed to be a mandatory regulatory requirement after 10 years, with no other underlying reason.

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

More Construction earnings calls