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    CEMPRO

    CEMPRO
    Construction·13 Feb 2025
    Management Summary

    ITD Cementation reported a robust Q3 FY25 with an 11% YoY revenue growth to ₹2,250 crores and a similar PAT growth to ₹87 crores. The company secured ₹6,370 crores in new orders during 9M FY25, bringing its total order book to ₹20,000 crores, with a healthy net debt-to-equity ratio of 0.4x. However, the EBITDA margin for Q3 compressed to 9.5%, primarily due to significant delays and reduced work on the Bangladesh project, which also impacted revenue by an estimated ₹200 crores.

    Highlights

    5
    • Q3 FY25 Revenue grew 11% YoY to ₹2,250 crores.

    • 9M FY25 Revenue grew 21% YoY to ₹6,600 crores.

    • 9M FY25 PAT surged 41% YoY to ₹259 crores.

    • Secured ₹6,370 crores in new orders during 9M FY25, with an additional ₹800+ crores in L1 bids.

    • Maintained a healthy total order book of ₹20,000 crores and a net debt-to-equity ratio of 0.4x.

    Concerns

    3
    • Q3 FY25 EBITDA margin compressed to 9.5%, down from typical 10%+ levels.

    • Revenue was impacted by an estimated ₹200 crores in Q3 FY25 due to delays in the Bangladesh project.

    • Bangladesh project delays are expected to continue affecting revenue in Q4 FY25.

    What Changed2

    vs Q4 FY25

    Guidance items6 → 5 (-1)Risks discussed2 → 3 (+1)
    Key financials

    Metrics

    6

    Periods

    2

    Q3 FY25

    3
    • Revenue
      ₹2,250 Cr
      YoY+11%
    • EBITDA Margin
      9.5%
    • PAT
      ₹87 Cr
      YoY+11%

    9M FY25

    3
    • Revenue
      ₹6,600 Cr
      YoY+21%
    • EBITDA Margin
      9.9%
    • PAT
      ₹259 Cr
      YoY+41%

    Order Book

    high confidence

    Total Value

    ₹ 20,000 crores

    as of 2024-12-31

    quantified

    Composition

    Mix3 client types
    • Government50.0%
    • Private42.0%
    • PSU8.0%

    Share of order book by client type

    Pipeline

    L1 awaiting loa

    Tenders submitted and yet to be submitted

    Cancellations / Deferrals

    • deferred:Revenue impact due to Bangladesh project delays from August-September

    "Management is confident in achieving the FY25 order inflow target despite current challenges."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹125 crores

    Debt

    Debt disclosed

    Liquidity

    Liquidity disclosed

    Net working capital is under 100 days and is well under control.

    Guidance & targets

    5
    CategoryTargetPriority
    Order Inflow
    Order Inflow
    ₹9,000 crores
    High
    Order Inflow
    Order Inflow
    ₹12,000-13,000 crores
    Medium
    Revenue
    Revenue
    close to ₹10,000 crores
    High
    Profitability
    EBITDA Margin
    around 10%
    High
    Profitability
    EBITDA Margin
    around 9.5% to 10%
    High

    Bangladesh Project Execution & Revenue

    next quarter
    CurrentWork stopped Aug-Sep, resumed Nov-Dec, impacting Q3/Q4 revenue.
    TargetFull swing execution, positive revenue contribution.

    Why it matters

    Significant impact on current and future revenue and margins; recovery is key to overall performance.

    Current quarter, yes, because current quarter means January, February is almost gone. So we were supposed to do piling from the month of November... So there will be definitely -- the revenue will be affected even this quarter also.

    How to verify

    key_financials.metrics[label='Revenue (Q3 FY25)']

    Risks & concerns

    3
    RiskSeverity

    Bangladesh Project Delays

    Political turmoil led to work stoppage from August-September, impacting Q3 revenue by ₹200 crores and 9M revenue by ₹350 crores, with continued impact expected in Q4 FY25.Management acknowledged

    high

    EBITDA Margin Volatility

    Q3 margin of 9.5% was lower than the typical 10%+ due to project mix and Bangladesh project issues, though management expects stabilization.Management acknowledged

    medium

    Political Risks in Overseas Markets

    Experiences in Bangladesh and examples like Sri Lanka highlight the dynamic nature of political risks in overseas markets, requiring careful assessment for new ventures.Management acknowledged

    medium

    Q&A highlights

    8

    “I don't think that will affect much because as you must be knowing that our overseas presence is around 10% to 11%. And the depreciation of rupees, while pricing will take care of that forex portion. And going forward, I don't know. I don't see that will affect our order pipeline at all.”

    Clarifies that the company does not foresee significant impact on its order pipeline from currency fluctuations due to limited overseas exposure and pricing mechanisms.

    asked by Aditi

    3 min read6 chapters

    Detailed Narrative

    01

    Q3 FY25 Financial Performance Overview

    ITD Cementation reported a top-line of ₹2,250 crores for Q3 FY25, marking an 11% year-on-year growth compared to ₹2,017 crores in the prior year. Profit After Tax (PAT) also grew by 11% YoY to ₹87 crores. For the nine months ending December 2024, consolidated revenue reached ₹6,600 crores, a 21% YoY increase, with PAT surging 41% to ₹259 crores from ₹185 crores in the corresponding period last fiscal. The company maintained a healthy net debt-to-equity ratio of 0.4x.

    02

    Robust Order Book and Strong Pipeline

    The company's total work in hand stands at a robust ₹20,000 crores. During the first nine months of FY25, ITD Cementation secured new orders worth ₹6,370 crores and is L1 on additional orders exceeding ₹800 crores. The order book composition is diversified, with 50% from government projects, 42% from private clients, and 8% from PSUs. The bidding pipeline remains strong, with approximately ₹15,000 crores worth of tenders already submitted and another ₹15,000 crores yet to be submitted, including about ₹2,500 crores from overseas markets.

    03

    Impact of Bangladesh Project Delays on Revenue and Margins

    The Q3 FY25 revenue was significantly impacted by delays in the Bangladesh project, which could not commence work from August to September due to local political conditions. This resulted in an estimated revenue shortfall of ₹200 crores for the quarter. For the nine-month period, the project contributed only ₹150 crores against a budgeted ₹500 crores, leading to a ₹350 crore impact. These delays also contributed to the Q3 EBITDA margin compression to 9.5%, and management expects the revenue impact to continue into Q4 FY25.

    04

    Capital Expenditure and Debt Management

    For the first nine months of FY25, ITD Cementation incurred approximately ₹100 crores in capital expenditure. The full-year FY25 capex is projected to be in the range of ₹120-125 crores. Management indicated that future capex plans for FY26 are not yet finalized, as they will depend on securing large new projects that might require specific plant and machinery. The company continues to maintain a conservative financial position with a net debt-to-equity ratio of 0.4x, indicating a well-managed balance sheet.

    05

    Strategic Outlook and New Promoter's Influence

    With the impending finalization of the open offer, the new promoter is expected to drive significant opportunities. While there will be no immediate M&A activity, the company plans to pursue 'inorganic growth' by entering new segments such as green hydrogen, data centers, and other infrastructure areas where they currently lack a presence. Orders from the new promoter will follow the standard tender process, ensuring fair competition. The company is also actively pursuing international marine segment orders, with one expected soon and several tenders submitted.

    06

    Operational Capabilities and Technology Advancement

    ITD Cementation believes it possesses the necessary execution capabilities to handle an order book generating ₹13,000-14,000 crores in revenue annually without significant additional capex or manpower. The company is continuously upgrading its technical capabilities, moving from 50-60 tonnage piles to 300 tonnes per pile and utilizing 1,500-tonne cranes in floating conditions. This technological advancement is crucial for meeting shrinking project timelines and improving quality standards in the competitive infrastructure sector.

    This is an AI-generated summary of a publicly available earnings call transcript. It is for informational purposes only and does not constitute investment advice, a recommendation, or an endorsement. inve.money is not a SEBI-registered investment advisor. Please consult a qualified financial advisor before making any investment decisions.