Dhruv Consultancy Services Limited — Q4 FY25 earnings call

Call held 19 May 2025

Management summary

Dhruv Consultancy Services Limited reported strong financial performance for Q4 FY25 and the full year FY25, driven by significant growth in revenue and profitability. The company highlighted successful diversification beyond its core highway sector into railways, metros, and the private sector, securing several high-value contracts. Management also detailed its strategy for international expansion and operational efficiency improvements, while addressing concerns regarding the NHAI debarment and geopolitical risks.

Highlights

  • Q4 FY25 Total Income of INR 28.03 crores, up 12.09% YoY.

  • Q4 FY25 EBITDA of INR 4.09 crores, up 75% YoY.

  • Q4 FY25 PAT of INR 1.99 crores, up 360% YoY.

  • Full Year FY25 Total Income of INR 103.52 crores, up 25.6% YoY, marking entry into 3-digit turnover.

  • Successful diversification into railway, metro, and private sectors with new contract wins.

Concerns

  • NHAI debarment, though management expects a positive resolution, currently restricts bidding for new NHAI assignments.

  • Political instability in some international target regions (e.g., Africa) poses a risk to project execution and award timelines.

Key financials

2 periods

Q4 FY25

  • Total Income
    ₹28.03 Cr
    YoY +12.1%
  • EBITDA
    ₹4.09 Cr
    YoY +75%
  • PAT
    ₹1.99 Cr
    YoY +360%
  • Diluted EPS
    ₹1.13
    YoY +290%

FY25

  • Total Income
    ₹103.52 Cr
    YoY +25.6%
  • EBITDA
    ₹15.78 Cr
    YoY +7%
  • PAT
    ₹6.9 Cr
    YoY +17.3%
  • Diluted EPS
    ₹4.14
    YoY +6.7%

What they filed

Q1 FY27: revenue down 26.1%, net profit down 397.5% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue33 22 28 21 19 −41%-6 −126%8 −70%16 −26%
EBITDA4 4 4 3 2 −47%-29 −854%-9 −301%-4 −213%
Net profit2 2 2 2 1 −47%-31 −1542%-0 −103%-5 −397%
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.

Capital allocation

high confidence
  • Liquidity Undrawn ₹8.5 Cr A preferential issue raised INR 33.24 crores, with most used for working capital and 25-30% reserved for future bank guarantees. The company has a total CC limit of INR 8.5 crores from HDFC and PNB, with enhancement due.
    Yes. So I'll tell the full year review as such. So like the trend has been for the past 22 years, the cash flow situation as such, recently when we did the preferential issue, we raised a total of INR 33.24 crores by diluting around 3 Lakh shares. So out of those INR33 crores, most of it were used for working capital, then another 25%, 30% of it is still lying with us for the future bank guarantees that is -- for the future bank guarantees that we may require. We have presently exhausted our bank guarantee limits and enhancement is due. So till then, we might have to issue certain bank guarantees for new projects, especially international projects, wherein a line of credit might be required for some funded assignments. So those funds are reserved. Along with that, we definitely have support from our bankers, HDFC and PNB, where we have a total CC limit of over INR 8.5 crores and which is due for enhancement also now. So we are expecting further support from the debt side as well.

Guidance & targets

Diversification

  • Leadership in new sectors Diversification · by 2030 · High confidence 2-3 other sectors
    And after -- this is going to be our Vision 2030, wherein at least we become a leader in 2 other such sectors.

    — Tanvi Auti

Order Book Composition

  • Domestic order book share Order Book Composition · Ongoing · Medium confidence 60-70%
    So I think with the client base improving, we can see improvements, thereby like we target that 60%, 70% of the order book will still come from the domestic market, but 20%, 30%, we are targeting that the international order book would increase.

    — Tanvi Auti

  • International order book share Order Book Composition · Ongoing · Medium confidence 20-30%

    — Tanvi Auti

Geographical Expansion

  • International footprint Geographical Expansion · FY26 · High confidence Expansion into Africa, Middle East, Southeast Asia
    So even geographical expansion can be expected in this financial year. So overall, this year, you would see a combination of geographical expansion as well as sectoral expansion.

    — Tanvi Auti

Sectoral Expansion

  • New sectors Sectoral Expansion · FY26 · High confidence Airports, Public Health Engineering, Inland Water Transport, Urban Infrastructure
    Going ahead, we are targeting urban infrastructure projects like town planning, then like the smart city project, then there are airports. Then there is public health engineering, mainly wastewater and sewerage, then there is Inland Water Transport projects also where we have enough expertise to execute such projects.

    — Tanvi Auti

Airport Market

  • Market entry strategy Airport Market · Ongoing · High confidence Early entrant
    So we want to be an early entrant there, and we are hopeful of getting an airport project very soon.

    — Tanvi Auti

What to watch in Q1 FY26

NHAI Debarment Resolution

Soon (order expected)
Current Appeal hearings completed, positive outcome expected, order awaited.
Target Debarment lifted, allowing bidding for new NHAI projects.

Why it matters

Resolution of this issue will unlock a significant market segment for new project acquisitions and remove a key regulatory overhang.

On 22nd of April, the hearings are completed. And we also heard that online hearing video conferencing. So according to our council also, the hearings went in a positive way inside of Dhruv and our joint venture partner, Global. And any time we are expecting either a stay order or squash according to our council. Order is expected soon.

Risks & concerns

  • NHAI Debarment

    medium

    The company is currently debarred from bidding for new NHAI assignments, though an appeal is underway with a positive outcome expected. Existing NHAI projects are unaffected, and the unexecuted order book of INR 300 crores provides a buffer for the next 2 years.

    Analyst acknowledged

  • Political Instability in International Markets

    medium

    Political instability in certain African countries (e.g., Mozambique) can pose a risk to project execution and award timelines. This is mitigated by focusing on funded projects from multilateral banks (World Bank, AfDB) and establishing local alliances.

    Management acknowledged

Q&A highlights

8 direct
Business mix and diversification strategy Direct
So right now, 90% of the revenue is coming from the highway sector only because we have just started working in the railways and metro sector and around 5% to 10% of the revenue is coming from the railway sector, railways and metros together. But going forward, we will be adding new sectors along with railways and metros, we would be adding airports, public health engineering and I think urban infrastructure sector also.

Clarifies the current revenue concentration and outlines the company's strategic shift towards broader infrastructure segments.

Asked by Mahesh Sheth

Execution capabilities and resource availability for scaling Direct
So right now, we have a total employee strength of 450 plus. We have a dedicated business development and a human resource team, which is working constantly towards the recruitment of new manpower as and when it is required, project to project. So, we don't actually hire the manpower on day 1. We just have to identify, submit the tender. And then when the tender is awarded, if the tender is awarded to us, then we hire the manpower. So, there is no financial burden as such from day 1.

Addresses concerns about the company's ability to scale operations, particularly for new domestic and international projects, by detailing its flexible hiring model and low attrition rate.

Asked by Mahesh Sheth

International expansion strategy and target geographies Direct
Strategy: target funded projects (AFDB, ADB, World Bank, EXIM Bank). Register company locally after award. Targeting Zambia, Tanzania, Ghana, Nigeria (Africa); Saudi Arabia, Dubai (Middle East); Vietnam, Cambodia, South Asia, Nepal, Bangladesh (Southeast Asia).

Provides specific details on the company's cautious yet ambitious international expansion strategy, focusing on funded projects and local partnerships.

Asked by Mahesh Sheth

Update on NHAI debarment appeal and impact Direct
On 22nd of April, the hearings are completed. And we also heard that online hearing video conferencing. So according to our council also, the hearings went in a positive way inside of Dhruv and our joint venture partner, Global. And any time we are expecting either a stay order or squash according to our council. Order is expected soon. But let me add something in it. This is not affecting on our current financials or financials of next 2 years, because we have unexecuted order book of INR300 crores, including NHAI, which is untouched because of this debarment order. Only limited restriction we got is we are not in a position to bid for NHAI assignments, but other than NHAI assignments, we are bidding it, we are getting the works also.

Crucial update on a significant regulatory issue, clarifying that while new NHAI bids are restricted, existing projects and financials are not immediately impacted, and a positive resolution is anticipated.

Asked by Vidur Kapoor

Cash flow generation and working capital management Direct
So there have been significant improvements there. In addition to that, with margins improvement, there have been -- it has helped the cash flows also with the Mozambique project coming in, then the MSIDC and more and more state government projects coming in, we can see further cash flow improvements and as margins would improve.

Highlights improvements in receivable days and how diversification into higher-margin projects is expected to further enhance cash flow and working capital efficiency.

Asked by Pooja Gupta

Key focus areas for FY26 to sustain momentum Direct
We plan to diversify ourselves in 4 to 5 other sectors. With railways, metros, we have already achieved success in the Q4 FY '25. Going ahead, we are targeting urban infrastructure projects like town planning, then like the smart city project, then there are airports. Then there is public health engineering, mainly wastewater and sewerage, then there is Inland Water Transport projects also where we have enough expertise to execute such projects.

Outlines the strategic roadmap for the upcoming fiscal year, emphasizing continued diversification into high-growth infrastructure segments beyond highways.

Asked by Aditi Rai

Challenges impacting EBITDA margin compression Direct
Now that we have already expanded our client base, our geographical base, then we are entering into private sector. Our business development has been given targets of increasing the private sector order book. We are also in the process of acquiring a few lenders engineering assignments, then wayside amenity projects, then a few outsourcing projects, design outsourcing projects from developed countries like U.S.A. and Europe. So with so much development happening, the prime focus would not just be the top line, but the bottom line also, which would give a cash flow support and good profitability and EPS in the coming quarters.

Explains the historical margin profile and the strategic initiatives being taken to improve profitability and EPS by diversifying into higher-margin private sector and specialized projects.

Asked by Aditi Rai

Factors for strong Q4 FY25 and FY25 growth Direct
So there have been 2 such factors, one being increase in the client -- increase in clients that is we have enhanced our base not just in the highway sector, but in the railway sector also. So with new clients coming in, there has been improvements in the top line as well as the bottom line. So 2 major projects. One is the railway project in 3 major projects, railway project in Tamil Nadu, then second being an MSIDC 300 kilometres supervision assignment, again, which is a INR23 crores assignment, third being the Mozambique project, which is around USD4 lakh, and we have completed its execution, and we are yet to receive the final money from there. But since the revenue has already been booked for that, there has been significant growth in Q4 FY '25.

Provides specific examples of projects and client diversification that contributed to the strong financial performance in the reported periods.

Asked by Rajendra Singh

3 min read 6 chapters

Detailed narrative

Strong Financial Performance in Q4 FY25 and Full Year FY25

Dhruv Consultancy Services Limited delivered robust financial results for Q4 FY25, with total income growing 12.09% YoY to INR 28.03 crores. EBITDA saw a significant 75% YoY increase to INR 4.09 crores, and PAT surged by 360% YoY to INR 1.99 crores. For the full fiscal year FY25, the company achieved a total income of INR 103.52 crores, marking a 25.6% YoY growth and crossing the 3-digit turnover milestone. Full-year EBITDA stood at INR 15.78 crores (up 6.96% YoY) and PAT at INR 6.9 crores (up 17.26% YoY).

Strategic Diversification and New Project Wins

The company successfully diversified its project portfolio beyond its traditional highway focus. Key wins include a general consultancy contract worth INR 11.05 crores from West Central Railway, an independent engineer services order of INR 9.27 crores for Bharatmala Pariyojna in West Bengal, and two greenfield highway projects in Uttar Pradesh totaling INR 7.85 crores. Dhruv also secured a INR 1.09 crores agreement with HCC, marking its entry into the private sector, and project management consultancy roles for Mumbai Metro Line 5 (INR 1.35 crores) and Indore Municipal Corporation (INR 1.25 crores).

International Expansion Strategy

Dhruv is actively pursuing international growth, having registered a branch office and secured a work permit in Mozambique after winning a USD 4 lakh project. The strategy involves targeting funded projects from multilateral development banks (AFDB, ADB, World Bank, EXIM Bank) and establishing local companies upon project award. The company is actively exploring opportunities in Africa (Zambia, Tanzania, Ghana, Nigeria), the Middle East (Saudi Arabia, Dubai), and Southeast Asia (Vietnam, Cambodia, Nepal, Bangladesh), with 21 strategic alliances already formed.

Operational Efficiency and Manpower Strength

The company maintains a strong operational base with over 450 employees and a low attrition rate of 2%. A dedicated team of 100 engineers at the head office supports project execution, and the company employs a project-to-project hiring model for new assignments to manage financial burden. Recent investments in a Mobile Bridge Inspection Unit, Falling Weight Deflectometer, and high-tech design software have further enhanced operational capacity and reduced design/review timelines from months to days, improving overall efficiency.

Working Capital Management and Funding

Dhruv has made significant improvements in working capital management, reducing debtor days from 160-180 to 90-120. A preferential issue raised INR 33.24 crores, primarily allocated to working capital and future bank guarantees. The company has an existing CC limit of INR 8.5 crores from HDFC and PNB, with an enhancement due, indicating strong banking support. Diversification into higher-margin private and state government projects is expected to further improve cash flows and profitability.

Vision 2030 and Future Growth Avenues

Under its Vision 2030, Dhruv aims to become a leader in 2-3 additional sectors beyond highways. Key focus areas for FY26 include urban infrastructure (town planning, smart cities), airports (leveraging the government's plan for 226 new airports), public health engineering, and inland water transport. The company plans to replicate its successful highway sector strategy by starting with smaller private or state government assignments to build eligibility in new segments.

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