GPT Infraprojects Limited — Q3 FY25 earnings call

Call held 5 Feb 2025

Management summary

GPT Infraprojects reported strong Q3 FY25 results with double-digit revenue and significant PAT growth, driven by robust execution in the infrastructure segment. The company achieved key milestones including a credit rating upgrade and reduced promoter share pledge, while maintaining a healthy order book. Despite a slight revision in revenue guidance due to temporary operational constraints, management remains confident in achieving its FY25 targets and further debt reduction.

Highlights

  • Consolidated revenue for Q3 FY25 stood at ₹278 crores, representing a growth of 10% YoY.

  • Consolidated PAT for Q3 FY25 was ₹21 crores, growing by 44% from ₹15 crores last year.

  • The order book backlog is healthy at ₹3,332 crores, representing almost 3.3x of FY24 numbers.

  • Promoter share pledge was reduced from 51% to 34% of total shares.

  • The external long-term credit rating was upgraded to 'A Stable' by CRISIL, leading to an average borrowing cost below 9%.

Concerns

  • Revenue growth guidance for FY25 was revised from 20-25% to 15-18% due to temporary operational dip from Kumbh Mela restrictions.

  • H1 FY25 cash flow from operations was negative ₹20 crores, attributed to a strategic reduction in trade payables post QIP.

Key financials

2 periods

Headline

  • Consolidated Revenue
    ₹278 Cr
    YoY +10%
  • Standalone Revenue
    ₹273 Cr
    YoY +11%
  • Consolidated EBITDA
    ₹36 Cr
    YoY +18%
  • Standalone EBITDA
    ₹36 Cr
    YoY +13%
  • Consolidated PAT
    ₹21 Cr
    YoY +44%
  • Standalone PAT
    ₹22 Cr
    YoY +45%

9M

  • FY25 Consolidated Revenue
    ₹807 Cr
    YoY +12%
  • FY25 Standalone Revenue
    ₹790 Cr
    YoY +13%
  • FY25 Consolidated EBITDA
    ₹103 Cr
    YoY +11%
  • FY25 Standalone EBITDA
    ₹110 Cr
    YoY +21%

What they filed

Q1 FY27: revenue down 3.5%, net profit down 4.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue288 278 381 313 279 −3%284 +2%415 +9%302 −4%
EBITDA31 34 39 37 40 +29%38 +12%59 +51%48 +30%
Net profit15 21 22 25 21 +40%20 −5%30 +36%24 −4%
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.

Segment breakdown

Share of Revenue (9M FY25)
₹808 Cr Total
  • Infrastructure ₹748 Cr 92.6%
  • Sleeper ₹60 Cr 7.4%

Order book

high confidence

Total value

₹3,332 Cr

as of 2024-12-31 quantified

Composition

  • Infrastructure (segment) ₹3,115 Cr
  • Central Region/UP (geography) ₹1,500 Cr 45%

Pipeline

L1 awaiting loa

Bidding for 7-8 large contracts, prices not yet opened due to budget/elections.

Confident of maintaining a robust and healthy order book, with current backlog providing 3.3x visibility on FY24 numbers.

Source: Prepared remarks

Capital allocation

high confidence
  • Debt Net ₹100 Cr Cost 9%
    • Repayment ₹125 crores from QIP proceeds used for debt repayment. ₹125 Cr
    The debt level is currently about 100 crores, which includes long term and short term debt post the QIP... So, average borrowing cost is below 9% now.
  • Dividend ₹1/share (interim)
    The management has also announced second interim dividend with the record date of February 10th, 2025.
  • Liquidity Liquidity disclosed Cash flows continue to be strong with reduction in interest cost. CFO-to-PAT conversion for FY25 expected to be close to 80%. H1 FY25 negative cash flow from operations (-₹20 crores) was due to a strategic reduction in trade payables post QIP.
    The cash flows also continue to be strong with the reduction in interest cost... CFO-to-PAT would be close to 80%... So, net cash flow from operations is negative, because we made a lot of payments. We had answered this in the last quarter itself with respect to the trade payables, we reduced that a lot post the QIP.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY25 · High confidence 15% to 18%

    Previously 20% - 25% → 15% to 18%

    We are on track to achieve a 15% to 18% kind of growth in FY'25... So, it's not actually lowering the guidance. What has happened is because of this Kumbh Mela, Prayagraj and UP area, lot of restrictions were there. So, that is why a slight dip in the operations there. But we are still on track to achieve an 18% kind of a number for the year, which is a good number.

    — Atul Tantia

  • Revenue Revenue · FY27 · High confidence ₹2,000 crores
    Yes, we should be close to 2,000 crores by FY'27.

    — Atul Tantia

Margin

  • EBITDA Hurdle Rate Margin · long-term · High confidence 13%
    We are confident of maintaining a long-term EBITDA hurdle rate of 13% which has been a historical guidance by us as well.

    — Atul Tantia

  • Ghana Facility EBITDA Margin Margin · High confidence 25%
    Ghana should do about 25%-odd kind of a margin.

    — Atul Tantia

  • Railways and Normal Business EBITDA Margin Margin · High confidence 13%
    EBITDA margins for both of the business is almost similar; so it is 13%-odd.

    — Atul Tantia

Profitability

  • PAT Margin Profitability · FY26 · High confidence 8% - 8.5%
    I think 7.5% - 8% is a good number for an EPC company and we expect PAT to be around 8% - 8.5%, not higher.

    — Atul Tantia

Order Inflow

  • Order Inflow Order Inflow · FY26 · High confidence ₹2,000 crores
    Like I said, close to 2,000 crores is the target for next year.

    — Atul Tantia

Working Capital

  • Working Capital Days Working Capital · High confidence 90 days
    So, I said 90 days in the last call. I think we're on track to do that.

    — Atul Tantia

Debt

  • Net Debt Debt · FY26 · High confidence below ₹75 crores
    We are reducing the debt every quarter and we expect I would not say debt-free, but I think we have a target by FY'26, we should bring it down below 75 crores.

    — Atul Tantia

What to watch in Q4 FY25

Debt reduction target

by FY26
Current ₹100 crores
Target below ₹75 crores

Why it matters

Tracking progress on debt reduction is key to improving financial health and reducing interest costs.

We are reducing the debt every quarter and we expect I would not say debt-free, but I think we have a target by FY'26, we should bring it down below 75 crores.

Risks & concerns

  • Operational disruption due to local events (Kumbh Mela)

    medium

    Kumbh Mela restrictions in Prayagraj and UP area caused a slight, temporary dip in operations, leading to a revision in FY25 revenue growth guidance.

    Management acknowledged

  • Political complexities in African countries impacting operations

    low

    Analyst raised concerns about political complexities in Africa; management stated they have been operating in South Africa for 15+ years and Ghana factory is expected to be operational post recent elections.

    Analyst downplayed

  • Slowdown in budget allocation for road infrastructure projects

    low

    Analyst expressed concern about lower budget allocation for road infrastructure; management stated allocations are similar to last year (~₹2.5 lakh crores) and they do not expect a slowdown in order inflow.

    Analyst downplayed

Q&A highlights

7 direct
Debt levels and future interest cost post QIP Direct
The debt level is currently about 100 crores, which includes long term and short term debt post the QIP... So, we are still firm on the number of 20 crores annual interest cost, which will be for FY'26 or slightly lower. Honestly, what has also happened is with the improvement in the credit rating, our interest cost like I said earlier has also come down. So, average borrowing cost is below 9% now.

Clarifies the current debt position and the expected annual interest cost, highlighting the benefit of the QIP and credit rating upgrade.

Asked by Darshil Pandya

Status of bidding pipeline and L1 bids Partial
L1, we will announce as and when it is done. Like I said to the previous gentleman, we have bid for some seven or eight large contracts recently. However, due to the elections, the prices were not opened and we expect that to happen shortly.

Provides insight into the company's active bidding strategy and the temporary delay in bid openings due to elections, impacting immediate order conversion.

Asked by Hardik Gori

Reason for revision in revenue growth guidance Direct
So, it's not actually lowering the guidance. What has happened is because of this Kumbh Mela, Prayagraj and UP area, lot of restrictions were there. So, that is why a slight dip in the operations there. But we are still on track to achieve an 18% kind of a number for the year, which is a good number.

Explains the specific, temporary operational challenge (Kumbh Mela) that led to the guidance adjustment, reassuring that the underlying growth trajectory is intact.

Asked by Darshil Pandya

Negative cash flow from operations in H1 FY25 Direct
We made cash from operations, not negative. So, net cash flow from operations is negative, because we made a lot of payments. We had answered this in the last quarter itself with respect to the trade payables, we reduced that a lot post the QIP. So, that is why from operations it becomes negative temporarily.

Clarifies that the negative CFO was a result of strategic working capital management (reducing trade payables post QIP) rather than operational weakness.

Asked by Atharva

Reduction in promoter share pledge Direct
Like I said in my earlier remarks, from 51% of the total shares to now 34% of the total shares.

Confirms the significant reduction in promoter share pledge, a positive signal for corporate governance and financial health.

Asked by Atharva

Future PAT margin for FY26 Direct
I think 7.5% - 8% is a good number for an EPC company and we expect PAT to be around 8% - 8.5%, not higher.

Provides specific forward-looking guidance on profitability, setting investor expectations for the next fiscal year.

Asked by Taha

EBITDA margins for different business segments (Railways vs. Ghana) Direct
EBITDA margins for both of the business is almost similar; so it is 13%-odd... Ghana should do about 25%-odd kind of a margin.

Differentiates the margin profiles of the core domestic business and the international sleeper segment, highlighting the higher profitability of the Ghana operations.

Asked by Darshil Pandya

Strategy for Africa business and potential diversification Direct
So, the Africa business gives us a higher EBITDA margin of 20%-plus. Like I said earlier, Ghana would give about 25%. There is no plan to divest it because it is giving good returns on the investment... We are looking at certain contracts like tunneling, etc., but once we get that, then only we can announce that we are diversified.

Reaffirms commitment to the profitable Africa business and indicates potential future diversification into new infrastructure segments like tunneling.

Asked by Shivom

3 min read 6 chapters

Detailed narrative

Financial Performance Overview

GPT Infraprojects reported a strong Q3 FY25, with consolidated revenue growing 10% YoY to ₹278 crores and standalone revenue increasing 11% YoY to ₹273 crores. Consolidated EBITDA for the quarter rose 18% YoY to ₹36 crores, while standalone EBITDA grew 13% YoY to ₹36 crores. Profitability saw significant improvement, with consolidated PAT surging 44% YoY to ₹21 crores and standalone PAT up 45% YoY to ₹22 crores, both from ₹15 crores in the prior year. For the nine months ended FY25, the company achieved its highest ever revenue and profits.

Order Book and Growth Outlook

The company maintains a robust order book backlog of ₹3,332 crores as of December 31, 2024, which represents approximately 3.3 times its FY24 numbers. Order inflow during the current year (YTD FY25) stood at ₹1,040 crores, including incremental orders from existing contracts. Management is confident of achieving a 15% to 18% revenue growth for FY25, primarily driven by the infrastructure segment. The company is actively bidding for 7-8 large contracts, each valued between ₹750-1,100 crores, with prices expected to open shortly post-elections.

Capital Structure and Debt Management

Post the Qualified Institutional Placement (QIP), the company's debt level has reduced to approximately ₹100 crores, down from ₹190 crores before the QIP, with ₹125 crores of the ₹175 crores raised used for debt repayment. The average borrowing cost has decreased to below 9%, aided by an upgrade in the external long-term credit rating to 'A Stable' by CRISIL. The company has a target to further reduce its debt below ₹75 crores by FY26. Promoter share pledge has also been significantly reduced from 51% to 34% of total shares.

Operational Efficiency and Margin Profile

GPT Infraprojects aims to maintain a long-term EBITDA hurdle rate of 13%, with expectations of slight improvement. The PAT margin for FY26 is guided to be in the range of 8% to 8.5%. The company's CFO-to-PAT conversion is expected to be close to 80% for FY25. While H1 FY25 saw negative cash flow from operations of ₹20 crores, this was attributed to a strategic reduction in trade payables post QIP, rather than operational issues. Working capital days are targeted to be around 90 days, and the company is on track to achieve this.

Segment Performance and International Operations

The infrastructure segment remains the primary revenue driver, contributing almost 93% of the business with revenues of ₹748 crores for the nine months ended December 31, 2024. The Sleeper segment generated ₹60 crores in revenue during the same period, with contributions from the South African business. The Ghana factory is expected to commence operations shortly after the recently concluded elections, and it is anticipated to yield a higher EBITDA margin of approximately 25%. The company has no plans to divest its profitable Africa business, which currently delivers over 20% EBITDA margins.

Guidance and Future Targets

The company has set a revenue growth target of 15% to 18% for FY25, revised from an earlier 20-25% due to temporary restrictions from the Kumbh Mela. For FY26, the order inflow target is set at approximately ₹2,000 crores, with tenders typically above ₹300 crores, including a few large contracts around ₹1,000 crores. Looking further ahead, GPT Infraprojects aims to achieve revenues close to ₹2,000 crores by FY27. The management expects to maintain a robust order book, with the infrastructure segment continuing to be the major growth driver.

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