G R Infraprojects Limited — Q3 FY25 earnings call

Call held 3 Feb 2025

Management summary

G R Infraproject reported a challenging Q3 FY25 with significant revenue decline both standalone and consolidated, primarily attributed to delays in project appointed dates. Despite this, standalone EBITDA margin saw a slight improvement, and consolidated PAT grew by over 8%. The company maintains a healthy order book and pipeline, with strategic diversification into non-road sectors like transmission and ropeway to mitigate high competition in roads. Management expects a return to double-digit growth in FY26 and aims for asset monetization through InvITs.

Highlights

  • Standalone EBITDA margin improved by 0.2% to 12.82% in Q3 FY25 compared to 12.62% in Q3 FY24.

  • Consolidated PAT increased by 8.12% to ₹262.6 crores in Q3 FY25 compared to ₹243 crores in Q3 FY24.

  • Debt repaid of ₹159.80 crores, resulting in an improved standalone debt-equity ratio of 0.07.

  • Received provisional COD for 1 HAM project and appointed dates for 6 projects (3 roads, 1 metro, 1 ropeway, 1 MMLP).

  • Declared L1 for a road project in Maharashtra (₹1,947 crores) and a Rail Project (₹222 crores) in January 2025.

Concerns

  • Standalone revenue from operations decreased by 16.9% YoY to ₹1,500.53 crores, primarily due to delays in appointed dates for projects in initial phases.

  • Consolidated revenue from operations decreased by 20.6% YoY to ₹1,695 crores.

  • Consolidated EBITDA margin decreased to 21.82% in Q3 FY25 from 23.79% in Q3 FY24.

  • Working capital days increased to 124 days from 112 days in FY24, primarily due to an increase in SPV debtors.

  • FY25 revenue growth guidance revised to negative 10-12% from previous 5-10% growth due to execution delays.

Key financials

  1. Standalone Revenue from Operations ₹1,500.53 Cr -16.9%YoY
  2. Consolidated Revenue from Operations ₹1,695 Cr -20.6%YoY
  3. Standalone EBITDA Margin 12.8% +0.2%YoY
  4. Consolidated EBITDA Margin 21.8% -2%YoY
  5. Standalone PAT ₹168.6 Cr +8.5%YoY
  6. Consolidated PAT ₹262.6 Cr +8.1%YoY

What they filed

Q1 FY27: revenue up 32.7%, net profit down 5.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,128 1,501 1,990 1,826 1,234 +9%2,039 +36%2,521 +27%2,423 +33%
EBITDA117 192 348 231 120 +3%205 +7%273 −22%267 +16%
Net profit115 169 371 216 131 +14%232 +37%417 +12%204 −6%
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

₹19,971 Cr

as of 2024-12-31 quantified

Execution

INR12,244 crores worth of projects are under execution.

Composition

Mix 3 statuses
  • Under Execution 61.3%
  • Awaiting Appointed Dates 23.2%
  • L1 Status 15.5%

Share of order book by status

Pipeline

qualified rfp

13 highway, railway and ropeway projects submitted for bidding, amounting to INR13,992 crores, expected to be opened soon. Also, L1 for road project in Maharashtra (₹1,947 crores) and Rail Project (₹222 crores) in January.

The company is targeting an order pipeline of approximately INR1,35,000 crores in various sectors like highway, road tunnel, metro, power transmission and railways, ropeway, etcetera, aiming to add a decent share to the order book in the last quarter and take the company back to double-digit growth in financial year '26.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex ₹125 Cr
    The capex, we are not expecting more than -- for the full year not more than INR125 crores. So maybe another INR30 crores, INR40 crores for the current year or for next year, again, because capex, we are, I would say, fairly -- capex is already having we are in our balance sheet, so we don't expect much -- I mean, there is not significant difference from what we have been doing for last 2 years, so maybe INR150 crores is the maximum capex.
  • Debt Debt disclosed
    • Repayment Repaid debt of INR159.80 crores, resulting in improved debt-equity ratio. ₹159.8 Cr
    Our stand-alone, total stand-alone borrowing outstanding at the end of December 2024 is INR529 crores with debt to equity of 0.07. Our consolidated borrowings outstanding at the end of December 2024 is INR4,937 crores with a debt to equity of 0.61x.
  • Liquidity Liquidity disclosed Working capital days increased to 124 days from 112 days due to increase in SPV debtors. Standalone debtors are INR614 crores, including INR1,466 crores from SPV debtors. Consolidated trade receivable is INR247 crores. Unbilled revenue (consolidated) is INR168 crores.
    Our working capital in days at the end of current quarter is 124 days as compared to 112 days at the end of fiscal 2024. This increase is primarily on account of increase in our SPV debtors. Our credit receivable at the end of at the stand-alone basis are INR614 crores, which includes INR1,466 crores from our SPV debtors at the end of December 2024. Our trade receivable at the consolidated level are INR247 crores at the end of December 2024. Our unbilled revenue at the stand-alone basis is INR738 crores at the end of December 2024, which was sorry, our unbilled revenue at the end of -- at the consolidated level is INR168 crores at the end of December 2024.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY25 · Medium confidence Negative 10-12%

    Previously 5-10% → Negative 10-12%

    What we believe is that for the whole -- current whole year, we are expecting that we will be certainly having negative growth of 10%, that's for sure, I believe, maybe in the 10%, 12% at max, I would say.

    — Ajendra Agarwal, Managing Director

  • Revenue Growth Revenue · FY26 · Medium confidence 9-12%
    So we'll be certainly having double digit or, I would say, 9% to 12% kind of growth for the next financial year.

    — Ajendra Agarwal, Managing Director

Order Inflow

  • Order Inflow Order Inflow · FY25 · Medium confidence ₹17,000 crores

    Previously ₹20,000 crores → ₹17,000 crores

    See, current year, we are targeting almost INR17,000 crores of the orders in flow, right? Yes. So next year -- I mean, this year, our target original target was INR20,000 crores, so we'll try to stick with that for next year as well.

    — Ajendra Agarwal, Managing Director

  • Order Inflow Order Inflow · FY26 · Medium confidence ₹20,000 crores

    — Ajendra Agarwal, Managing Director

  • New Order Book Order Inflow · by March 2025 · Medium confidence ₹8,000-9,000 crores
    By March, we are targeting in the range of INR8,000 crores to INR9,000 crores of incoming -- I mean new order book.

    — Ajendra Agarwal, Managing Director

Profitability

  • EBITDA Margin Profitability · FY26 · Medium confidence 10-12%
    So what we believe is that we'll -- I mean we are expecting I mean, 10% to 12% kind of EBITDA margin for next year as well.

    — Ajendra Agarwal, Managing Director

  • EBITDA Margin Profitability · FY27 · Medium confidence 13-15%
    Yes, '27, of course, because see, unless until that things improve in terms of competitive intensity, right? We'll be -- because what we believe is that the trend -- the EBITDA margins should be in the range of 13% to 15% for this kind of industry. But -- and if more and more BOT projects will be coming, certainly, we are quite confident for FY '27, we'll be able to improve on that EBITDA margin.

    — Ajendra Agarwal, Managing Director

Capital Allocation

  • Equity Recycling from HAM Assets Capital Allocation · next 1 year · High confidence ₹1,000-1,200 crores
    So what -- I believe that we'll be able to, all the operational HAM assets, which right now we are having in our portfolio in the next 1 year of time. And next financial, we'll be able to transfer it to InvIT either or to some other guys, right, depending on that negotiation with so maybe that equity would be in the range of -- which we will be transferring would be in INR1,000 crores, INR1,200 crores.

    — Ajendra Agarwal, Managing Director

What to watch in Q4 FY25

Execution of projects with appointed dates

by June 2025
Current ₹4,642 crores awaiting appointed dates, ₹3,084 crores in L1 status
Target ₹5,000 crores worth of projects cleared for execution by June 2025

Why it matters

Timely execution of these projects is crucial for revenue recovery and achieving FY26 growth targets.

So is it safe to assume that about INR5,000 crores worth of projects will be cleared for project execution in the coming, say, 3 to 4 months of the INR7,500 crores? Yes, of course. Yes, yes, before June -- yes, yes, we can expect.

Risks & concerns

  • Delay in Appointed Dates

    high

    Delay in receiving appointed dates for projects, particularly in initial phases, has impacted execution and led to a decrease in current quarter's revenue.

    Management acknowledged

  • Muted Awarding Activity and Underbidding

    medium

    Awarding activity has been muted in the first 3 quarters, and underbidding up to 40% persists, impacting new order inflows and potentially margins.

    Management acknowledged

  • High Competition in Road Sector

    medium

    Competition in the road sector remains high, making it difficult to maintain margins and necessitating diversification into other sectors.

    Management acknowledged

  • Increased Working Capital Days

    medium

    Working capital days increased to 124 days from 112 days, primarily due to an increase in SPV debtors, indicating potential cash flow strain.

    Management acknowledged

  • Money Repatriation in Overseas Markets

    medium

    Experience in African markets highlighted significant issues with repatriating money, making the company cautious about aggressive overseas expansion.

    Management acknowledged

  • Acceptability of New BOT MCA

    low

    Acceptability of the new Model Concession Agreement for BOT projects is not yet at the level of HAM, requiring government efforts to educate the industry.

    Management acknowledged

Q&A highlights

5 direct
Appointed Dates for Projects Direct
See for INR4,000 crores of -- we are expecting appointed date for road projects, which are valuing around INR2,100 crores in the current quarter itself. So maybe for one project in the current month or by -- yes, by end of current month and the balance second road project we'll be expecting in the month of March. And the L1 project, what we believe is that probably for BSNL, we are expecting in the current month itself. We are expecting that LOA will be given to us. And for Maharashtra State Road projects, this may take time given that past experience of ours with the client. We are expecting in another 3 to 6 months we'll be expecting that LOA for Maharashtra State Road projects.

Clarifies the timeline for receiving appointed dates and LOAs for projects worth ₹7,600 crores (₹4,600cr awaiting AD + ₹3,000cr L1), which is crucial for execution and revenue generation.

Asked by Harish Biyani

FY25 Revenue Degrowth and FY26 Growth Guidance Direct
So the first question, which -- I mean because yes, I mean, our earlier guidance was 5% to 10%, but what we believe is because most of the projects we have received the appointed date in the last quarter. What we believe is that for the whole -- current whole year, we are expecting that we will be certainly having negative growth of 10%, that's for sure, I believe, maybe in the 10%, 12% at max, I would say. And for the next year, because what we believe is that government is even quite focusing on the state I mean, they are incentivizing the state for their capital expenditure program and all that. And we believe that more and more states would be coming with their EPC projects, and we'll be participating over there as most of the projects will be are funded by the central government by way of that INR1,50,000 crores of interest-free loan for the 50 years. So what we believe is that going forward, we'll be having more EPC projects in our portfolio, and we'll be able to deliver it fast I mean execution would be starting early. So we'll be certainly having double digit or, I would say, 9% to 12% kind of growth for the next financial year.

Management revised FY25 revenue guidance to negative growth due to execution delays but provided a positive double-digit growth outlook for FY26, driven by state EPC projects and central government funding.

Asked by Shravan Shah

Margin Outlook with Diversification Direct
No. So in our experience, what we are seeing is in road, there's huge competition. And what I believe is probably if I will be able to diversify into good sector, different sector, we'll be comfortably, we'll be making more than what margin, otherwise, we are making through road sector because -- I mean competition has not come down so far in road sector. Unless until it is coming down, we'll not be able to. So what we believe is that we'll I mean we are expecting I mean, 10% to 12% kind of EBITDA margin for next year as well. And once we are established into different sectors, then only we'll be more confident in terms of what margin we'll be getting from those sectors because still we are having a big chunk in our execution from road, right?

Addresses concerns about margin sustainability with diversification, stating that non-road sectors offer better margins due to high competition in roads, and expects 10-12% EBITDA margin for FY26.

Asked by Alok Deora

Order Inflow Guidance for FY26 and Bidding Strategy Direct
FY '26, what I believe is that certainly I mean, see, current year, we are targeting almost INR17,000 crores of the orders in flow, right? Yes. So next year -- I mean, this year, our target original target was INR20,000 crores, so we'll try to stick with that for next year as well. See, we'll be bidding -- certainly, we will not be going more aggressive into road sector. But what we believe is that government is also changing there -- I mean, they are shifting their modus operandi of execution of roads. They are coming up with more BOT projects. Maybe BOT toll or may BOT annuity.

Management reiterated FY26 order inflow target of ₹20,000 crores and outlined a strategy of less aggressive bidding in the road sector, focusing on BOT projects and other segments due to changing government execution models.

Asked by Jainam Jain

Traction in BOT Projects Partial
BOT, maybe that the ecosystem I mean, that probably that information I've not released that. But what I believe is that acceptability to the BOT in the industry so far is not to that level, which was actually there for the HAM. And stakeholder management is being done by the government or the authorities, right, and they are just educating what they have all amendments carried out in the previous version of the BOT to make it more acceptable amongst the industry player. So going forward, what I believe is that which has -- I mean they have demonstrated in their budget speech also, what I believe is that more and more projects would be coming in the BOT going forward.

Explains the slow traction in BOT projects, attributing it to lower industry acceptability compared to HAM, but expects more BOT projects going forward due to government efforts and budget focus.

Asked by Jainam Jain

Transmission Segment Capability and Margins Direct
No, we are doing the EPC work on our own, the whole team has developed here, and the same team is executing. No, in transmission, Parikshit Ji, we will look at EPC, I mean, so far what we believe is that, whatever experience we had in the industry, we do not see any margin in EPC, if the margin improves, then certainly we will be doing EPC projects also in transmission, but we should get a reasonable margin.

Confirms internal capability for transmission EPC projects but highlights current low margins in the sector, indicating a focus on projects with reasonable margins.

Asked by Parikshit Kandpal

Diversification Beyond Roads (Solar, Battery Storage) Partial
Solar, we have seen till now, but somehow we are not able to break through, because we are exploring, I mean, it is a continuous process, we are seeing, if we will be able to do some value addition, certainly we will be entering into this space, and in clean energy, I mean, so the government has come up with their own plan, in nuclear power also, I mean, so then we have to also go through all those plans, and if we find that there are opportunities for us, certainly we will be diversifying.

Management acknowledges interest in solar and clean energy but indicates challenges in breaking through, emphasizing a cautious approach based on value addition and opportunities.

Asked by Parikshit Kandpal

Overseas Market Re-entry Partial
See, overseas, I mean, we tried to into African market, but the issue which we found is that, again, unless until we have some sort of confidence in terms of even getting our currency or amount back, like rupees back into country, because what we have realized that with the repatriation of money is a major issue over there. So to that extent, we are not much aggressive unless until we found some solutions that okay we will be able to secure our money back, into country we'll be doing overseas project.

Reveals past attempts in African markets but highlights significant challenges with money repatriation, leading to a cautious stance on aggressive overseas expansion until solutions are found.

Asked by Parikshit Kandpal

2 min read 6 chapters

Detailed narrative

Q3 FY25 Financial Performance Overview

G R Infraproject reported a standalone revenue from operations of ₹1,500.53 crores for Q3 FY25, a decrease from ₹1,806.42 crores in the corresponding previous year quarter. Consolidated revenue also saw a decline to ₹1,695 crores from ₹2,134 crores. This reduction was primarily attributed to delays in receiving appointed dates for projects in their initial phases. Despite the revenue dip, standalone EBITDA margin slightly improved to 12.82% from 12.62%, while consolidated PAT increased by 8.12% to ₹262.6 crores.

Order Book and Pipeline Update

The company's order book stood at ₹19,971 crores as of December 31, 2024, with ₹12,244 crores under execution, ₹4,642 crores awaiting appointed dates, and ₹3,084 crores in L1 status. Management expects appointed dates for ₹2,100 crores worth of road projects by March 2025 and for L1 projects (BSNL and Maharashtra Road) within 3-6 months. The bidding pipeline remains robust, with 13 projects worth ₹13,992 crores already submitted and a broader target pipeline of ₹1,35,000 crores across various sectors.

Revised FY25 and FY26 Outlook

Due to execution delays from delayed appointed dates, the company revised its FY25 revenue growth guidance to a negative 10-12% from the earlier 5-10% positive growth. However, management is optimistic about FY26, projecting a double-digit revenue growth of 9-12%, driven by an expected increase in state EPC projects and central government funding. The order inflow target for FY25 has been revised to ₹17,000 crores (from ₹20,000 crores), with a target of ₹8,000-9,000 crores in new orders by March 2025.

Strategic Diversification and Margin Management

G R Infraproject is actively diversifying its portfolio beyond roads into sectors like transmission, ropeway, metro, and tunnels to mitigate high competition in the road sector. Management expects EBITDA margins to be in the 10-12% range for FY26, potentially improving to 13-15% by FY27 if more BOT projects materialize. The company aims for non-road sectors to constitute a significant portion (60-70%) of new order inflows.

Capital Allocation and Asset Monetization

The company repaid ₹159.80 crores of debt, bringing its standalone debt-equity ratio to a healthy 0.07. Total standalone borrowing stood at ₹529 crores, and consolidated borrowing at ₹4,937 crores. Capex for FY25 is expected to be around ₹125 crores, with a maximum of ₹150 crores projected for next year. The company received ₹39-40 crores in InvIT income this quarter, with a full-year expectation of ₹178 crores and a run rate of ₹200-250 crores for next year. Management plans to recycle ₹1,000-1,200 crores of equity from operational HAM assets within the next year.

Working Capital and Receivables

Working capital days increased to 124 days in Q3 FY25 from 112 days in FY24, primarily due to an increase in SPV debtors. Standalone debtors were ₹614 crores, including ₹1,466 crores from SPVs. Consolidated trade receivables stood at ₹247 crores, and consolidated unbilled revenue was ₹168 crores. Management noted that the decline in other expenses was due to a decrease in provisioning for long-outstanding debtors.

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