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    G R Infraproject

    GRINFRA
    Construction·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

    5

    • 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

    5

    • 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.

    What Changed2

    vs Q4 FY25

    Guidance items7 → 8 (+1)Risks discussed5 → 6 (+1)

    Key financials

    Single quarter

    06 metrics
    1. 01Standalone Revenue from Operations₹1,500.53 Cr-16.9%YoY
    2. 02Consolidated Revenue from Operations₹1,695 Cr-20.6%YoY
    3. 03Standalone EBITDA Margin12.8%+0.2%YoY
    4. 04Consolidated EBITDA Margin21.8%-2.0%YoY
    5. 05Standalone PAT₹168.6 Cr+8.5%YoY

    Order Book

    high confidence

    Total Value

    ₹ 19,971 crores

    as of 2024-12-31

    quantified

    Execution

    INR12,244 crores worth of projects are under execution.

    Composition

    Mix3 statuss
    • Under Execution61.3%
    • Awaiting Appointed Dates23.2%
    • L1 Status15.5%

    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

    3
    high confidence
    CategoryHeadline
    Capex

    ₹125 crores

    Debt

    Debt disclosed

    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.

    Guidance & targets

    8
    CategoryTargetPriority
    Revenue
    Revenue Growth
    Negative 10-12%
    		Medium
    Revenue
    Revenue Growth
    9-12%
    		Medium
    Order Inflow
    Order Inflow
    ₹17,000 crores
    		Medium
    Order Inflow
    Order Inflow
    ₹20,000 crores
    		Medium
    Order Inflow
    New Order Book
    ₹8,000-9,000 crores
    		Medium
    Profitability
    EBITDA Margin
    10-12%
    		Medium
    Profitability
    EBITDA Margin
    13-15%
    		Medium
    Capital Allocation
    Equity Recycling from HAM Assets
    ₹1,000-1,200 crores
    		High

    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.

    How to verify

    order_book.execution

    Risks & concerns

    6
    RiskSeverity

    Muted Awarding Activity and Underbidding

    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

    medium

    Delay in Appointed Dates

    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

    high

    High Competition in Road Sector

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

    medium

    Increased Working Capital Days

    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

    medium

    Acceptability of New BOT MCA

    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

    low

    Money Repatriation in Overseas Markets

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

    medium

    Q&A highlights

    8

    “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

    2 min read6 chapters

    Detailed Narrative

    01

    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.

    02

    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.

    03

    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.

    04

    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.

    05

    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.

    06

    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.

    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.