Man Infra — Q1 FY24 earnings call

Call held 2 Aug 2023

Management summary

Man Infraconstruction delivered a strong Q1 FY24, marked by significant growth in revenue, EBITDA, and net profit, driven by robust execution in both EPC and real estate segments. The company secured a substantial new port order, expanded its real estate portfolio with high-potential projects, and maintained a healthy balance sheet with reduced debt and strong liquidity. Management expressed confidence in continued growth and timely project deliveries.

Highlights

  • Revenue from operations grew 45% YoY to ₹510 crores in Q1 FY24.

  • EBITDA increased by 63% YoY to ₹109 crores.

  • Net profit jumped 112% YoY to ₹82 crores.

  • Financial costs decreased by 36% YoY to ₹9 crores.

  • Secured debt stood at ₹136 crores as of June 2023, with liquidity over ₹530 crores.

  • EPC order book strengthened to over ₹1,265 crores, including a new ₹680 crore port order.

  • Real estate portfolio expanded to 4.6 million sq ft, with a new Ghatkopar project having ₹1,200 crores revenue potential.

  • Declared a second interim dividend of ₹0.36 per equity share, totaling ₹0.72 per equity share for FY23-24.

Key financials

  1. Revenue from Operations ₹510 Cr +45%YoY
  2. Total Income ₹524 Cr +45%YoY
  3. EBITDA ₹109 Cr +63%YoY
  4. Net Profit ₹82 Cr +112%YoY
  5. Financial Cost ₹9 Cr -36%YoY
  6. Secured Debt ₹136 Cr
  7. Liquidity ₹530 Cr

What they filed

Q1 FY27: revenue up 4.0%, net profit down 1.6% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue71 86 131 99 58 −18%64 −26%65 −50%103 +4%
EBITDA14 20 21 27 11 −21%11 −45%13 −38%71 +163%
Net profit30 43 39 61 30 +0%30 −30%33 −15%60 −2%
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.

Guidance & targets

EPC

  • EPC Order Book Completion Period EPC · next 2.5 to 3 years · High confidence 2.5 to 3 years
    as far as the port sector is there, around Rs. 1,000 crore plus order books still we have and the completion period is around 2.5 to 3 years.

    — Parag Shah

Real Estate

  • Ghatkopar Project Revenue Potential Real Estate · next 4 years · High confidence ₹1,200 crores
    the project holds substantial revenue potential estimated at around Rs. 1,200 crores.

    — Manan Shah

  • Upcoming Projects Launch Real Estate · current financial year · High confidence during the current financial year during the festive time
    We are excited to launch these projects in the current financial year during the festive time.

    — Manan Shah

  • Ghatkopar 'Aaradhya One Earth' Project Delivery Real Estate · current financial year · High confidence during the current financial year
    We expect to deliver these projects during the current financial year.

    — Manan Shah

  • Dahisar Project Completion Real Estate · October end · High confidence by October end
    Another around 2 lakh to 3 lakh square feet which we are expecting to complete by October end and that also possession we are giving

    — Parag Shah

  • Juhu Project RCC Completion Real Estate · March · High confidence by the coming March
    we are expecting to complete RCC by the coming March and another six months for the finishing time.

    — Parag Shah

  • Vile Parle Project Start Real Estate · October-November · High confidence October latest by November
    Bang opposite to that we are doing another project which we are expecting to start by October latest by November

    — Parag Shah

  • Ghatkopar (first project) Completion Real Estate · December · High confidence by December
    we are expecting to complete the project in all respect by December.

    — Parag Shah

  • Ghatkopar (new project) Start Real Estate · October · High confidence by October
    we are estimating to start the work by October we are in the process of getting the permissions.

    — Parag Shah

  • Mulund 3rd and 4th Building Completion Real Estate · next 2 years · High confidence another two years
    And the 3rd and 4th building each in another two years will take.

    — Parag Shah

  • Mulund Commercial Building Completion Real Estate · October · High confidence by this October
    So, by this October we are completing another three building and then the two buildings will be left.

    — Parag Shah

International Ventures

  • US Projects Completion International Ventures · 2026-27 · High confidence around year 2026-27
    So, we expect around year 2026-27 we will be able to complete all the three projects

    — Parag Shah

  • US Projects Top Line International Ventures · 2026-27 · Medium confidence USD 500 million plus
    but it is around USD 500 million plus where we are 25% partner.

    — Parag Shah

  • US Projects Partnership Stake International Ventures · Ongoing · High confidence 25%
    Our participation will be 25%.

    — Parag Shah

Revenue

  • Revenue Growth Revenue · upcoming financial year · Medium confidence much better revenue growth overall in the top line and bottom line
    we are seeing a much better revenue growth overall in the top line and bottom line as well for the upcoming financial year.

    — Manan Shah

Profitability

  • Margin Sustainability Profitability · Ongoing · High confidence definitely sustainable
    The margins that you're seeing, yes, is definitely sustainable because the kind of projects that we've taken now stands at a very premium location in the city of Mumbai and will definitely contribute to a good margin.

    — Manan Shah

Risks & concerns

  • Real estate market oversupply in Mumbai

    medium

    Analyst raised concern about 'a lot of supply so oversupply is an issue' in Mumbai's real estate market.

    Analyst acknowledged

  • Regulatory and government approval delays in real estate projects

    medium

    Management noted that 'every year some government resolution comes, sometimes NGT problem comes, sometimes environment problem comes, sometimes the Supreme Court guidelines comes' which poses a risk, but stated their DM model mitigates this by reducing upfront land investment.

    Management acknowledged

Q&A highlights

3 direct
Demand for super high-rise towers and business development momentum for new projects. Direct
But the momentum is definitely looking strong. The inquiries that are coming in through the broker network which has been currently talking to us regarding this particular project is very strong and this tower has created his own impression in the market of South Mumbai, which is looking very fruitful for us in the near future.

Provides insight into the market reception for their premium projects and the company's outlook on future sales momentum.

Asked by Amit Agarwal

Company's strategy on taking up future redevelopment projects. Direct
So, as you see our prima facie forte has been redevelopment and we've been continuously taking redevelopment projects. The recent project that we acquired is also a redevelopment project in Ghatkopar East which is 10 societies getting clustered into one. So, yes, we would definitely be keen and taking more redevelopment projects in the future

Clarifies the company's continued strategic focus on redevelopment, which aligns with their asset-light business model and risk mitigation.

Asked by Neha

Cash flow visibility from US investments and the value of business additions in India. Direct
As far as the Miami business is concerned, Manan has already mentioned that we have around $30 million, which we had been invested in US out of that $15 million is already invested and we have a $15 million liquidity. But the same amount of money we will require for the projects which we've already acquired. And we are open to investing maybe up to more than $10-15 million if require in the near future.

Offers clarity on the financial commitment, liquidity position, and future investment plans for their international ventures, providing transparency on capital allocation.

Asked by Manish Otswal

2 min read 5 chapters

Detailed narrative

Strong Q1 FY24 Financial Performance

Man Infraconstruction reported robust Q1 FY24 results, with revenue from operations growing 45% year-on-year to ₹510 crore. EBITDA saw a significant 63% increase to ₹109 crore, while net profit more than doubled, jumping 112% to ₹82 crore. The company also reduced its financial costs by 36% to ₹9 crore and maintained a healthy liquidity of over ₹530 crore with secured debt at ₹136 crore as of June 2023.

Expanding EPC Order Book and Execution Pace

The EPC division secured a new large port order worth ₹680 crores from BMCT (PSA group) for Phase-2 infrastructure works at JNPT's 4th container terminal. This new order has strengthened the EPC order book to approximately ₹1,265 crores, providing revenue visibility for the next 2.5 to 3 years. Management highlighted commitment to delivering this new project within 2.5 years and noted being ahead of schedule on existing port projects.

Strategic Real Estate Portfolio Growth and Asset-Light Model

Man Infra's real estate portfolio now stands at approximately 4.6 million square feet, comprising 2 million square feet of ongoing projects and 2.6 million square feet of upcoming projects. A significant addition is an ultra-luxurious residential project in Ghatkopar East, Mumbai, with a salable carpet area of 4 lakh square feet and an estimated revenue potential of ₹1,200 crores over the next four years. The company continues to focus on an asset-light Joint Development Agreement (JDA) or Joint Venture (JV) model, which helps mitigate risk and reduce upfront investment.

Progress and Timelines for Ongoing Real Estate Projects

The company provided detailed updates on several ongoing projects, with many nearing completion. The Ghatkopar 'Aaradhya One Earth' and Mulund 'Atmosphere O2' towers D and E are expected to be delivered during the current financial year. The Dahisar 'Aaradhya Highpark' project is expected to complete its current phase by October end, while the Juhu project's RCC work is targeted for completion by March, followed by finishing in six months. New projects in Vile Parle and Ghatkopar are slated to commence by October-November.

International Ventures in the US Market

Through its subsidiary MICL Global, the company is collaborating with Marriott International on 'Edition Residences' in Fort Lauderdale, marking Marriott's first branded project there. Man Infra has invested approximately USD 15 million in the US projects and maintains USD 15 million in liquidity for future ventures. The company expects to complete all three US projects by 2026-27, with a projected top line of over USD 500 million, where MICL holds a 25% partnership.

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