Man Infra

Man Infraconstruction reported Q2 FY24 revenue from operations at INR215 crores, a significant 46.4% decline YoY from INR401 crores in the previous year, primarily due to revenue recognition cycles. Despite this, H1 FY24 EBITDA grew 8.1% YoY to INR174 crores, and net profit for H1 FY24 jumped 65.2% YoY to INR152 crores. Q2 FY24 net profit also saw a robust 32.1% YoY increase to INR70 crores. The company maintained a net cash positive balance sheet with over INR600 crores in liquidity as of September 2023 and declared a total dividend of INR1.08 per equity share for FY23-24.

The company launched 'Aaradhya Avaan' in Tardeo, South Mumbai, an ultra-luxury residential tower with an estimated revenue potential of over INR3,000 crores. They also acquired a redevelopment project in Ghatkopar East (10 societies) with a revenue potential exceeding INR1,200 crores over the next four years, and a large 10-acre project in Goregaon West, expected to generate over INR4,000 crores in revenue over five years. These new projects significantly expand MICL's real estate portfolio to 5.9 million square feet of RERA carpet area.

In H1 FY24, MICL achieved sales of 92,000 square feet of carpet area with a value of INR235 crores, and collections of INR465 crores. The company emphasized its strength in having zero inventory for completed portions of 'Aaradhya One Earth' at Ghatkopar East and negligible inventory (90%+ sold) for the two delivered towers of Atmosphere O2 at Mulund West. Management clarified that sales from new DM model projects like Tardeo, with an estimated sale value of INR3,500-4,000 crores, will reflect as 12.6% DM fees on the balance sheet rather than full project revenue.

The EPC division's order book stood at INR1,156 crores as of September 2023, encompassing over 110 hectares of port work and 4.8 million square feet of other infrastructure residential works. MICL has executed over INR1,000 crores of work for the BMCT port project and received nearly INR1,000 crores in collections. The company also added a PMC contract for the Aaradhya Avaan project, covering 18 lakh square feet of construction area, further diversifying its EPC revenue streams.

Management expressed a very bullish outlook on the Indian real estate market, citing India's economic resilience, increased disposable income, and rising aspirations for home ownership as key demand drivers. They noted that increased income is offsetting higher interest rates. The company's strategy focuses on financial discipline, timely project completions, and maintaining a healthy balance sheet. They specifically avoid highly competitive infrastructure segments like roads due to thin margins, preferring higher-margin real estate and port projects.

MICL has invested approximately $29.5 million in three to four real estate projects in Florida, USA. Management expects revenue from these US market investments to start coming in within two years, with the entire investment becoming free within four years. However, the company is not intending to invest significantly more in the US market at this moment, believing that the Indian market offers much better opportunities for growth and returns.