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    PSP Projects Limited

    PSPPROJECT
    Construction·23 May 2025
    Management Summary

    PSP Projects faced a challenging FY25 with flat revenue and significant profit compression in Q4, largely due to project delays and one-time costs associated with UP projects. Despite these headwinds, the company secured its highest ever order book and inflow, providing a strong foundation for anticipated growth in FY26, particularly from Adani Group projects. Management is focused on execution and aims for improved profitability and normalized working capital in the coming year.

    Highlights

    5

    • Highest ever outstanding order book of ₹7,266 crores as of March 31, 2025, representing a 20% YoY growth.

    • Achieved highest ever order inflow of ₹3,506 crores (excluding GST) during FY25.

    • Adjusted EBITDA margin for FY25 was 9.7%, reflecting underlying operational strength after excluding one-time costs.

    • Company expects FY26 revenue to exceed ₹3,000 crores, with order inflow targeted between ₹4,000-5,000 crores, primarily from Adani Group projects.

    • Completed 13 projects in FY25, including SVKM's NMIMS Institute and multiple medical colleges.

    Concerns

    5

    • FY25 was a difficult year with muted revenue growth, remaining similar to FY24 at ₹2,468 crores, missing desired growth guidance.

    • EBITDA for Q4 FY25 decreased by 41% YoY to ₹30 crores, with EBITDA margin at 4.65% compared to 7.98% in Q4 FY24.

    • Net profit for Q4 FY25 reduced by 68% YoY to ₹4.8 crores, with PAT margin at 0.7% compared to 2% in Q4 FY24.

    • Incurred additional costs of ₹62 crores in FY25, primarily due to 7 UP projects, impacting profitability.

    • Working capital days increased to 65 days in FY25 from a range of 30-35 days previously, driven by higher receivables and inventory.

    What Changed2

    vs Q2 FY26

    Guidance items6 → 7 (+1)Risks discussed6 → 4 (-2)
    Key financials

    Metrics

    8

    Periods

    2

    Q4 FY25

    5
    • Revenue
      ₹655 Cr
      YoY+1%
    • EBITDA
      ₹30 Cr
      YoY-41%
    • EBITDA Margin
      4.7%
    • Net Profit
      ₹4.8 Cr
      YoY-68%
    • PAT Margin
      70%

    FY25

    3
    • Revenue
      ₹2,468 Cr
      YoY0%
    • EBITDA
      ₹178 Cr
    • Adjusted EBITDA Margin
      9.7%

    Order Book

    high confidence

    Total Value

    ₹ 7,266 crores

    as of 2025-03-31

    quantified
    20.0% YoY

    Composition

    Mix2 client types
    • Adani projects25.0%
    • Non-Adani projects75.0%

    Share of order book by client type

    Pipeline

    qualified rfp

    Bid book includes various projects across residential, temple, dairy, riverfront, educational, corporate house, township, museum, and industrial plant sectors.

    "Management noted that while the order book and inflow are at record highs, this has not yet translated into revenue growth due to project delays."

    Source:
    Prepared remarks

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹16 crores

    Debt

    Debt disclosed

    Liquidity

    Undrawn ₹496 crores

    Total fixed deposits of Rs.265 crores, with Rs.60 crores lien-free, Rs.180 crores under lien with banks for credit facilities, and Rs.25 crores as security deposit to clients.

    Guidance & targets

    7
    CategoryTargetPriority
    Revenue
    Revenue from operations
    more than ₹3,000 crores
    		Medium
    Revenue
    Revenue from operations
    ₹3,000-4,000 crores
    		Medium
    Margin
    EBITDA Margin
    8-9%
    		Medium
    Capex
    Capex as % of revenue
    3-4%
    		Medium
    Order Inflow
    Order Inflow
    ₹4,000-5,000 crores
    		High
    Order Inflow Composition
    Adani Group share of Order Inflow
    80-90%
    		High
    Order Book Conversion
    Conversion of current order book to revenue
    30-40%
    		Medium

    FY26 Revenue Guidance Update

    End of Q1 FY26
    CurrentOver ₹3,000 crores (preliminary)
    TargetClear guideline on number

    Why it matters

    Management stated they would provide a clearer FY26 revenue guideline after Q1, which will indicate the pace of Adani project execution.

    We expect to close FY26 with more than INR3,000 crores of revenue, but I will be in a better position to give you a number by end of this 1st quarter as most of the Adani projects which we have started are at the stage of diaphragm walls or excavations.

    How to verify

    guidance_and_targets

    Risks & concerns

    4
    RiskSeverity

    Project delays and muted revenue growth

    FY25 revenue growth was muted due to delays in projects like Dharoi Dam, Fintech building, GBRC, SRFDCL, GBC, SMC, and Science city, resulting in a revenue impact exceeding ₹300 crores. — Management acknowledged

    high

    Profitability pressure from UP projects

    EBITDA declined in FY25 due to ₹62 crores in additional costs associated with 7 UP projects, which were in their closure and handover phase. — Management acknowledged

    high

    Increased working capital days and slow-moving receivables

    Working capital days increased to 65 days in FY25 from 30-35 days, primarily due to higher receivables from government projects (Pandharpur, SDB, UP, Ahmedabad Municipal Corporation) and inventory. — Management acknowledged

    medium

    Personnel attrition

    Two long-standing key managerial personnel left voluntarily due to workload pressure from Adani projects, but management stated no impact on company's role or execution pace. — Analyst downplayed

    low

    Q&A highlights

    7

    “So I personally see that we'll be in a better position to execute the project because now we are solely dependent on the management of the Adani Group, who also wish that their project should move on a fast track without any hinderance.”

    Analyst sought clarity on the drastic change expected in FY26 after a difficult FY25, and management highlighted the shift to Adani Group projects as a key driver for improved execution and growth.

    asked by Navid Virani

    3 min read6 chapters

    Detailed Narrative

    01

    Q4 & FY25 Performance Overview

    PSP Projects reported a challenging Q4 FY25, with revenue from operations marginally increasing by 1% YoY to ₹655 crores. However, EBITDA declined significantly by 41% YoY to ₹30 crores, resulting in an EBITDA margin of 4.65%. Net profit for the quarter was ₹4.8 crores, a 68% YoY reduction, with a PAT margin of 0.7%. For the full year FY25, revenue from operations remained flat at ₹2,468 crores compared to FY24, missing the company's growth guidance. The full-year EBITDA was ₹178 crores, down from ₹260 crores in FY24.

    02

    Order Book and Inflow Highlights

    Despite the muted revenue growth, PSP Projects achieved its highest ever outstanding order book of ₹7,266 crores as of March 31, 2025, marking a 20% YoY growth. The company also secured its highest ever order inflow of ₹3,506 crores (excluding GST) during FY25. Approximately 25% of the current outstanding order book comprises Adani projects. The bid book currently stands at ₹7,100 crores, including significant projects like a ₹2,300 crore township at Mundra and a ₹1,200 crore dairy development work.

    03

    Profitability Challenges and Adjustments

    The decline in profitability during FY25 was primarily attributed to additional costs of ₹62 crores incurred on 7 UP projects, which were in their closure and handover phase. Excluding these one-time📎 expenses, the adjusted EBITDA margin for FY25 would have been 9.7%, aligning with the company's core operational strength. Management noted that various project delays, including Dharoi Dam, Fintech building, and Science City, contributed to a revenue impact exceeding ₹300 crores, further affecting profitability.

    04

    Working Capital and Receivables

    Working capital days increased to 65 days in FY25, up from the historical range of 30-35 days. This was mainly due to an increase in receivables, which grew from ₹335 crores last year to over ₹500 crores, primarily from government projects. Specific slow-moving receivables include ₹17 crores from Pandharpur, ₹90 crores from SDB (expected by October '25), ₹40 crores from UP, and ₹98 crores from Ahmedabad Municipal Corporation. Inventories remained at par with the previous year, around ₹300 crores, with ₹21 crores attributed to precast finished goods.

    05

    FY26 Outlook and Adani Group Focus

    Management expressed confidence in a stronger FY26, projecting revenue to exceed ₹3,000 crores, with a more precise guidance expected after Q1 FY26. The order inflow target for FY26 is set between ₹4,000-5,000 crores, with 80-90% expected from the Adani Group. The EBITDA margin is guided to stabilize in the range of 8-9%, a slight revision from the previous 9-10% guidance due to current industry conditions. Capex for FY26 is expected to be 3-5% of revenue, potentially higher due to large Adani projects.

    06

    Project Updates and Delays

    Several projects experienced delays in FY25, including Dharoi Dam, Fintech building at GIFT city, GBRC, SRFDCL, GBC, and Science city, impacting revenue. However, major projects like the Coca-Cola project are progressing on a fast track. Most of the issues with UP projects are now resolved, with only two medical colleges still ongoing. The company has initiated projects in Dharavi and at MIAL, including a ₹50 crore building at Terminal T1, and is discussing two additional Dharavi-related projects.

    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.