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    Sanghvi Movers Q1 FY27 earnings call

    SANGHVIMOV
    Services·3 Aug 2026
    Management Summary

    Sanghvi Movers Limited reported a strong Q1 FY27 with significant top-line and bottom-line growth, driven by robust demand and a healthy order book. However, margins saw a sequential dip due to higher credit loss provisions and a shift in revenue mix towards lower-margin, asset-light businesses. The company maintains a strong balance sheet and is confident in its full-year guidance, with international operations showing promising early results despite temporary regional challenges.

    Highlights

    7

    • Revenue from operations for Q1 FY'27 was Rs. 380 crores, a growth of 39% compared to Rs. 273 crores in Q1 FY'26.

    • Total income grew 40% to Rs. 393 crores against Rs. 281 crores in Q1 FY'26.

    • EBITDA was Rs. 139 crores, a 30% growth from Rs. 107 crores in Q1 FY'26, with a margin of 35%.

    • Profit after tax increased 30% to Rs. 65 crores against Rs. 50 crores in Q1 FY'26.

    • Secured order book of almost Rs. 1,250 crores provides strong revenue visibility for the financial year.

    • Gross debt-to-equity stood at 0.54 times against the guided FY ceiling of 0.72 times, indicating healthy financial leverage.

    • Middle East business achieved cumulative EBITDA positive performance in its first year of operation.

    Concerns

    3

    • EBITDA margin declined sequentially from 40% in Q4 FY'26 to 35% in Q1 FY'27, primarily due to higher expected credit loss provisions (Rs. 6.2 crores) and a change in revenue mix.

    • Core crane rental EBITDA margin moved from 53% in FY'26 to 47% in Q1 FY'27, a 6% point drop.

    • Group Days Sales Outstanding (DSO) stood at 116 days, with GCC business at 201 days, reflecting temporary disruptions in West Asia.

    Key financials

    Single quarter

    06 metrics
    1. 01Revenue from Operations₹380 Cr+39%YoY
    2. 02Total Income₹393 Cr+40%YoY
    3. 03EBITDA₹139 Cr+30%YoY
    4. 04EBITDA Margin35%
    5. 05Profit After Tax₹65 Cr+30%YoY

    Segment breakdown

    Crane Rental
    60% Revenue Contribution53% Core EBITDA Margin (FY26)47% Core EBITDA Margin (Q1 FY27)
    Renewable E&C
    37% Revenue Contribution
    Project EPC
    3% Revenue Contribution
    GCC Business
    ₹19 Cr Total Income23% EBITDA Margin86% Utilization4.1% Yield
    India Business
    86% Utilization2.3% Yield
    List

    Capital allocation

    3
    high confidence
    CategoryHeadline
    Capex

    ₹92 crores this quarter · ₹652 crores (FY27) planned

    Debt

    Debt disclosed

    Liquidity

    Cash ₹300 crores

    Company has a treasury surplus of over Rs. 300 crores, contributing to an effective net debt-to-equity in the range of 0.3 to 0.7. Also, zero working capital draw in the Kingdom of Saudi Arabia.

    Guidance & targets

    9
    CategoryTargetPriority
    Revenue
    Consolidated Revenue
    ₹1,400-1,500 crores
    		High
    Revenue
    Revenue increase from CAPEX
    15%
    		Medium
    Revenue
    Revenue Growth
    30-40%
    		Medium
    Profitability
    EBITDA
    ₹525-575 crores
    		High
    Profitability
    Blended Return on Capital
    16.25-16.5%
    		High
    Profitability
    EBITDA Growth
    20-30%
    		Medium
    Profitability
    E&C Business EBITDA Margin
    12-15%
    		Medium
    Profitability
    KSA Rental Yield
    4%
    		High
    Debt
    Debt-to-Equity Ratio (Gross)
    0.72
    		High

    What to watch in Q2 FY27

    5

    ECL provision normalization

    Over the course of the financial year
    CurrentRs. 6.2 crores in Q1 FY27
    TargetNormalization as debtors are recovered

    Why it matters

    Normalization of ECL provisions is crucial for margin recovery and improved profitability.

    So, the ECL provision is expected to normalize📎 in the course of the financial year as we recover debtors which has basically aged.

    Risks & concerns

    5
    RiskSeverity

    Higher expected credit loss provisions

    Rs. 6.2 crores in Q1 FY27 driven by aging of receivables, expected to rationalize over the year. — Management acknowledged

    medium

    Mark-to-market reinstatement of foreign currency loan

    Rs. 1.4 crores, non-cash accounting entry. — Management downplayed

    low

    Optical dilution of reported margin due to revenue mix change

    Serving incremental demand through higher ancillary equipment and cross-rental of cranes, which are lower percentage margin but consume no capital, thus accretive to ROCE. — Management acknowledged

    medium

    Temporary disruption in West Asia impacting GCC DSO

    GCC business DSO stood at 201 days due to regional situation, but collections improved in July. — Management acknowledged

    medium

    Execution delays in E&C business

    Delays from client side (site readiness, OEM supply, ROW issues) or internal challenges can slow revenue recognition and suppress margins. — Management acknowledged

    medium

    Q&A highlights

    8

    “As we open international markets throughout the world, our role transforms from being a crane rental company to a capital allocator. There are several factors that determine whether we will invest a dollar of CAPEX in a particular market. Primarily, what is the inquiry pipeline? What is the order visibility? What do we need to do? What is the order duration? What is the look ahead visibility for a crane? What do we need to do in order to secure our market share in that particular market? What is the internal hurdle rate for making an investment in a particular crane?”

    Analyst questioned the strategic rationale for CAPEX deployment between India and KSA, prompting management to explain their capital allocation framework based on inquiry pipeline, order visibility, and internal hurdle rates.

    asked by Vivek Rakholiya

    3 min read6 chapters

    Detailed Narrative

    01

    Strong Financial Performance in Q1 FY27

    Sanghvi Movers Limited reported robust financial growth in Q1 FY27. Revenue from operations increased by 39% year-over-year to Rs. 380 crores, while total income grew 40% to Rs. 393 crores. EBITDA for the quarter stood at Rs. 139 crores, marking a 30% increase from the previous year, with an EBITDA margin of 35%. Profit after tax also saw a 30% rise, reaching Rs. 65 crores, and cash profit was Rs. 104 crores.

    02

    Margin Compression and Underlying Factors

    Despite strong top-line growth, the core crane rental EBITDA margin decreased from 53% in FY26 to 47% in Q1 FY27, a 6% point drop. This was attributed to four main components: Rs. 6.2 crores in higher expected credit loss provisions, Rs. 1.4 crores from non-cash mark-to-market reinstatement of foreign currency loans, one-time📎 incentives paid to employees for surpassing Rs. 1,000 crores top line in FY26, and a change in revenue mix towards higher ancillary equipment and cross-rental of cranes. Management noted that the latter, while optically dilutive to margins, is accretive to ROCE as it consumes no capital.

    03

    Strategic Capital Allocation and Debt Management

    The company's capital allocation strategy focuses on judicious deployment to maintain group ROCE and meet internal IRR criteria. For FY27, a CAPEX pool of Rs. 652 crores has been approved, with Rs. 92 crores already capitalized in Q1 and the remaining Rs. 560 crores to be deployed in the second half. This investment is expected to increase revenue by approximately 15% in FY27. The gross debt-to-equity ratio stood at a healthy 0.54 times against a guided FY ceiling of 0.72 times. With a treasury surplus of over Rs. 300 crores, the effective net debt-to-equity is in the range of 0.3 to 0.7.

    04

    International Expansion and GCC Performance

    The Middle East business achieved cumulative EBITDA positive performance in its first year of operation, a significant milestone. The GCC business reported a utilization of 86% and a yield of 4.10%, with total income of Rs. 19 crores and an EBITDA margin of 23%. Despite a higher Days Sales Outstanding (DSO) of 201 days in GCC due to regional disturbances, management reported improved collections in July and zero working capital draw in Saudi Arabia. The company plans to add more depots in GCC countries, including Saudi Arabia and Qatar, as part of its strategic expansion.

    05

    Renewable E&C Business (Sangreen) and Order Book

    The renewable E&C business contributed 37% of revenue from operations in Q1 FY27. This asset-light, high ROCE business complements the core crane rental operations. The company has a secured order book of almost Rs. 1,250 crores, providing strong revenue visibility for the current financial year. The inquiry pipeline stands at Rs. 5,600 crores across multiple sectors, giving confidence in sustained business momentum. The E&C business is expected to achieve an EBITDA margin of 12-15% going forward⏳.

    06

    Outlook and Future Growth Targets

    Sanghvi Movers reiterated its FY27 consolidated revenue guidance of Rs. 1,400 crores to Rs. 1,500 crores and EBITDA guidance of Rs. 525 crores to Rs. 575 crores, with a blended return on capital of 16.25% to 16.5%. For FY28, the company projects revenue growth of 30-40% and EBITDA growth of 20-30%, targeting EBITDA of Rs. 650 crores to Rs. 700 crores. Management expressed confidence in doubling the E&C business revenue annually for the next three years, leveraging its execution capabilities and market opportunities.

    This is an AI-generated summary of a publicly available earnings call transcript.