Skipper Limited — Q4 FY25 earnings call

Call held 30 Apr 2025

Management summary

Skipper Limited delivered a record-breaking performance in Q4 and FY25, driven by strong growth in both domestic and export markets and improved execution. The company achieved its highest ever revenue and profitability, with significant order inflows leading to a robust order book. Strategic capacity expansions and a focus on higher-margin segments, including a breakthrough in the U.S. market, position Skipper for continued growth and improved financial health in the coming years.

Highlights

  • Q4 FY25 Revenue of ₹1,288 crores, reflecting 11.6% sequential growth.

  • Q4 FY25 EBITDA stood at ₹123 crores, up 14% year-on-year.

  • Q4 FY25 EBITDA margins expanded to 9.6% versus 9.4% in Q4 FY24.

  • Q4 FY25 Consolidated PAT increased to ₹47.9 crores, registering 90% growth year-on-year.

  • FY25 Annual Revenue reached ₹4,624 crores, a robust 41% growth year-on-year.

  • FY25 Annual Consolidated PAT surged 83% year-on-year to ₹149 crores.

  • Closing Order Book as of March 31, 2025, was ₹7,458 crores, up 20% year-on-year.

  • Net debt reduced by ₹111 crores year-on-year to ₹1,016 crores.

Key financials

2 periods

Headline

  • Revenue
    ₹1,288 Cr
    YoY +11.6%
  • EBITDA
    ₹123 Cr
    YoY +14%
  • EBITDA Margin
    9.6%
  • PAT
    ₹47.9 Cr
    YoY +90%
  • PAT Margin
    3.7%
  • Order Book (Mar 31, 2025)
    ₹7,458 Cr
    YoY +20%

FY25

  • Annual Revenue
    ₹4,624 Cr
    YoY +41%
  • Annual PAT
    ₹149 Cr
    YoY +83%
  • Net Debt
    ₹1,016 Cr
  • RoCE
    21.7%

What they filed

Q1 FY27: revenue up 4.5%, net profit up 26.7% against the same quarter last year.

₹ Cr · quarterly
Line itemQ2 FY25Q3 FY25Q4 FY25Q1 FY26Q2 FY26Q3 FY26Q4 FY26Q1 FY27
Revenue1,110 1,135 1,288 1,254 1,262 +14%1,371 +21%1,667 +29%1,310 +4%
EBITDA111 111 124 127 131 +18%141 +27%173 +40%140 +10%
Net profit33 36 48 45 37 +12%53 +47%78 +63%57 +27%
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.

Segment breakdown

SegmentQ4 FY25 RevenueQ4 FY25 GrowthFY25 RevenueFY25 Growth
Engineering Business₹937 Cr34%₹3,518 Cr58%
Polymer Business₹138 Cr34%——
Infrastructure Segment——₹674 Cr13%

Guidance & targets

Capacity

  • New capacity operational Capacity · within Q1 FY26 · High confidence 75,000 tons
    So part of the capacity is already online and the full capacity of 75,000 will be available to us within quarter 1.

    — Sharan Bansal

  • New capacity utilization (75,000 MTPA) Capacity · by Q3 FY26 · High confidence 80% to 85%
    So maybe by quarter 3 itself, we will be able to achieve 80%, 85% capacity utilization, which is the optimal capacity utilization for any capacity.

    — Sharan Bansal

Revenue

  • Revenue from new capacity Revenue · from Q2 FY26 onwards · High confidence N/A
    Yes, yes. We should be able to see it from quarter 2 onwards itself.

    — Sharan Bansal

  • Overall revenue growth Revenue · next 2 to 3 years · High confidence 20% to 25%
    We will continue to target about 20% to 25% growth even on this elevated base.

    — Sharan Bansal

Order Inflow

  • Bidding pipeline Order Inflow · N/A · High confidence ₹20,000 crores+
    Our bidding pipeline is now INR20,000 crores plus.

    — Sharan Bansal

  • Success rate from bidding pipeline Order Inflow · N/A · High confidence Minimum 25%
    And in the past, we have seen a minimum 25% success rate.

    — Sharan Bansal

Profitability

  • Finance cost as percentage of sales Profitability · FY26 · High confidence Closer to 4%
    So we believe that now for the full year, we should -- for the full year FY '26, we should be coming closer -- this declining trend should continue, and we should be coming closer to a 4% kind of a finance cost based on revenue.

    — Sharan Bansal

Working Capital

  • Customer advances expected Working Capital · Q1 FY26 · High confidence ₹200 crores
    About INR200 crores of advances, which we were expecting to come in, in March, they have spilled over to April.

    — Sharan Bansal

  • Inventory cycle reduction Working Capital · N/A · High confidence Further reduction from 95 days
    There is further opportunity to bring this down further.

    — Sharan Bansal

Revenue - Polymer

  • Polymer segment growth Revenue - Polymer · FY26-FY27 · Medium confidence 25% to 30%
    I think on the polymer side, we can expect a little higher growth between 25% to 30%.

    — Sharan Bansal

Capex

  • Fresh capex for capacity addition Capex · FY26 · High confidence Another 75,000 tons
    We will be adding a further amount of 75,000 tons this year also.

    — Sharan Bansal

  • Capex amount for 75,000 tons expansion Capex · FY26 · High confidence ₹200 crores
    So this will be again a brownfield kind of an expansion, sir, with maybe INR200 crores kind of a capex?

    — Sharan Bansal

  • Overall capex guidance Capex · next 4 years (₹200 crores per annum) · High confidence ₹800 crores
    Yes, it largely remains the same.

    — Sharan Bansal

Dividend

  • Dividend outflow Dividend · FY25 · High confidence ₹1.5 crores
    So it will be about INR1.5 crores this year.

    — Sharan Bansal

Market Share

  • High-voltage transmission line segment market share Market Share · N/A · High confidence Approximately 15%
    It's approximately 15% in the high-voltage transmission line segment.

    — Sharan Bansal

Industry Outlook

  • Transmission capex demand Industry Outlook · next 2 decades · High confidence Continue for next 2 decades
    Sir, I can tell you that based on our estimation, the transmission capex will continue at least for the next 2 decades, while the world moves towards net-zero and renewable becomes more and more of a preferred source for power generation.

    — Sharan Bansal

Risks & concerns

  • Reduction in Jal Jeevan Mission project size

    medium

    Analyst mentioned a 46% slash in JJM project size. Management confirmed a 'major dip in revenue' from JJM but stated they are reducing dependency and focusing on plumbing/retail.

    Analyst acknowledged

  • Industry headwinds and low margins in Polymer business

    medium

    Analyst noted the Polymer industry suffering from low margins. Management acknowledged headwinds but stated they maintained revenue through retail growth and expect better times ahead.

    Analyst acknowledged

  • Underachievement in transmission line and substation additions vs targets in FY25

    low

    Analyst pointed out FY25 additions were not according to targets. Management explained this as a timing issue, with major additions expected from FY26 and picking up pace in FY27 due to the 18-24 month build cycle.

    Analyst explained

Q&A highlights

2 direct
Status of Polymer business demerger plan Partial
As of now, there is no further decision on that front. We are our Polymer business continues to grow well, and we are looking at good growth in this business in the coming years as well. As and when, of course, a decision will be taken, we will subsequently inform you. But as of now, there is no decision regarding demerger.

Clarifies that the demerger plan for the Polymer business has not been announced or proceeded with, indicating a focus on current business growth.

Asked by Moksh Ranka

U.S. market order size, bid pipeline, and margins Direct
It's about $15 million, 1-5. ... The bid pipeline in the U.S. market is close to about $150 million. ... normally, exports do come with better margins. And because this is exports to developed countries like North America, there, the opportunity for margins are even higher... we can expect that these orders come at about at least 2% better margin than domestic products.

Provides specific financial details on the company's new strategic entry into the U.S. market, including initial order value, potential pipeline, and expected margin uplift.

Asked by Dhiral / Mahesh Atal

Inventory cycle compared to peers and reasons for difference Direct
Sir, if you see the inventory cycle from previous year, 135 days, we have brought it down to 95 days. There is further opportunity to bring this down further. However, when you compare us to peers, do keep in mind that we are the only ones having backward integrated operations. So our inventory it also is burdened with that fact that we have to maintain extra inventory because we are backward integrated.

Explains the company's inventory management and why its inventory days might be higher than peers due to its backward integrated and EPC-heavy business model.

Asked by Mehul Mehta

3 min read 7 chapters

Detailed narrative

Record-Breaking Q4 and FY25 Performance

Skipper Limited delivered its highest ever quarterly revenue of INR1,288 crores in Q4 FY25, reflecting an 11.6% sequential growth. EBITDA for the quarter stood at INR123 crores, up 14% year-on-year, with margins expanding to 9.6%. Consolidated PAT surged by 90% year-on-year to INR47.9 crores, improving PAT margins to 3.7%. For the full fiscal year FY25, the company achieved a record annual revenue of INR4,624 crores, a robust 41% growth over FY24, and an 83% increase in consolidated PAT to INR149 crores.

Strong Order Book and Inflows

The company reported its highest ever annual order inflow of INR5,335 crores in FY25, with INR1,592 crores booked in Q4 alone. The closing order book as of March 31, 2025, stood at INR7,458 crores, representing a 20% year-on-year increase and providing robust revenue visibility for the next 18 to 24 months. The current bidding pipeline is over INR20,000 crores, with management expecting a minimum 25% success rate.

Capacity Expansion and Digital Transformation Initiatives

Skipper's 75,000 tons capacity expansion is on track and expected to be fully operational by Q1 FY26, with revenue contributions anticipated from Q2 onwards. The company plans to add another 75,000 tons capacity this year (FY26) through a brownfield/greenfield expansion, involving an estimated capex of INR200 crores. This aligns with the overall capex guidance of INR800 crores over the next four years. Additionally, the implementation of SAP S/4HANA RISE is underway to streamline operations and enhance efficiency.

Strategic Growth in Polymer Business

The Polymer business delivered its highest ever quarterly revenue of INR138 crores, marking a 34% year-on-year growth. This was driven by increased focus on the plumbing segment, an enhanced retail distribution network, and product diversification. Management anticipates a 25-30% growth in the Polymer segment for FY26-FY27 and has secured necessary approvals to foray into the gas pipeline segment with MDP pipes, leveraging existing HDP infrastructure.

Expanding Export Footprint, Including U.S. Market Breakthrough

Export revenue grew by 21% to INR770 crores in FY25, constituting 22% of the overall Engineering segment business. Skipper achieved a landmark breakthrough in the U.S. market by securing a multi-million dollar coal supply order worth $15 million. The current U.S. bid pipeline is approximately $150 million, and management expects these export orders to yield at least 2% better margins than domestic products, capitalizing on the 'China Plus One' narrative.

Improved Capital and Debt Management

Despite a significant 41% increase in revenue, Skipper successfully reduced its net debt (including interest-bearing acceptances) by INR111 crores year-on-year, bringing it down to INR1,016 crores. The Return on Capital Employed (RoCE) improved to 21.7% in FY25 from 19.1% in the previous year, demonstrating enhanced capital efficiency. The company aims to further improve its working capital days and reduce finance cost as a percentage of sales to closer to 4% for FY26.

Positive Outlook and Long-Term Transmission Demand

Management projects an overall revenue growth of 20-25% for the next 2-3 years, including the Infrastructure segment, building on the elevated base. They expressed strong optimism regarding the long-term demand for transmission infrastructure, estimating that transmission capex will continue for at least the next two decades. This sustained demand is driven by global moves towards net-zero and the increasing adoption of renewable energy sources.

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