GuruFocus -
- H1 FY25 Revenue: INR1,088 crores, up 28% from INR862 crores in H1 FY24.
- H1 FY25 EBITDA: INR217 crores, up 42% from INR153 crores in H1 FY24.
- H1 FY25 EBITDA Margin: 19.7%, up from 17.6% in H1 FY24.
- H1 FY25 EBIT: INR173 crores, up 71% from INR101 crores in H1 FY24.
- H1 FY25 EBIT Margin: 16.1%, up from 11.6% in H1 FY24.
- H1 FY25 PAT: INR98 crores, up 153% from INR39 crores in H1 FY24.
- H1 FY25 PAT Margin: 8.9%, up from 4.5% in H1 FY24.
- Q2 FY25 Revenue: INR518 crores, up 23% from INR422 crores in Q2 FY24.
- Q2 FY25 EBITDA: INR101 crores, up 30% from INR77 crores in Q2 FY24.
- Q2 FY25 EBITDA Margin: 19.3%, up from 17.7% in Q2 FY24.
- Q2 FY25 EBIT: INR79 crores, up 60% from INR50 crores in Q2 FY24.
- Q2 FY25 EBIT Margin: 15.2%, up from 11.4% in Q2 FY24.
- Q2 FY25 PAT: INR45 crores, up 126% from INR20 crores in Q2 FY24.
- Q2 FY25 PAT Margin: 8.6%, up from 4.5% in Q2 FY24.
- Gross Debt: INR343 crores as of September 30, 2024, unchanged from March 31, 2024.
- Gross Debt-to-Equity Ratio: 0.21x.
- Order Book: INR9,203 crores as of September 30, 2024, with 73% from public sector and 27% from private sector.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Capacit'e Infraprojects Ltd (BOM:540710) reported a 28% year-on-year revenue growth for H1 FY25, indicating strong operational performance.
- The company achieved a significant improvement in margins, with EBITDA up by 42% and PAT up by 153% compared to H1 FY24.
- The order book is robust, with significant traction from both private and public sectors, totaling INR9,203 crores as of September 30, 2024.
- Capacit'e Infraprojects Ltd has successfully optimized its project portfolio, leading to enhanced management efficiencies and improved margin profiles.
- The company is in a strong financial position, with a gross debt-to-equity ratio of 0.21x, and is poised for further growth with a diversified order book.
- The working capital days have increased to nearly 200 days post-COVID, compared to less than 100 days pre-COVID, indicating potential liquidity challenges.
- There is a significant reliance on government projects, which now constitute 73% of the order book, potentially exposing the company to risks associated with government spending slowdowns.
- The company has faced issues with receivables, including a write-off of INR112 crores, primarily from clients affected during COVID, which could impact cash flows.
- There are concerns about the increase in unbilled revenue, which has been rising over the past couple of years, potentially affecting cash flow management.
- Employee expenses have risen sequentially, which could impact profitability if not managed effectively.
A: Rohit Katyal, Executive Director, explained that the company aims to maintain a dynamic balance between private and government projects. While the current order book is heavily skewed towards government projects, recent private sector orders have slightly improved the balance. The company prioritizes the quality of clients and remains committed to achieving a 100-day net working capital by the fiscal year-end.
Q: What is the status of the Signature Global order, and when will execution begin?
A: Execution for the Signature Global order will commence in Q4 of the current fiscal year. The project is divided into two phases, with Phase 1 starting in the first quarter and Phase 2 in the second quarter of the next fiscal year. The project is expected to peak at INR25-30 crores per month.
Q: Can you provide details on the INR112 crores receivables write-off mentioned in the FY24 annual report?
A: The write-offs, primarily from the Radius Group, were due to clients facing difficulties during COVID. The company has aggressively provisioned for expected credit losses, totaling over INR180 crores, to avoid future surprises. Capacit'e is actively pursuing legal avenues to recover assets worth over INR200 crores, which will positively impact the balance sheet over the next seven to eight quarters.
Q: What is the current status of the MHADA projects, and how do you see execution progressing?
A: The execution run rate for MHADA projects was INR50 crores in October, expected to increase to INR65 crores by December and INR75 crores by January. The company has received land for several towers and expects execution to significantly increase, crossing INR100 crores per quarter from the next financial year.
Q: How does Capacit'e Infraprojects view the potential impact of economic slowdown and government spending on infrastructure projects?
A: Rohit Katyal stated that despite media reports of a slowdown, the company sees no tangible impact on project approvals or execution pipelines. Government spending remains robust, and the company anticipates a shortage of quality contractors, indicating strong demand in both public and private sectors.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.