GPT INFRAPROJETCS LTD (NSE: GPT) Q2 2025 Earnings Call dated Nov. 13, 2024
Corporate Participants:
Atul Tantia — Executive Director & Chief Financial Officer
Analysts:
Parth Kotak — Analyst
Kashvi Chandgothia — Analyst
Shivam Revankar — Analyst
Bhavik — Analyst
Nishant Gupta — Analyst
Ankit Shah — Analyst
Akhilesh Gandhi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to GPT Infraprojects Limited Q2 and H1 FY ’25 Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions].
Before we begin, I would like to state that this conference call may contain forward-looking statements about the company, which are based completely on the company’s beliefs, opinions and expectations as of today. The statements made in today’s calls are not a guarantee of future performance and involve risks and uncertainties that are difficult to predict. The company also undertakes no obligation to update any forward-looking statements to reflect development that occur after the statement is made.
I now hand the conference over to Mr. Atul Tantia, Executive Director and CFO. Thank you, and over to you, sir.
Atul Tantia — Executive Director & Chief Financial Officer
Good morning, everyone, and a warm welcome to the GPT Infraprojects Limited second quarter ended September 30, 2024 earnings conference call. I hope you all had the opportunity to review the financials as well as the presentation uploaded on the website of the stock exchanges as well as our website yesterday. I will briefly cover the key highlights for the quarter. Joining us on the call today is also Stellar IR, our Investor Relations Advisors.
Some of the key significant milestones during the quarter and the half-year ended September 30, 2024. We successfully completed a fundraise through a QIP of INR175 crores on August 29, 2024. This was done within 55 days of the Board approval by placement of shares to marquee investors showing continuous interest in the company. The issue saw a demand of almost 2.5 times from the investors. I want to extend my heartfelt thanks to our BRLMs, Motilal Oswal, Legal Counsels, Crawford Bayley, the stock exchanges and the investors who placed trust in us and contributed to the success of our QIP. I would also like to thank the internal team at GPT, who worked day and night to ensure the success of the QIP within two months.
In the first week of July 2024, we completed our third bonus issue of 1:1 in the last seven years, thus strengthening the capital base of the company and providing liquidity to the investors. As for the execution cycle, continued execution of the order book witnessed a strong growth in top line numbers while also maintaining the EBITDA margin above our hurdle rate of 13% and we are on track to reduce — to achieve a 20% to 25% growth for the full year. We have substantially reduced our debt by almost INR95 crores in this quarter.
The first interim dividend of FY ’24-’25 of INR1 per share has also been announced by the Board, thus rewarding the shareholders for the performance of the company, which is also in line with the dividend policy of the company. The net proceeds of INR169.6 crores from the QIP have been fully utilized as per the shareholder approval without any deviations. A substantial portion of which was used to repay the outstanding borrowings, while the remaining portion has been used for general corporate purpose. This capital inflation has had a profound impact on our financial position. The company has been able to repay a major of its term loans and also free-up its working capital limits, which will lead to the debt position reducing substantially. Our external credit rating is also under review by CRISIL and we expect a positive movement.
In addition, the consortium banks have agreed to part release the pledge of the shares with the promoters for which documentation is under process. The reduction in debt will lead to substantial savings in the finance cost going forward and thus translate to higher margins and cash flows. With a strengthened balance sheet leading to an increase in the net worth of the company, we are now eligible to bid for projects above INR1,500 crores. Now getting into the details of our financial performance for the second quarter and the half year ended for the fiscal 2025.
Our revenues for Q2 FY ’25 were at INR280 crores on a standalone basis, which compared to INR225 crores last year, representing a growth of 27% YoY. On a consolidated basis, the revenues stood at INR288 crores compared to INR234 crores for the last year, representing a growth of 23% YoY. On a half-year basis, revenue were at INR517 crores on a standalone basis, which were higher by 13.4% YoY as compared to INR456 crores last year. And on a consolidated basis, the revenue stood at INR529 crores compared to INR470 crores last year with a growth of 12.7% YoY. In both standalone and consolidated numbers, we estimate targeted growth of 20% to 25% for the current fiscal year. This growth will be majorly driven by significant execution in the Infrastructure segment, which accounts for almost 90% of our revenues.
Our standalone EBITDA for the quarter ended September 30, 2024 stood at INR40 crores compared to INR27 crores, representing a growth of 47% YoY and EBITDA for the half year was INR74 crores compared to INR60 crores last year. That is a growth of 25%. The consolidated EBITDA was at INR33 crores for the quarter compared to INR32 crores last year, representing a growth of 2.8%. And EBITDA for the half year stood at INR69 crores on a consolidated basis compared to INR62 crores on a consolidated level last year, representing a growth of 7.9%. We are very confident of maintaining our long-term EBITDA margin at 13%, which we have also done historically from the operations. With the improvement in revenue, the operational efficiencies have helped us ensure long-term EBITDA and we expect the same to be maintain going forward as well. There has been an exceptional growth in profit after taxes with consolidated PAT for Q2 at INR18 crores, that is a growth of 30% compared to INR14 crores last year. Standalone PAT was at INR22 crores, which is a growth of 90% from INR11 crores last year.
In terms of our segmental performance, the Infrastructure segment continues to be the backbone of our business and reported revenue of INR490 crores for the half year ended September 30, 2024. This segment contributes almost 93% of our total revenues for the period. The key contracts for the Infrastructure segment continue to perform well with contracts like NHAI Ganga Bridge Prayagraj, Mathura-Jhansi, Majerhat and Byculla driving a major part of our revenues. The order backlog in this segment is INR3,372 crores. The Sleeper segment has an order backlog of INR238 crores and is driven majorly by the performance in the domestic business in Panagarh and also contribution from the South African subsidy. In terms of the Ghana factory, we have received the advance from the customer and the raw materials have already been ordered. We expect to start the production in December 2024. With the thriving order book and reduced debt positions, we are well-positioned to navigate the dynamic landscape. As we move forward, we are confident in our ability to capitalize on the positive momentum generated by these factors.
Our focus on maintaining a robust and healthy order book coupled with continuous efforts to optimize our financial structure lays the foundation for our future growth trajectory. In terms of our order book, as of September 30, 2024, we have a net unexecuted order book of INR3,610 crores, which represents almost 3.6 times our FY ’24 revenues, providing a strong visibility to the investors and to the management. The order inflow during the year was INR1,040 crores.
That is all from my side. Thank you, and I look-forward to addressing any questions that you might have with respect to our financial performance and future prospects. I’ll now request the moderator to open the floor for any question-and-answers.
Questions and Answers:
Operator
Thank you very much, sir. We will now begin the question-and-answer session. [Operator Instructions]. Our first question is from the line of Parth Kotak from PLUS91 Asset Management. Please go ahead.
Parth Kotak
Hi, Atul sir. Thanks for taking my question. Congratulations for a decent set of number for you and your teams. Sir, I have two questions. One on concrete sleeper sales and Ghana factory operations. The year-over-year sales from Concrete Sleeper segment have remained flat, while you mentioned in the opening comments that the Ghana factory will be operational from December. Could you provide an update on the current production status and contribution from the Ghana factory to Concrete Sleeper segment? Have there been some challenges which we have encountered? Because I think from our last conversation, I remember we were expecting a decent increase in sales from this segment for the current year.
Atul Tantia
Sure. So this year, we expect this segment to do almost INR140 crores of revenue, which will be a jump from INR95 crores done last year, which is a significant jump. In terms of the Ghana factory, like I said in my opening remarks, the December we will start the production there and the revenue will start booking in Q4. We expect a INR25-odd crores revenue inflow from Ghana in Q4, INR25 crores to INR30 crores.
Parth Kotak
Okay. Perfect, sir. That’s helpful. Sir, second question is on the bid pipeline and capital utilization. Following the recent capital raise, GPT Infra is now eligible to bid for larger projects. Could you share insights into the current bid pipeline, particularly regarding any larger projects that the company has pursued post the capital raise? Additionally, have there been any new orders secured in the last quarter and how does the company plan to leverage its enhanced financial capacity to drive future growth?
Atul Tantia
So, in terms of order bidding, we are continuously bidding for new orders. We have bid for some large contracts, INR1,000 crores plus each as well. There are some contracts wherein the prices have not been opened. So, we’re not sure what is the exact status. Once that is obviously done, we will announce it to the larger investor community. Post the QIP, obviously there is lot of depth available with the management to do much more faster execution as well as procure more contracts. Like I said in my opening remarks, with the improvement in the net worth, we are now eligible to bid for contracts up to INR1,500 crores. This will allow us to address a much larger piece of the what we call infrastructure investment in the country. The balance sheet being strengthened obviously will lead to much more better cash flows and savings on the interest cost as well.
Parth Kotak
Super, sir. Appreciate the clarification and wish you all the very best for the quarters to come.
Atul Tantia
Thank you.
Operator
Thank you. Our next question is from the line of Kashvi from JRK Stock Broking. Please go ahead.
Kashvi Chandgothia
Yeah, hello, I’m audible?
Atul Tantia
Yeah. Please go ahead.
Kashvi Chandgothia
Firstly, I would like to congratulate the management on great set of numbers and thank you for this opportunity. So, my first question is like the consolidated order book was around INR3,670 crores as on the previous quarter. However, we have seen that the order book as on this date stands at INR3,610 crores. So, are we seeing any slowdown in order inflows, especially as government spending has slowed down?
Atul Tantia
So, in this quarter, we have done almost INR290 crores of execution and we would have — we have got contracts of almost INR240-odd crores. So, that is why the net order book has come down by almost INR60-odd crores. We have got two or three large contracts also in this quarter. It is not as if nothing has come through in this quarter. For the full year, like I said, we have got INR1,000 plus crores of new orders. We expect to hit our number of INR2,000 crores new order inflows for the year in the balance 4.5 months that is there for the year.
Kashvi Chandgothia
Okay. Thank you. And sir, my next question would be, sir, the consolidated dated EBITDA margin fell from 13.8% to 11.5%, almost 230 basis points. So, going-forward, do we have any chance in recovery of the EBITDA margins?
Atul Tantia
So, the consolidated margin has fallen mostly on account of, on consolidated basis in terms of the fluctuation in the Ghana currency. The Ghana currency is quite volatile. Having said that, our contract in Ghana is in euros, the payments to customers is also in euros. So, once the factory starts, we don’t see much of challenge in that as well. It’s not a cash loss, it is a mark-to-market loss in terms of currency.
Kashvi Chandgothia
Okay. Got it. Thank you.
Atul Tantia
Thank you.
Operator
Thank you. [Operator Instructions] Our next question is from the line of Shivam Revankar from VS Revankar Holdings [Phonetic]. Please go ahead.
Shivam Revankar
Hi, Atul, can you hear me?
Atul Tantia
Yeah. Please go ahead.
Shivam Revankar
Yeah. Congratulations, Atul, great quarter. My question was that now that with enhanced financial capacity and ability to bid for larger projects, you mentioned you bid for a couple of INR1,000 plus crore projects. So, what happens in case you like land a project somewhere around INR1,300 crores to INR1,500 crores as a single order? Does that mean we will stop bidding for more projects or would there be any alternative arrangements in place to expand capacity, the bandwidth?
Atul Tantia
So honestly, we have enough bandwidth to bid for more projects. Why we do set a target is of INR2,000 crores is that we would always like to have a bid pipeline on order book outstanding of 3 times to 3.5 times our trailing 12-month numbers. With INR2,000 crores that number can be achieved. If the new contracts that we are bidding for do meet a hurdle rate of 13% EBITDA, we would be happy to add on more contracts and take it up to INR2,500 crore, INR2,800 crores as well. We are not stopping in terms of bidding — our bidding pipeline anytime in the near future.
Shivam Revankar
Yeah. Okay. That’s great. And from the previous questions asked by the last two gentlemen, the factories that we have in the Africa region, what are the payment arrangements like then? I mean, is it like do we get paid in like dollar terms or is it in local currency and that’s why we faced the currency translation losses?
Atul Tantia
So, South Africa and Namibia, we get paid in what do you call South African rand and Ghana, we get paid in euros. South Africa, the currency is not that volatile. Ghana, since we are making the balance sheet in the local currency as per the laws in Ghana, there is a currency translation loss, which is a mark-to-market loss. But there is no cash loss because all our bank accounts are also in the euros and payments receipts as well as expenditures also in euros.
Shivam Revankar
Okay. That’s it from my end. Thank you.
Operator
Thank you. Our next question is from the line of Bhavik, who is an Individual Investor. Please go ahead.
Bhavik
Hello, am I audible?
Atul Tantia
Yes. Please go ahead.
Bhavik
Yeah. Congratulations for a really good set of numbers. Sir, you already answered on the EBITDA margins going-forward, but I also wanted to understand whether in October and November of this financial year, are we doing a monthly run rate of over INR100 crores?
Atul Tantia
Yes, we did about INR100 crores in a monsoon quarter for a construction company, which is the second quarter. So, we did about INR280 crore, INR285 crores, which is almost INR100 crore kind of run rate.
Bhavik
Correct. So, we are maintaining a similar run-rate even in this quarter, right, of this financial year?
Atul Tantia
Slightly higher.
Bhavik
Okay, okay. And sir, regarding the finance cost, since we have repaid INR95 crores in debt, what is the finance cost that we can expect for Q3 and Q4?
Atul Tantia
About INR6 crores.
Bhavik
Okay. So, INR3 crores per quarter roughly around. Okay. And sir, in the previous con call you had given — hello?
Atul Tantia
Just to clarify, about INR6 crores per quarter, I’m saying — I’m not saying six in total.
Bhavik
Okay. But sir, we have significantly paid down the debt or so the debt comes — so the finance cost comes down by only INR2 crores per quarter.
Atul Tantia
The finance cost will come down by slightly more, but there are lot of new equipment that we are taking in terms of — for the new contracts. So, there’ll be some financing required for that as well.
Bhavik
Okay. And sir, my last question is for this year, you had guided for a 45% profit growth. So, are we like guiding the same for this financial year?
Atul Tantia
Yes.
Bhavik
Okay. Thanks a lot, sir. You have answered all my queries. Thank you.
Atul Tantia
Sure. Thank you.
Operator
Thank you. [Operator Instructions]. Our next question is from the line of Nishant Gupta from Minerva Global Capital. Please go ahead.
Nishant Gupta
Hello. Thank you for the opportunity. I have two broad based questions to you. One is, what is your expectation or what is your vision to take this company forward, let’s say, in next two, three years in terms of revenues or what is your long-term vision?
Atul Tantia
So, the target is to double the revenues to INR2,000 crores in the next three years. So, last year we did revenue of almost INR1,000 crores, INR1,000 crore-plus. And by FY ’27, we should hit a number of INR2,000 crores.
Nishant Gupta
Maintaining the same EBITDA margins, right, around 13%,14%.
Atul Tantia
13%, yes.
Nishant Gupta
Okay. Sir, the second question is a bit broad. Sir, the company is doing very well. I mean, you are clocking numbers, you also did a fundraise at around INR175 a share. So, any particular reason why the street is not valuing this company in a way the company is clocking the growth. I know you are accountable to the company and the business, but any idea around the market? What is happening around that?
Atul Tantia
I cannot and do not comment on the market.
Nishant Gupta
Okay, sir. No problem. Thank you.
Atul Tantia
Thank you.
Operator
Thank you. Our next question is from the line of Ankit Shah, who is an Individual Investor. Please go ahead.
Ankit Shah
Hi, thank you for the opportunity. So, congrats on the successful fundraising of the QIP in record time. So, just wanted to know like what’s your vision about the company in the long- to medium-term? And what’s your — like what CAGR or top line can we assume from here on? So, just want to know the broad numbers from here on that how much growth are we expecting?
Atul Tantia
So, in terms of revenue, like I just said earlier, I think the gentlemen previous to you, is that in the next three years, we expect to double our revenues from INR1,000 crores last year to INR2,000 crores in FY ’27. This would entail a CAGR of almost 24%. And this is quite a healthy growth number. This is in terms of revenues. EBITDA would remain at 13-odd percent, PAT would grow disproportionately given the finance cost coming down and the operating leverage kicking-in.
Ankit Shah
Okay. Thank you. I got it. And apart from that, I just wanted to know like this growth guidance what you’re giving. So, this growth will be mainly coming from your railway orders or from road also? How will the revenue mix look in the future?
Atul Tantia
It’s a mix of railways and roads today. Railways accounts for almost 40%, 45% of our infrastructure order book and balance i from NHIA and MoRTH, etc. And so it’s a mix of both. We are not dominant towards either. The Sleeper business obviously is only railways. So, if you add that to the industrial business of railways, the other majority of the revenues do come from railways, but for us, it will be a mix of both.
Ankit Shah
Okay, great. Thank you. So, just one last question from my side. Just wanted to know how is the bid pipeline looking and how is the order book, like what are the order book guidance and also from here on? So, just wanted to know-how is the industry doing and any insights about the order pipeline and all as well?
Atul Tantia
So, we have got almost INR1,050 crores of orders in this financial year. We expect to bag about INR2,000 crores plus for the full year, which means an order inflow of INR1,000-plus crores for this year in the next 4.5 months. The government spending on infrastructure is quite good and continued focus on the infrastructure. So, we don’t expect any challenges with respect to that as well.
Ankit Shah
Okay. Thank you. Thank you for the opportunity. Thank you.
Atul Tantia
Thank you.
Operator
Thank you. [Operator Instructions] Next is a follow-up question from the line of Shivam Revankar from VS Revankar Holdings. Please go ahead.
Shivam Revankar
Yeah. Atul, I think I might have joined a couple of minutes late and I sort of overheard that you mentioned something in the lines of some positive developments around external commercial borrowing. Am I hearing it correct or was it something?
Atul Tantia
No, I never mentioned that. I think you are mixing some other call.
Ankit Shah
Okay, okay. Okay, sure. Thank you.
Operator
Thank you. [Operator Instructions]. Our next question is from the line of Akhilesh Gandhi from PWC. Please go ahead.
Akhilesh Gandhi
Hey, hello, Mr. Tantia. Congratulations for really stellar results on this quarter. I wanted to ask with regards to the promoter share pledging. What’s your outlook for reducing the pledge over the next few quarters or by end of this financial year?
Atul Tantia
So, like I said in my opening remarks, the consortium banks have already agreed to release part pledge of the promoters. The documentation is in process and hopefully, it should be next week. So that will reduce the promoter pledge from the current 51% of the company to almost 37% — almost 34%, 35% of the company. So, 14% to 15% of the pledge will be released and the balance also, we expect by this time next year to also get released significantly as well. And this is, again, I would like to clarify is towards the working capital of the company and not for any other purpose.
Akhilesh Gandhi
Got it. I wish you the best for the next quarter and the financial year. Thank you so much.
Atul Tantia
Thanks a lot.
Operator
Thank you. And as there are no further questions, I now hand the conference over to Mr. Atul Tantia for closing comments.
Atul Tantia
Thank you, everyone for your questions and I hope I have suitably addressed the same. In case you have any further questions, please do get in touch with us. Thank you and have a good day.
Operator
[Operator Closing Remarks]