IRCON INTERNATIONAL LIMITED (NSE: IRCON) Q4 2025 Earnings Call dated May. 22, 2025
Corporate Participants:
Unidentified Speaker
Hari Mohan Gupta — Chairman & Managing Director
Ragini Advani — Director of Finance
Analysts:
Unidentified Participant
Shreyans Mehta — Analyst
Vishal Periwal — Analyst
Presentation:
operator
Good afternoon everyone and welcome to the Q4 and FY25 post results earnings call of Aircon International Limited. I am Steve, the moderator for this conference call. From the management side we have with us Mr. Hari Mohan Gupta, CMD Advani, Director Finance. Mr. Alan Roy Chaudhary, CGM Finance and CFO Mr. Ram Kumar Goel, CM GM Finance and Mr. Sachin Garg, TGM Investor Relations. Please note that this conference call is being recorded at this moment. All participant lines are in the listen only mode. Later we’ll conduct a question and answer session at that time. If you have a question, please press star n1 on your telephone keypad.
I would like to remind you that some of the statements that will be made in today’s discussion may be forward looking in nature. It is subject to several risks and uncertainties and the actual results could materially differ. I would now like to hand the conference over to Mr. Harimon Gupta for the opening remarks. After which we will have the forum open for interactive Q and A session. Thank you. And over to you Sir.
Hari Mohan Gupta — Chairman & Managing Director
Thank you Mr. Steve. Good afternoon everyone. I am Hari Mohan Gupta, Chairman and Managing Director of Aircon International Limited. On behalf of my team I extend a warm welcome to you all and thank you very much for your gracious present Today at the IRCONS earnings call for Q4 and FY25. Operationally this year has been a little bit challenging for the company due to increased competition in the sector. However, we are hopeful to be back on the track and improve the performance going forward. Now I request my Director Finance to give brief about the financial performance of the company.
Ragini Advani — Director of Finance
Thank you CMD Sir. Good afternoon everyone. Financial results as well as presentation has been uploaded on the stock exchanges And I’m sure that all of you have had the opportunity to review these documents. Just a little brief of the financial performance of the company in Q4 and FY25. The operational performance is subdued. As we had also stated in our last investor call. This is because of completion of the major cost plus jobs, reduced order book and some one off entries that we had to put in certain projects on account of provisions or losses on consolidated basis.
The company has had a provisioning of major maintenance in one of the subsidiary company. Again a one off item. The company has reported total revenue of Rupees 11,131 crore in FY25. The corresponding PAT stood at Rupees 728 crore and Core EBITDA at Rupees 905 crore in FY25. Earning per share is at Rupees 7.73 per equity share in FY25 on a face value of Rupees 2 per share. The order book of the company as at 31st March 2025 stored at Rupees 20,347 crores. This comprises 58% on competitive bidding basis and the rest of the orders on nomination basis.
In terms of domestic versus international split, almost 90% of our order book is from domestic business and the balance from international Board of directors along with the accounts have also recommended a final dividend of one rupee per equity share on a face value of Rupees two per share. This is subject to shareholder approval in the ensuing AGM. This along with interim dividend of rupees 1.65 per equity share would tantamount to a total dividend of rupees 2.5 per equity share for FY25. Aircon has 11 subsidiaries and 7 joint ventures including a renewable power company. Now without taking much time, I would like to open the floor for Q and A sessions. Thank you.
Questions and Answers:
operator
Thank you, ma’ am. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to withdraw yourself from the question queue you may press star and two. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Shoyans Mehta from Aquaris. Please go ahead.
Shreyans Mehta
Thanks for the opportunity. Ma’ am, could you quantify the one off during the quarter which led to the lower margins?
Ragini Advani
Yeah. Two. Three things. One, in standalone we have provision that we have made for LD in case of our job on DFTC that amounts to 108 crores. And apart from that, I had mentioned in last quarter that we have taken certain losses on one or two of our jobs. One of them being Chennai Metro. That also is about 40 crores. And on the consolidated side we’ve had one issue in terms of one of our road SPDs where we’ve had a major maintenance. That is what we have taken into account. And in one of our coal connectivity projects, this is Chhattisgarh cerl there the project has been incurring operational losses.
Some part of the project is yet to be constructed. So once that is constructed and we have the full traffic there then we shall probably not have losses going forward maybe another two years down the line. So all these are one off. Items because of which we’ve taken it on our pnl.
Shreyans Mehta
Okay. Second, you know from a medium term perspective how should one look at, you know, the growth from here on. Right now we have an order book of six. So now should the focus move on building order inflows at lower margin or will still wait for orders to come in at the margins we want how should one look at that? And secondly, how should one look at FY26 standalone revenues and guidance margins?
Hari Mohan Gupta
Thank you very much for this nice question. Presently we have the order book of around 20,500 crores. And you will be pleased to Note that during 2425 around 2,600 crores orders were received by the company out of which around 1650 crore which were based on the bids which were submitted during the financial year. And around 950 crores order were received for which the bids were submitted earlier. And during 2526 also by now, I mean by the May, 22nd May when we are talking 1150 crores orders already received. And also we have entered into new verticals like Kavach, the train protection warning system, the iconic technology of the country.
It’s really a proud moment for the company that we have received the first Kavach order for South Western railway. It’s around 253 crores. And we have already bidded in some other Kavach projects tenders as well. And we are very hopeful. Again I would like to mention that you will all be pleased to note that the first Kavach Tower tender we have won it is around 194 crores. And the work is under execution in Central Railway. There around so many towers are to be provided which will be used for the Kavash. That is the second tender, second contract for the Kavach.
Similarly we have entered into a new vertical of signaling diagnostic which is the new field. And I am pretty sure that it will be replicated in the entire country in Indian Railways. And what it does is that whatever the signaling and telecommunication gears are available in the railway network you can remotely monitor their health that what is the condition and you can predict their their life just looking at the computer screen. So that is a new revolution which we have brought. We have already got an order from North Western Railway and the Ministry of Railways has appreciated this to a great extent.
And it will also be replicated in a big way. And now other zonal railways are preparing their tenders for floating in near future in addition to above. Yes, we have already bidded in various Tenders which are already under evaluation to give some of the examples are. And we are very, very hopeful because they are under evaluation. So I cannot be very specific with them but we have bidded in three tenders in Metro in Mumbai. And we have also bidded one in electrical tender of up and we are already bidding around 10 bids of around 2000 crores have already been submitted during current 2526.
Up to this period around 18 bids of 9200 crores are yet to be submitted very shortly and during 2425 we have submitted around 120 bids. Bids of 60,000 crores. So enough of scope is available to everybody. Infrastructure is booming and we are, you know bidding for big ticket size projects as well as middle size projects and by joint venture, by pre bid, by bidding alone depending upon the type of the project, the complexities involved, the the competency available with each sector. And again I forward one more thing. That one more vertical we have opened in this company and that is the hydropower.
We have received an order of around 453 crores in Arunachal Pradesh. We have also received an order of Secretariat building in North Frontier Railway in the joint venture with one company. And we have also bidded in various tenders of building works in North Frontier Railway which are already under evaluation. And we also got one order of railway project of around 900 crores in. I’m forgetting the name of the journal Railway but we have already received the order.
Ragini Advani
So from whatever CMD sir has given an update on the. On the business development side as well as the orders. So as to answer your Overall perspective in FY26 27 while we are trying to get as many orders as we can. But even after picking up orders the execution and the conversion into revenue takes some time. So given our current order book position we maintain that our turnover should be in similar range going forward in 25:26 at least.
And the margins as we had mentioned earlier also, yes, there is a strain, slightly strain on the margins because of the increased competition and many of the bids being taken up at a very, very competitive rate. So there would be an overall decline, as I have previously mentioned, it would be in the range of about half to 1% going forward.
Shreyans Mehta
Okay, got it, got it. Secondly, in terms of the strategic effects, you know, the railways per se or even the road effect which we hold, is there any intention to hold on to those assets? I can understand we have Deepam who will be taking a final call. But from our perspective what is the thought process? Do we Intend to hold those or once they mature, probably we are looking to monetize those and come out of those.
Hari Mohan Gupta
Our objective would be to monetize as quickly as possible once the project is completed and we have already started process in that direction and I hope two proposals are already.
Ragini Advani
So yeah, so yes, you’re absolutely right. Railway and Deepam will ultimately give a go ahead. It is a longish process but the intent is to monetize PPP projects which are operational,
Shreyans Mehta
Even. Even the mining project. Right.
Ragini Advani
In mining we are a minority partner. So there that discussion will happen with coal companies and they would be in a better position to take it. But wherever these are 100% subsidiaries, I’ve already gone ahead and we’ve taken this decision to move ahead for monetizing them. For there they have obviously coal mines as their ownership. So they may not like to monetize it eventually.
Shreyans Mehta
Got it, got it. And lastly, in terms of, you know, coming back to the same point in terms of order inflows, assuming, you know, even if we get closer to 10,000 odd crores this year, no, as a shareholder, what might happen is FY27 again looks bleak, you know, because even at 10,000 node we’ll end up at say 30,000 and we’ll be doing say 10, 10,000, not crores for next two years. So I mean unless and until we scale up in that manner, you know, significantly like 20,000 crores plus, how do you intend, you know, to take it, you know, from the degrowth phase to growth phase? Was it 27, 28?
Ragini Advani
So currently, you know, I think we would like to stick to our forecast or what we assume to be a reasonable prediction for FY26, for FY27. You are absolutely right for us to come back to make going into a growth phase, definitely we have to pick up more orders. But having said that, since the market has been tough and we have recently diversified into certain areas, as CMD also mentioned, I think we will be in a better position to tell you maybe few months down the line. So we do not want to commit something which is just theoretical right now. But yes, efforts are fully on to make the order book grow at a faster pace.
Hari Mohan Gupta
To add further what my director of Finance madam has said, rest assured, we are working very hard, bidding aggressively and with full focus what is to be bid. We will not be bidding under losses at all and we will be attacking more and more verticals in which we feel very, very confident. We are already working and we would be bidding very, very shortly in some new Verticals as well. And I am pretty sure that we should be successful in those efforts. So future is bright. I do not see any negativity in the market because it’s a huge market.
And only thing what I can say presently and you all will appreciate that around 24 bids are coming in the railway tenders. Per tender, 17 number of bidders are there in road projects tenders and 19 number bidders are there in building bids. So it’s a tough competition and really very tough competition. But the only answer lies in opening up the new verticals and entering into joint venture pre bid tie ups. Bidding in those area independently where the ticket size is big and we feel very confident. We aware like the railways, the highways. So it would be a combination of all these strategies. But we will be successful.
Shreyans Mehta
Got it. Got it. And one last if I can this wanted some data points
operator
I would request. Thank you so much. The next question is from the line of rahu Thakur from NVS Brokerage. Please go ahead. Mr. Thakur, your line has been unmuted. Please go ahead with your question. Mr. Thakur. Mr. Thakur, your line has been unmuted. Please go ahead with your question. As there’s no response we’ll move on to the next question. It’s in the line of Vishal Perival from Antique Stockbroking. Please go ahead.
Vishal Periwal
Yes. Thanks for the opportunity. And thanks for outlining a picture like you know how things could be for our company. Time to come. So on this front I have a couple of questions. One you did mention like you know, new opportunities like signaling diagnostic coverage. So will that be, Will you have that data or anything ready? How big is the opportunity in these segments and any color that can be project, Sir.
Hari Mohan Gupta
Yeah, I will. I don’t have the numerical number for the country size. But I hope you will be satisfied with my reply. The entire country, more than a lakh kilometer of Indian Railways is to be covered under Kavach. It’s a train protection warning system. So that two trains may not collide and any driver inadvertently may not exceed the speed. It will be automatic brake application in the locomotives. So the entire country is to be covered in a huge, I mean more than a lakh crore business is available in this sector. What I have come to know but I’m not very sure about the numerical numbers at this stage.
But the entire country is being covered through Kavach Diagnostic. Entire Indian Railways would get covered progressively. Because it’s the new thing which is coming up in the country. And it has started one more Field, you know, elephant passes wherever the elephants do cross the railway track. So Indian Railways is now coming up with fresh tenders for electronic systems in such a way so that these animals when they cross the track it gets noticed in advance and they may not get hit by the moving train. So which, which will be, you know, win, win situation both for the railway as well as for the animal. So it’s a huge, huge business opportunity. I will only say this.
Vishal Periwal
Okay sir, in terms of tenders which are open right now, maybe say coverage or maybe diagnostic. What could be the size of it?
Hari Mohan Gupta
Yeah, every Kavach tender is of the order of 250 crores to 300 crores. Every Kavach tender, whatever we got it is 253 crores. We got the order for SWR and we have already bidded in three more tenders. They are under evaluation and the next phase of tendering would be available. Whatever is known to me by July or August, next wave of tendering again for Kavach will come. So it’s an ongoing process and whatever tenders are getting finalized, the execution is taking place. Let’s say it’s a government of India, you know, prime project because they want this coverage to be installed as quickly as possible to enhance the safety of the moving trains and the passengers.
Vishal Periwal
Okay, sure. Sir, maybe one last question from my side and then I’ll come back in the queue. When you mentioned probably there will be a pressure on the margins in FY26 also. So on a standalone we have done almost like a 4.7% sort of margin. So one is like there is a continuing losses in certain projects. So this 4.7 probably ballpark could be how much based on what are pending loss looking at us.
Ragini Advani
So if I was to Exclude out of 4.7 the one off items it should be in the region of about 5.7 5.75. So yeah we are expecting these margins to be in the range of 5 core EBITDA to be in the region of 5 to 5.25.
Vishal Periwal
This includes our losses which
Ragini Advani
Other than t he one time losses which you know, which is very difficult to predict and hopefully we should not have more in the coming year. But that is something as and when it comes we’ll keep you informed. The typical margins of core EBITDA should be in the range of 5 to 5.25.
Vishal Periwal
Sure ma’ am. Yeah, I think that’s helpful. I have a couple of more questions. I’ll come back in the queue now.
Ragini Advani
Thanks. Thanks Vishal.
operator
Thank you. Before we take the next question. We would like to remind participants that you may press star N1 to ask a question. The next question is on the line of Shayan Smitha from Icurus. Please go ahead.
Shreyans Mehta
Yeah, thanks for the follow up. Few data points. One in terms of inflow number for FY 2125 and secondly what are our investments? If you could broadly split it into roads and the other assets.
Ragini Advani
So sorry, what was your first question?
Shreyans Mehta
Inflows for this year, FY25.
Ragini Advani
Inflows as in the order book. Yeah, yeah. So order inflow. We mentioned to you that we have currently an order book of about 20,000 crore. And in the months of April and May we have had order wins closely to the extent of about I think 1100 crores.
Hari Mohan Gupta
So for 2425 we got order of 2,600 crores and in 2526 up to this month we have got 1150 crores.
Shreyans Mehta
Sure, got it, got it, got it.
Ragini Advani
And in terms of the investments we have made in road projects, an investment of about 1500 crores, we still have to invest another 400, 500 crores. In coal connectivity we have made investments of about thousand crores, we still have to invest another 500 crores. And in renewable we have mostly done all the investments. But yes, there is a close amount of about 30 to 50 crores that we still need to put in in this current year. So overall you can say that we have invested about 2300 crores in all our SPVs and we have another thousand crores that we need to put out of which in this financial year we should be investing in the region of about 500 crores.
Shreyans Mehta
So one clarification, so renewable we’ve invested closer to 300 or crore.
Ragini Advani
Yeah, that’s right, 200 odd crores. We have already done
Shreyans Mehta
200 odd crores.
Ragini Advani
Yeah
Shreyans Mehta
sure. And ma’ am, just on you know, dwelling more on margins, you know since we went to new segments like coverage which I’m presuming would be margin compared to our current epc. So still, you know, why are we guiding for a lower margin for FY20, probably FY26. Because
Ragini Advani
that’s, because that’s because Kavach is going to play a role in our order book. But we will still continue to have dominance of EPC orders and EPC projects in both rails and road. As sir also mentioned has many, many players and the margins and the competition is intense there, our margins will take a squeeze. So overall perspective would be the guidance that we’ve given. Please
Hari Mohan Gupta
we are also trying to get more orders from overseas. Presently we are working in Algeria, we are working in Myanmar. Recently we have completed the project in Sri Lanka. Bangladesh, Nepal recently also completed the doubling project of Indian Railways Kiyol 128 Route Kilometer doubling project from Katniss to Singrali to 61 km except the Sanjay Tiger reserve portion where the alignment is being piped bypassed. So and the USBRL project which was a big huge project completed and you know, handed over to the Indian railways also around 190km. So these huge projects we have completed during these nine months. So we are, we are working very hard to get the orders both from India as well as abroad.
Shreyans Mehta
That’s it. From my side. Thank you and all the best.
Ragini Advani
Thank you.
operator
Thank you. Participants who wish to ask a question you may press star and 1. Ladies and gentlemen, if you wish to ask a question to the management, you may press star and one. Thank you. A reminder to all participants that you may press star N1 to ask a question. Participants who wish to ask a question may press star and 1. A reminder to all participants that you may press star and 1 to ask a question. As there are no further questions, I would now like to hand the conference over to the management for their closing comments.
Ragini Advani
Thank you Steve for moderating the call and I would like to thank all our shareholders, business partners, analysts, investor friends who have shown continued support and faith on us. We would be happy to connect with you on a one to one basis as well as and when required and for any further queries that you all may have. I conclude today’s call and thank CMD sir for being here. Thank you all for the active participation and thank you once again.
Hari Mohan Gupta
Thank you. Thank you my dear shareholders, thank you very much.
operator
Thank you all for being part of this conference call. If you need any further information or clarification, you may contact to Mr. Sachin Garg or email@sachin.gargon.org thank you for joining us.