Key takeaways of the call

Order inflow in FY18 was Rs 8593.46 crore FY18 as against OI guidance for FY18 of about Rs 7000 crore.

And the order backlog as end of March 31, 2018 was Rs 13249.33 crore. Of the order book transport sector account for 81.33%, irrigation 3.43% and mining 15.25%.

EBITDA margin for FY18 stood at 11.8% as against 10.7% largely due to completion of low margin irrigation projects and execution of high margin HAM projects. EBITDA Margin for Q4FY18 stood at 11.2% compared to 10.6% in Q4FY17. EBITDA margin will improve further with better margin levels in HAM projects.

The company expects an order inflow of Rs 8000 crore for FY19. On conservative basis the revenue (excluding GST) for FY19 would be Rs 4100 crore and EBITDA margin would be 12%. Of the expected FY19 revenue of Rs 4100 crore about Rs 350-375 crore is to come from Mining and Rs 220-225 crore from irrigation and balance are to be accounted by transportation sector.

HAM projects are set to drive revenue growth in FY19 and FY20.

NHAI Expected to award orders worth Rs 100000 crore in CY2018 even though the awarding momentum has slowed down from April 2018 after witnessing strong traction at the beginning of current calendar year. So the company is confident of achieving its OI target for FY19.

On transportation sector, MSRDC to open bid for EPC road projects with a length of 283 km on May 31, 2018. NHAI has floated tenders for about 26 projects for a length of 900 km and an project cost of Rs 18032 crore and 47 HAM projects for a length of 2183 km for a project cost of Rs 44604 crore for which bids has to be submitted by July 31, 2018. On mining front there are tenders for contracts worth Rs 1009 crore for which bids has to be submitted by July 31, 2018. Similalry in irrigation sector there are projects with an estimated cost of Rs 6312 crore for which tenders are already out and bids has to be submitted by July 31, 2018 and irrigation projects are in the states of Gujarat, MP etc.

Update on land availability in case of HAM projects won in Q4FY18: Kim-Ankleshwar 100% land is acquired and is in possession. So once FC is done the execution of this project can commence. Jodhpur Ring Road about 90% of the land required is already acquired and once FC is concluded, which is expected by 3^rd week of June 2018, the execution of this project will commence. Vizag Port Road project is for smaller length and it is an existing carriageway. So once FC is done the execution will commence. As far as Tumkur-Shivamoga and Bhimasar-Bhuj around 70% land is acquired and there is 4-4.5 month time is there and by the time FC is closed the required land would be in place to commence work. Together all this five HAM projects required a debt tie-up of Rs 2000 crore.

Debt as end of March 31, 2018 was Rs 1484 crore as against guided level of Rs 1300 crore. The company has completed 5 projects and in these five projects about RS 450 crore is struck. Once this money is received back that will be used to bring down the debt. Further the company is also yet to received mobilization advance amounting Rs 588.1 crore from SIPL and all of which is not required to mobilize for this project and can be used for debt reduction. Mobilization advance from SIPL attracts bank rate and thus lower than average rate.

Amount struck in completed projects: About Rs 80 crore in Yamunanagar Expressway, Rs 170 crore in Eastern Peripheral Expressway, Rs 75 crore in Mysore Bellary (change in scope work), Rs 38 crore in Devaguda project, Rs 70 crore in Mahrashtra Border Checkpost.

Mobilization advance of Rs 588.10 crore to be received from SIPL comprise Rs 74.50 crore from Waranga Mahagaon; Rs 97.50 crore from Jodhpur Ring Road, Rs 42.10 crore from Vizag Port Road; Rs 98.10 crore from Lucknow Ring Road, Rs 85 crore from Bhimsar Bhuj Anjar, Rs 78.40 crore from Tumkur Shivamogga and Rs 112.5 crore is from Kim Ankleshwar.

Including GST impact of Rs 309 crore, the company's income from operation stand at Rs 3814 crore and that is almost equal to year start guidance for FY18 of Rs 3800 crore and well above Q4FY18 modified revenue guidance of Rs 3700 crore.

Lucknow Ring Road, some land parcel aggregating to 25% land required is pending to be acquired by NHAI.

Of the claim due to Rohtak-Panipat project about Rs 54 crore belongs to Sadbhav Engineering and balance to SPV. Of the Rs 408 crore plus interest in case of Nashik-Mumbai Expressway about 72% belongs to Sadbhav Engineering and balance to Gammon. Of the claim amount of Rs 120 crore plus interest in case of Nagpur Sheoni entire claim amounts belongs to SPV. Since claim relating to Dhule Palesar is related to delayed announcement of toll the entire claim belong to SPV.

KSIDC order of Rs 995 crore won recently by SIPL is an ADB funded project. These projects involve only 25% of debt component. So 75% of funding will be released on five milestones during the 24 months of construction period.

The group is clear in its strategy of growth capital has to come from operational project.