Key take aways of the call

UOB is Rs 6110 crore of which road EPC projects were about 34% (or Rs 2045.7 crore), roads BOT projects were 38% (or Rs 2335.6 crore) and power T&D was 28% (or Rs 1728.8 crore). Current order book gives revenue visibility for at-least next 2 year.

The company is confident of achieving its FY18 sales growth guidance of about 20-25% by end March 2018.

The company has got concession period extended for Ahmednagar Ghodegaon for one year upto September 2018. Toll revenue for Q2FY18 of the project was Rs 6.43 crore.

In Q2FY18, the company received arbitration award of Rs 124.3 crore in an arbitration case relating to Ahmednagar Karmala project in its favour. The toll collection for this project was stopped in Nov 2012. The money has not yet received and that will be accounted in P&L only on receipt.

Work stopped in large EPC project i.e. Eastern Peripheral Expressway due to local agitation in Q2FY18 for about 50 days and that hurted the revenue in Q2FY18. Post GST era renegotiation of inputs with suppliers in power t&D segment. Flood in bihar also impacted the execution of power t&d projects. About Rs 200 crore of revenue was lost in Q2FY18 due to these reasons.

Post roll out of GST, many manufacturing units in supply chain have stopped production that has delayed the component/input supply. Secondly there was price renegotiation with supplier for supply in post GST era. So these two factors have disturbed the execution by about 30-35 days.

Eastern Peripheral Expressway project will be completed by end of this fiscal.

Financial Closure for Andhra Pradesh HAM project i.e. Anandpura-Ranastalam Hybrid Annuity project in Q2FY18. The loan amount closed was Rs 415 crore with an interest rate of 9.1%.

H1FY18 not much of NHAI orders and even power has not seen any new big tenders except Jharkhand PPP projects. Expect Q3/Q4 will see tendering/finalsiaon of large number of orders in both roads and power t&d.

The company expect it could sustain a margin of about 13.5-15% for couple of fiscal. In Q2FY18 , 13% is the core EBITDA margin leaving out other income and other revenues.

Pimpalgaon-Nashik-Gone road project of PNG Tollway, which was a JV between L&T and Ashoka Buildcon found place in the notice by NHAI. The notice was withdrawn.

No projects under maintenance in Q2FY18. Two project i.e. Belgaur Dharwad and Baroda project will come up for maintenance in FY19.

Standalone debt is Rs 140 crore of which 50% is loan for equipment

All the projects have seen their toll tariff hike effective April 1, 2017.

The toll hike in case of Belgaum-Dharwad, Dhankuni-Kharagpur and sambalpur projects were about 4-4.2%. The toll hike in Durg project was about 4.5%.

Dhankuni-Kharagpur traffic growth is driven by port and that is more sustainable.

Belgaum Dharwad = economic activity picking up and has driven the traffic in last 2-3 quarters.

Bharathmala programme envisages an investment of about 7 lakh crore and construction/development of 83771 km of roads. The opens up huge opportunity for players such as Ashoka Buildcon.

Maharashtra looking at Rs 30000 crore of road projects under HAM which is expected to tendered out in Q3/Q4FY18. Other states are also looking at development of road projects under HAM model.

The company expects order intake of about Rs 3000-4000 crore of order inflow in H2FY18. Expects tenders for projects worth about 60000 crore in next few months and the company has put in bids for projects worth about Rs 30000 crore with Rs 1000 crore of EPC projects and RS 2000 crore worth of HAM projects.

All EPC cash contracts will get 80IB benefits.

Commencement of work in case of Islampur Bypass project is delayed due to lack of land possession. Work has not commenced even though technically the company got the appointed date.

Expect COD for Chennai ORR in Q3FY18 there by facilitating annuity flow from Q4FY18.

Spent a capex of Rs 25 crore so far in current fiscal and will incur a caex of another Rs 20 crore in balance period of current fiscal. In FY19 the planned capex is about Rs 20 crore.