Key takeaways of the call

Order inflow in 9mFY21 was Rs 2836.2 crore [Erection 20%; O&M 9%; Civil 71%]. Order back log as end of Dec 31, 2020 stood at Rs 6284.6 crore [Erection 37%; O&M 13%; Electrical works 4%; Civil & other works 45%].

Order back log (excluding execution post 31st Dec 2020) as on 16th Feb 2021 Rs 7353 crore [(Domestic order Rs 6267 crore; International RS 1086 crore) (power sector 65.4% non power 34.6%)]. The company expect to close FY21 with an order backlog of Rs 7600-7700 crore.

Lower revenue for Q3FY21 was largely due to sharp fall in revenue of erection business that was down by 34% to Rs 133 crore. But the civil and O&M businesses have registered a revenue growth of 25% and 5% respectively to Rs 183.6 crore and Rs 171.4 crore.

The month of Oct & November 2020 the project sites still had the impact of Covid Pandemic.

The execution of large projects such as Barh, Nabinagar and Bangladesh have not come back to normalcy in Oct & Nov 2020. The Telangana canal project has also not operated at normal level.

But in Dec 2020, all sites are operating at normal level. So the company expect Q4FY21 to be a normal quarter. The company expects a monthly revenue run rate of Rs 200 crore in Q4FY21.

Given order book to revenue conversion rate of 38-40% and year start order book of Rs 7600-7700 crore, the company expect revenue growth for FY22 to be strong.

Blended normal margin of the company was about 12.5%-13%. But margin in the month of Oct & Nov 2020 was hit by COVID issues safety, low productivity etc), however in Dec 2020 the company had normal margin.

About 75-80% of the order book has price escalation clause for materials.

In O&M, the company is currently focused on non power industries/sector. The company is also diversifying in to Material Handling in non power sector/industry.

The company has tied up with Thyssenkrupp for joint bidding for turnkey material handling projects.

With share of renewable going up in overall grid from current 24% to about 50% in a decade the conventional thermal power project PLF will also come down or reduce to base load capacity. And this will lead to shorterm O&M opportunities.

In case of traditional business (erection of BTG) the competition has come down as many companies are under stress.

The Rs 860 crore Bangladesh project is completed to the extent of 30% till now. They Yadadri project is completed upto 50%. The JSW Steel project, cross country pipeline project and Dangote (international) have completed about 50%, 65% and 70% respectively. The Saharanpur railway project is 45% completed and telengana canal project is completed about 47%.