Key takeaways of the call

Order inflow in 9mFY15 is Rs 950 crore. The order inflow in Q3FY15 is sluggish as placement of orders where the company is L1 as end of Sep 2014 got delayed.

Order book as end of Dec 2014 stood at Rs 3320 crore and the company is L1 in orders worth Rs 1000 crore. Of the L1 orders about 60% is expected to come into order book in Q4FY15.

Ordering picked up in PSU segment. Of the total L1 orders about Rs 700 crore is healthcare and Rs 300 crore is education. Further the completion is lower with only few large players is bidding. Private sector orders are subdued and the situation will remain subdued for another 6-8 months and after that only there will be some improvement.

During Q3FY15 the company paid debts to the tune of Rs 100 crore and thus the debts have reduced to Rs 140 crore from Rs 240 crore as end of Sep 2014.

Debtors more than 6 months including retention money are Rs 185 crore.

Accumulated loss pending for tax benefit is Rs 67 crore as end of Dec 2014.

The EBITDA margin for Q3FY15 was about 10.97% compared to 12.6% for 9mFY15. There is no one off items its due to order mix. The company expects to complete all the fixed cost legacy orders which work out to about 10% of the order book.

Having achieved a sales of Rs 750 crore for 9mFY15 and strong order book, the company is confident of achieving its FY15 sales guidance of Rs 1100 crore. On margin front the company expects to end the fiscal with an EBITDA margin of 11.5% as against earlier guidance of 11-11.5%. For FY16 the company expects 20-25% growth in revenue with EBITDA margin of about 12%.

Other income for the quarter included IT refund of Rs 2.2 crore and Interest on deposits is Rs 1.5 crore.

Profile of the PSU projects are now composite orders with higher ticket size at about Rs 150-400 crore.

The tender's technical qualification requires the potential bidders should have executed large composite projects this firstly reduces competition. Moreover on financial side of the tender, the PSUs/ government orders for building requires letter from banks giving solvency certificate which most of the industry players find it difficult to provide.

If market improves, the company will monetize its non-core assets of hotel project and commercial space.

The share of private sector has now come down to 50% of the order book from about 80% earlier. The balance 50% is from PSU and government segment.

Barring some legacy fixed price orders which is about Rs 300-350 crore (or 10% of the OB) balance order book including the new private sector orders have price variation clause.

For 20-25% growth in sales the company has to target an order inflow of about Rs 1600 crore and for that the company has to bid for Rs 8000 crore given the company's empirical strike-rate.