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Transcript
00:00Let me quickly bring on board Mr. Prasad Patwardhan who is the CFO at ITD Cementation India
00:06to talk to us of course about numbers and the road forward given the fact that there is going to be a new promoter coming in.
00:14So let me start off with that Mr. Patwardhan. What's the sense, what changes for you with regard to the company
00:22given that there is going to be a promoter change, 46% changing hands plus open offer?
00:28Well I believe the change is going to be for the good and for the better.
00:33We have a stronger and more reputed company coming in as our promoter and the good part is the promoter,
00:40the new promoter will have infrastructure as one of the focus areas of their business.
00:45So I think it will be a win-win situation for us where we will have more visibility and more work coming our way
00:52and the group will also benefit through the expertise that we bring to the table in terms of engineering and construction and execution of the projects.
01:03Hi Mr. Patwardhan, Anushi joining in. I want to understand from you of the near term outlook
01:09with this kind of change happening for the company, the promoter change, what are you expecting for ITD Cementation?
01:15What should the investors look out for the road term ahead?
01:18Would there be any management changes as well if you have to go forward with this kind of acquisition happening by the Adani Arm?
01:25Well it's too early to comment on how things will pan out going forward.
01:29Our focus continues to remain on execution of the projects on hand and bidding for new projects that come up.
01:35The good part is the Indian government is focusing on infrastructure development.
01:39So there is a lot of projects especially in the sectors where we have the expertise that are coming up for tendering
01:45and our focus is going to continue to be on execution of the projects and looking out for newer projects that we can bid for and execute.
01:54Got it. So talk to us about execution. How is it all playing out?
01:57You had the Ganga Expressway project which was completed by around 50-55% of it was completed at the end of Q1.
02:06Where do we stand on that count? We also had the Chennai Metro project and the Bangalore Metro as well.
02:13So how quickly are we completing some of these? What are the timelines looking like?
02:18Well all these projects are on schedule and the execution is going on at a pretty brisk pace.
02:23Q2 generally because of the monsoons it tends to be a bit slower than Q1 and we are going to witness the same in this Q2 as well.
02:34But overall the execution is progressing very well and most of the projects are on schedule and the execution is going on as per our plan.
02:44Mr. Patwardhan for FY25 you have given a guidance of about 15-25% of revenue growth.
02:52Now in the last 3 years you have had a very strong growth trajectory be it in your revenues as well as your margins have more or less remained stable in the 9-11% of range.
03:02So going forward in the next 2-3 years what can one expect from ITD Cementations in terms of top line growth, the margin growth, what can be expected here?
03:12Well last year we grew at about 40-plus percent. Of course maintaining a 40-plus percent growth in the top line can be difficult.
03:22But given the focus on infrastructure development and with the new promoters coming into the company we expect the pace of work to pick up and we will continue to execute the projects that we have done in the past and hopefully the growth rates will be better than what we have seen in the current year.
03:41So with the new promoters coming into the picture of your segments if you have to see which of the segments do you think would get a greater push where you can see more orders, a stronger order pipeline because of the kind of management change which is happening?
03:57Well we are actually doing road projects, we are doing marine projects, we are doing hydroelectric power projects so as I said the focus is going to be on these sectors. We are doing building projects so the focus is going to be on the areas where we have the expertise to execute the projects and that is what we will continue.
04:16Of course there could be some new areas which may come up but it's too early to talk about those right now.
04:22And how is the order book evolving? You were at 18,000 crore in terms of order book size, you have done around 8,000 crore of execution last year. So execution of course on point, you are up 30% year on year in terms of your top line but how is the order book shaping up? Are you planning to expand that as well along with the kind of opportunities available?
04:41Well the order influence this year was a bit slow in the first quarter because of the elections and the results and all that but subsequently we have one order worth about 3,800 crores in the current year. Our order book today as of September is about 18,000 plus crores and after the end of the quarter in October we have one another order worth about 16-1700 crores.
05:01So there is a good visibility of new tenders, new orders coming up for bidding and we are looking at that very closely and we are hoping that the order inflows in the year will go up significantly in the next 6 months.
05:16Do you expect H2 to be much stronger, meaningfully stronger because you had given a guidance of 12-15,000 crore if I am not wrong in terms of order book or new order wins for this current financial year?
05:34Well you need to keep in mind that in H1, first 3 months were really very slow in terms of new order flows. We hardly received any orders in the first quarter. So obviously we expect Q3 and Q4 to be much better than H1.
05:49But how likely are you to hit that 12,000 crore in terms of new orders?
05:55Well there is a large pipeline of orders that we are looking at and we are submitting our bids. You know the timelines can go a little bit here and there. But we are pretty confident that the order flow will continue in H2 as well.
06:09So the commentary remains on the 12,000 order inflows that we should be looking out for. But on these new order inflows, what is the kind of margins that one can expect? Would it remain in the 10-11% of range or we can see upside from these levels?
06:24Well there could be upside on some projects but we have seen our margin profile improving over the last 3 years. So we will of course endeavour to perform better, execute the projects faster and improve on our margins. But I guess the margins at least in the near future would be in the range of 10-11%.
06:42Going forward we need to see whether we can improve on the margins and obviously our endeavour will be to do that. But for this year I think we can expect around 10-11% EBITDA margins.

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