Release Date: February 11, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Ashoka Buildcon Ltd (BOM:533271, Financial) has a strong order book of INR16,457 crore as of December 31, 2024, with significant contributions from road and railway projects.
- The company has entered into share purchase agreements for divestment of five subsidiaries, which is expected to enhance liquidity and reduce debt.
- Ashoka Buildcon Ltd (BOM:533271) has received several letters of acceptance for new projects, including significant contracts from MSRDC and BMC, indicating a robust project pipeline.
- The company reported a 30% year-on-year growth in EBITDA for the nine months of FY25, showcasing improved operational efficiency.
- The government’s increased budget allocation for infrastructure projects is expected to provide strong growth opportunities for Ashoka Buildcon Ltd (BOM:533271).
Negative Points
- Ashoka Buildcon Ltd (BOM:533271) reported a 16% decline in total income for Q3 FY25 compared to the same period last year.
- The company’s standalone debt remains high at INR1,466 crore, which includes significant working capital loans.
- There is uncertainty regarding the completion of certain asset sales, which are subject to regulatory and lender approvals.
- The interest cost has increased on a quarter-on-quarter basis, impacting profitability.
- The company expects a potential shortfall in achieving last year's revenue numbers, with a possible decline of 2% to 3% for FY25.
Q & A Highlights
Q: What is the current order pipeline for NHAI biddings?
A: NHAI, along with MoRTH and NHIDCL, has announced projects totaling 3,400 kilometers, amounting to approximately INR1,11,000 crore. These projects are currently in the pipeline. - Satish Parakh, Managing Director
Q: What are the revenue and margin guidance for FY26?
A: We expect a revenue growth of 10% to 15% over FY25, with margins in the range of 10% to 11%. - Paresh Mehta, Chief Financial Officer
Q: What is the status of the monetization of the 11 HAM projects?
A: Approximately 70% of our assets have received in-principle approval from NHAI, and 50% of lender NOCs have been obtained. We aim to offload certain HAM projects by March 31. - Paresh Mehta, Chief Financial Officer
Q: How is the company planning to reduce its debt levels?
A: We expect to reduce approximately INR4,000 crore of debt by March through the sale of BOT and HAM projects. The debt on the stand-alone EPC business will also be reduced as we receive payments from project sales and recoveries. - Paresh Mehta, Chief Financial Officer
Q: What is the status of the green hydrogen project?
A: We have entered an MOU with the Bihar government for a green hydrogen project powered by solar energy. This project is in the early stages, and further updates will be provided as it progresses. - Satish Parakh, Managing Director
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
