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00:00We've got with us the management of Jai Kumar Infra Projects, Nalin Gupta, who joins in to
00:05talk to us about the quarter that's gone by and the outlook for the company going into F525.
00:10Mr. Gupta, thank you very much for joining us this morning. It's been a good year.
00:13You've seen a 26% growth in your top line. Bottom line is also looking fairly healthy.
00:18Margins are pretty much flat, so there's been no deterioration on that front. You want to take us
00:23to what went behind those numbers? And as we go into F525, what sort of growth projections are
00:28you putting out for yourself? Well, so I would say that, of course,
00:33this year has been a historical year for Jai Kumar, wherein our Audible stands at 21,000 crore plus
00:41as we talk on 31st March 2024. And I think the infra segment itself, I would say it's
00:48on a very positive note. We can see substantial growth in all these states, pan India, and it's
00:55looking very optimistic and we are very bullish about the infra segment. And all the companies,
01:01I guess, I would say who have the ability to perform well are flooded with orders.
01:06So this year, we have clocked like more than 11,800 crores worth of orders. And in this Q1
01:15itself, we have been L1 in projects worth around 4,700 crores. So yes, we are very,
01:22very bullish. We are very positive about this segment. And for the F525, we expect a revenue
01:29growth of around 15 to 16 percent minimum, and wherein we should clock at around 5,600
01:37crores is approximate target that we look at. But of course, once the Q1 top line revenues are
01:44coming up, we should be in a position to really further revise our guidance looking at the
01:50execution of the Q1. So the new projects that we have bagged, we should be looking at the contribution
02:04coming from that from Q2 onwards and from the next year onwards, it would be fully contributing.
02:12Very quickly, Mr. Gupta, and we've talked to a few of the infra players and they've all indicated
02:16that post-election that quarter usually historically is fairly slow. And things only
02:21start picking up in the second half of the year. Is that how you feel as well about business in
02:27terms of order wins, pipeline? Is that on point? Or do you feel like those things are slowing down?
02:32And secondly, you mentioned you've got a very healthy order book. Is any of that going to
02:37convert into revenue in this quarter? When I say this quarter, I mean the first quarter of F525.
02:42Mr. Gupta, because I also have a related question. So is there a possibility of any
02:48spillovers? Because usually Q4 is generally the biggest in terms of awarding of projects.
02:54But because there were the general elections, do you think that the spillover will come through
02:59in the subsequent quarters, maybe not in the first quarter, but the second quarter,
03:02third quarter onwards? Well, so I would say that firstly to reply both of your questions.
03:08It's like I would say that in this Q1 also there should be a positive outlook towards
03:14the order book because there are a lot of contracts which we have already bidded for
03:20post these elections. They should be awarded. So like we are, as I already mentioned,
03:26we are L1 projects worth around 4,700 crores, mainly coming in from two MSRDC projects,
03:32which is for the multimodal corridor, which is an excess controlled highway. That's been,
03:39so there we are already L1 in two projects and that's for everyone because they were around
03:4435-40 projects where many companies, they have got orders from that particular corridors.
03:51So there were three, Poonaring Road, Nandur Jalna and the Virar-Alibaug corridor. So there are
03:59orders which people have, the bids have already opened and it's in the social media. So I can
04:05mention that we are also L1 in these two projects and an additional project of
04:09500 crore for the Harinagar building of MVCC. So there are, I think that there should not be
04:18any negative impact. Yes, you should be seeing rather the order books getting converted,
04:23the L1s being converted into the order book in this Q1. So I feel there should not be really
04:30much impact and the tenders which will be bidding in the process of bidding in this
04:35Q1 period, I would say, may spill over post-election after the state elections.
04:40So that may be the case, but I think in terms of order book, I look at it very in an optimistic way
04:50and we expect that we should be able to easily back orders of 6,000 to 8,000 crore in FY25 as
04:55well. Right. Mr. Gupta, help us understand what business is going to look like over the next
05:00couple of years. So a little more out in terms of timelines. We've seen that metros forms the
05:07largest contributor in terms of revenue for the company. Going ahead, are there any plans to
05:12diversify a lot more into it, maybe roads, water projects or should we be anticipating that the
05:18next two to three years with the kind of order pipeline that you already have, it's going to
05:22largely continue to remain metro dominated? Well, I would put it in a other way. It's like
05:29it totally depends on the company is into execution of specialized construction,
05:36which is of elevated expressways, elevated corridors, elevated metro, underground metros,
05:42tunneling. So now when you make tunneling, whether it is for road or metro, the tunnel boring machine
05:48operations still remains the same. So I would say that as of now, the order book breakup, if you see,
05:5527 percent comes in from metro and around 39 percent comes in from elevated expressway and
06:02elevated flyovers. And another, I would say, close to 24 percent comes in from roads and road tunnels
06:11and 11 percent is for the other areas like water and buildings, etc. So I would say that the
06:17order book keeps changing depending upon the order inflow coming in from different segments.
06:24But the company always tries to focus into projects which are more towards the structures,
06:29whether it is road tunnels, whether it is metro tunnels, whether it is flyovers or elevated metro.
06:34So they are somewhat, I would say, similar in nature. And we don't go in for pure, pure road as
06:41such. So the margins, EBITDA margins impact, we are able to control. And currently also the order
06:47book that we have backed is in the similar margin. Mr. Gupta, just a final question on debt. I'm
06:54looking at your net debt to equity ratio, which is negligible. You will have a lot of orders that
06:59you are going to have to come through based on execution. I reckon that that will
07:03have a fairly large outlay when it comes to working capital. My question then is that,
07:08are you one, comfortable with your current net debt levels? I suppose that you will be. But
07:15do you think there's a chance that this debt will move higher over the course of the next few
07:20quarters? Well, so if you look at my gross debt equity ratio, as of 31st March, we are at only
07:27just 0.22x the debt equity ratio. And at net level, we are at 0.03. So almost a debt-free company.
07:34So of course, you would appreciate that the debt levels are almost, it's like a debt-free company
07:39for J. Kumar. So with the financial discipline we have, we are very comfortable and we don't
07:44anticipate any sort of problem in maintaining this with the help of debts. And yes, for this
07:52new project that we have backed, we'll be surely incurring some additional CAPEX as compared to
07:57the usual 100 to 150 crore CAPEX that we do every year. Because that's because of the nature of job
08:03and the size of jobs that we have backed. So in the coming two years' time, around 400 to 500
08:09crores worth of additional CAPEX that will be incurring, which is mainly for the tunnel boring
08:13machine of the Goregaon-Mulloon Link Road, which is one of its kind diameter of tunnel.
08:21Right, sir. Congratulations. Good luck for FI25. It promises to be exciting. And of course,
08:27hopefully, all those plans fall into place sooner than later. We'll hopefully see you soon. But
08:32thank you very much for joining in.