Cemindia Projects Limited (509496) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Cemindia Projects Limited Q1 FY '27 Earnings Call hosted by ICICI Securities Limited. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Mohit Kumar from ICICI Securities. Thank you, and over to you, sir.

Thank you, Manav. Good afternoon. On behalf of ICICI Securities, I welcome you all to the Q1 FY '27 earnings call of Cemindia Projects Limited. Today, we have with us from the management, Mr. Jayanta Basu, Managing Director; Mr. Nitesh Sharma, CFO; and Mr. Rahul Agarwal, Head of Investor Relations. We will begin with the opening remarks from the management, which will be followed by Q&A. Thank you, and over to you, sir.

Thank you, Mohit. Good afternoon, everyone, and thank you for joining us today for the Q1 FY '27 results con call. So this is Nitesh Sharma, CFO of Cemindia Projects Limited. Before we begin, I would like to mention that our discussion today may include certain forward-looking statements relating to Cemindia Projects. These statements are based on management's current expectations and assumptions and are subject to risks and uncertainties that could cause actual results to differ materially. I shall begin with an overview of the financial performance for the quarter, following which our MD, Mr. Jayanta Basu, would take you through the company's operational performance. So we are pleased to report a healthy start to the financial year with continued growth in both revenue and profitability. During Q1 FY '27, operating income increased by 6% year-on-year to INR 2,721 crores from INR 2,576 crores in the corresponding quarter last year. This reflects a steady execution across our project portfolio. EBITDA grew at 9% year-on-year to INR 285 crores compared to INR 261 crores in Q1 FY '26. EBITDA margin improved to 10.5% from 10.1%. Profit after tax increased to INR 141 crores from INR 137 crores in Q1 FY '26, representing a growth of 3% year-on-year. Order flow continues to remain strong. During Q1 FY '27, we secured orders worth INR 8,519 crores. In July, we added another INR 1,247 crores of new orders, and we are presently L1 in projects valued at approximately INR 990 crores. Overall, this represents new orders of approximately INR 10,756 crores, providing strong revenue visibility, supporting growth and execution momentum over the coming quarters. Now I would request Mr. Basu to take you through the operational performance.

Thank you, Nitesh, and I welcome all of you to this con call Q1 '26-'27 results of Cemindia Projects Limited. As you can see that our Q1 performance for this year has been steady compared to previous quarters. EBITDA around 10.5%, PAT 5.2% and revenue around INR 2,700 crores, which used to be INR 700 crores 3 years back per quarter. So that is a substantial increase. And there are plenty of opportunities. As you can see that our work in hand position is quite healthy as on date. Today, INR 31,000 crores -- around INR 31,000 crores is work in hand, which used to be normally INR 18,000 crores, INR 20,000 previously as you know. And we will be continuously pursuing to secure more jobs in the segments where we want to work. Interestingly that in first quarter, we have secured more than INR 8,000 crores of job as compared to INR 2,900 crores secured during first quarter of last year. So almost 3x increase in work secured in this quarter compared to previous year same quarter. So I hope that the same momentum will be maintained. And that's because there are a lot of opportunities. Naturally, we have to also internally be prepared to grab those opportunities and execute them. And we are prepared for that. We are especially focusing on our team and some transformations also is going on. We are focusing mostly on digitalization of various activities, technology part, use of technology, basically, use of technology in construction method, use of technology in project planning and monitoring method, usage of AI, all these things are being pursued. There is a routine follow-up from the Board members and the senior management team. So we are getting prepared also to have -- to handle the revenue jump what we are expecting now from this opportunity. About the present projects, as all of you know -- mostly all of you know that we have secured 2 metro jobs, one in Pune, one in Delhi Metro underground. Those are under mobilization stage. Pune has progressed a lot. Delhi Metro just started. And in addition to that, we have secured a job at West Bengal, Burnpur for Steel Authority of India Limited, which involves huge quantity of structural fabrication work, which we are used to normally because we have done plenty of airport work very recently. So that is something. And beyond that, from the group also, we have secured around INR 6,000 crore jobs and 2 of them are major. One is at Munger for -- which is an elevated corridor plus [indiscernible] and Mor Sagar in Rajasthan irrigation canals and stuff like that. So I think the opportunities are there. We are doing well. So I'll be happy to answer any questions going forward. So that's all from my side now. Thank you.

[Operator Instructions] We have our first question from the line of Jainam Jain from DAM Capital.

Sir, congratulations on good set of numbers. Sir, my first question is we have received order for civil work for HVDC substation in Rajasthan. I'm assuming that we have received this order from one of our group companies. And I wanted to understand, like, whether we are planning to expand our EPC work in T&D segment as well.

T&D segment, no because I don't know which one you are mentioning. We have received the order for Mor Sagar.

HVDC, substation building work which we have got.

Which is Mor Sagar irrigation. HVDC work is a very small work, which is a part of existing, I think, airport terminal. So it has nothing to do with the T&D segment. And we do not any plan to go through that segment right now.

Okay, sir. And second, sir, we have recently approved a fundraise of INR 5,000 crores via QIP. Sir, we are already a net cash company, and we have a gross level of INR 18 billion. So against that fundraise of INR 50 billion is a quite significant number. So just wanted to understand the purpose of the fundraise.

Yes, it is to -- as you know that if you have to grow, you require money as simple as that. And many jobs require new plant and equipment and investment for the various categories of investment. It's a capital basically. So anticipating that coming growth, we have decided to go ahead with this QIP.

We have our next question from the line of Bhalchandra Shinde from Motilal Oswal Financial Services.

Sir, I would like to know what kind of order inflows we are expecting for the FY '27? And across the segments, if you can mention where we are seeing a good traction for the orders?

Yes. I think our target is to secure around INR 25,000 crores -- around that in the whole year, this FY '27. We have already in first quarter, secured INR 8,000 crores. So balance another INR 20,000 crores -- INR 17,000 crores, INR 20,000 crores not a very -- I don't think it's a challenge, ending up with INR 25,000 crores of new orders this year. And mostly, it will be underground metro, marine, road tunnel and PSP hydro projects in this segment and data center as well. So if you see that in total at various stages, like some in tender, some NIT, notice inviting tenders, some -- already submitted some bid, some in the horizon, close to INR 90,000 crore plus visibility is there today -- opportunities are available today. So that is long and short about the prospect.

And on the execution front, on the existing order book, what kind of execution cycle we should expect? And should we expect over the next few quarters, the execution growth will be much better than this quarter?

Yes. Sometimes what happens some 1 or 2 of jobs create problem, okay? Otherwise, normally execution is 3 years' time cycle. You can -- roughly, you can estimate what will be the progress. Apart from that one-off or two-ff of jobs, we have got a monsoon effect next quarter. So I am not very particular about Q2 because Q2 for all the company goes a little timid, but Q3, Q4 progress will be definitely better than Q1. And some of the jobs which we have secured recently, they'll start producing also from quarter 3. So yes, the progress will be ramping up in Q3, Q4.

We have our next question from the line of Dhananjay Mishra from Centrum Broking.

Congratulations on very strong order inflow. Sir, in marine segment, apart from this Vadhvan order which we are expecting, so which -- any other new project in port segment we are expecting, some order?

Yes. Marine, Vadhvan, of course, is there. I mean, all you know. And then we have a few jobs overseas -- a few jobs overseas at Oman and 1, Middle East. That is in UAE, 2 marine jobs we are pursuing. Bangladesh also we are pursuing 1 or 2 jobs, all are marine. And we have got Tuticorin outer harbor, which will come eventually sometime. Vizag port, there is some job. So we have altogether, roughly speaking, INR 15,000 crores of marine jobs in the pipeline. I mean, towards the lower side, if you say INR 15,000 crores of marine jobs in pipeline, yes.

Okay. So INR 15,000 crores for this financial year in terms of pipeline or it will...

I mean INR 15,000 crore jobs we have to tender and some of them will be matured. Some of them will gain, some will lose. So today, we are dealing with the tender of INR 15,000 crores of marine jobs.

Okay. And this road tunnel job we have mentioned, so which kind of projects we are expecting in this road tunnel?

See, now slowly, slowly, the focus on the government is shifting from the elevated to underground because of obvious reason that space congestions and elevator does not look good. It is not only 1 or 2 jobs. Like Bangalore, we have got road tunnels. Similarly, in Mumbai also, as you know, there are a few road tunnels. So there will be plenty of such kind of business going forward. Specifically, if you ask me, then there are jobs in Brahmaputra River. Below Brahmaputra, there are road tunnels. And in Mumbai, Gaimukh road tunnels, Bangalore road tunnels, these are very specifically you can see now.

Okay. And how is the competition in this segment, in tunnel segment overall?

Competition is part of our business. It will remain as usual.

Okay. Okay, sir. And we are maintaining our -- this FY '25 guidance -- FY '27 guidance in terms of revenue?

Yes, yes, yes.

We have our next question from the line of Vaibhav Shah from JM Financial.

Sir, what would be the Adani Group share in the current order backlog?

The orders which we have secured, step by step, I'll tell around INR 8,000 crores we have secured. Out of that INR 6,000 crores from Adani Group and INR 2,500 crores from the outsider. And today, backlog of INR 31,000 crores, Adani will be around 53%. Say, 50-50, almost 50-50 now as on date.

Okay. And incrementally, which we are targeting roughly INR 170-odd crores of inflow in the remainder of the year, that also should be broadly in the similar mix from group and outside?

We cannot say because if we get -- it depends upon how much we secure from external, it depends upon that. So part of this may vary.

But the pipeline, which you mentioned roughly INR 90-odd crores, that is -- mix in that would be similar, 50-50 from group and outside, the prospect pipeline?

So I have to calculate now. You can presume same, 50-50.

Okay. Okay. And sir, what was our gross debt as of June and the cash level?

At INR 1,000 crores. The gross debt was at INR 1,000 crores and net debt position was at INR 700 crores.

Okay. Okay. And sir, lastly, on the Bangladesh order, so what would be the outstanding backlog and the receivables? And has the execution normalized now?

Bangladesh, I'll answer your last question first. The execution is absolutely under control. And we hope by a few months from now, which is September or October, we'll be able to complete the whole job as far as we are concerned. And receivable is around INR 128 crores. And there is some retention there. So this is a normal payment cycle. So I don't think there is any issue on that.

Okay. Okay. And sir, we maintain our -- so revenue guidance would be around 20%, 25%, which you mentioned last time? Growth?

Yes, yes, yes, 25%.

We have our next question from the line of Aditya Sahu from HDFC Securities.

I did get cut out in between. So in case if I may have a few questions that might be repeating. My first question was with respect to the L1 in the total order book. So of the INR 31,000 crore order book that we have, how much of that would be L1 as on date?

No, INR 31,000 crores job we have -- we are working in hand. I mean...

Secured order book, yes.

Already secured, already available with us.

Okay. And so the L1, how much L1 do we have as on date, if you get that.

Around INR 1,000 crores.

Understood, sir. And on the Vadhvan Port execution, I think we were facing some issues on that front even during the previous quarter. So how is that panning out right now?

Vadhvan Port execution is yet to start. There are a lot of issues, have to be sorted out, which is beyond our purview or our scope. So we expected that those will be, I mean, done, but it is still going on. But things are moving very positively. Government has taken very active actions. There are cooperations from all corners. I hope that it will be resumed soon. But it's not in our control. We have to wait and see.

So any time line that you are seeing over here in terms of the execution? Or are we still waiting on that?

I mean if we start the work, if there's no hindrance, we can tell that is the time line. But we don't know when we'll be able to start the work. That is, as I told you, not in our hands.

Okay. And on the bid pipeline, if I'm not wrong, that would be INR 90,000 crores would be total bid pipeline as of date?

Yes. I mean the bid means it is not totally under bid, bids plus something which is visible, which will be bid tender is yet to come, things like that.

Understood, sir. Understood. On the CapEx front, I think last time we had guided a CapEx of about INR 350 crores to INR 400 crores. So like is that similar on the CapEx front? And what would be the CapEx that we would have done in Q1?

Q1, we did INR 80-odd crores. INR 81-odd crores addition.

Yes. So this year also, it will be, as you said, INR 350 crores, INR 400 crores. But there could be some exceptional jobs where we may have to buy some extraordinary plant and machinery. And in that case, the CapEx scenario is totally different. Otherwise, normally, it will be around INR 350 crores, INR 400 crores.

Okay. Okay. Okay. Understood, sir. And on the net debt to equity, how much would that be for the month of -- as on June, if you can help me with that?

So as on June, it was -- net debt to equity was 0.28x.

0.2, understood, sir. In the Bangladesh order project, we were earlier sort of planning to get the execution done by the month of -- by June '26. And so now we are guiding that at September '26. So like what would have caused that change in the time line over here?

Actually, this execution is -- I think it was planned earlier also around September, October, which we are able to maintain. Now what happened during the monsoon which has just started now, it is sometimes unpredictable that whether we'll be able to work or not work because [ Brahmaputra ] is a perennial river and the fluctuations of the river water is quite high. Sometimes it will be -- current is very high. So it is a matter of chance.

More of a climate issue, monsoon delay, is what I would...

So what happened that we thought that we'll not be able to -- what we are doing actually, we are doing foundation for the transmission tower. And these are done in deepwater. And sometimes the whole work goes underwater, so it is very difficult to construct, but we have a different technology being adopted now. We will be overcoming this situation. So we'll be able to complete the job as per our plan, what we have done earlier. So I don't think there is any issue on that.

Understood, sir. Just one last question. If you can provide the receivable days and the net working capital days as on June '26.

So trade receivables stood at roughly 69 days, which includes retention as well. And the net working capital was around 120 days.

120 days.

We have our next question from the line of Manish Ostwal from Nirmal Bang Securities.

First question on the project execution side. We are hearing, sir, there is some kind of labor and the technical people shortage in the project execution. Are we seeing in our project execution this kind of problem or how we are tackling the situation?

I think you are right that technical, I don't know, but labor shortage is always a problem. So labor prices is always there because the volume of construction has increased leaps and bound. If you see the construction we used to do in our country before 5 years back and now it is quite high. So naturally, that is one number. Number two, most of our, whom we call, workmen, they are now migrating to different kind of professions, which is a little bit of white-collar type of job. So that is a challenge. It is not just for us. All the Indian construction companies going through the challenge, and we are trying to handle that. So yes, you're right. There is some issue on the labor shortage.

Okay. The second, sir, you said the company is planning to raise INR 5,000 crores from QIP. So the current order book is around INR 31,000 crores, and we have a net worth of around INR 2,500 crores. So the kind of capital you are raising, that means the company is seeing a superlative growth in order books in the next 2, 3 years, maybe INR 1 lakh crore order book, that is what the signal from the growth of capital we should take it?

Yes. I think it is up to you to speculate what is for that. But definitely, there is a planning which may not be fair on my part to reveal now. But definitely, it is related to growth.

Sir, the participant got disconnected. The next question is from the line of Rohit Natarajan from Axis Max Life.

Sir, my question is more related to the capability part of the company as in the sectors right now, we are focused on maritime structures, urban infra, industrial structure, data center, water, highway, foundation and specialist engineering and maybe some sort of a hydro dams and irrigation. Is there any other sectors that you wish to get into strategically?

Strategically, we have already started data centers, as you have seen that we secured some job in data center, and we have been executing them quite well now. So that is something a new addition to our capability -- I mean, our portfolio and then capability building up. Similarly, we are trying to get into the other prospective segments, maybe high-speed rail, nuclear power, those are in plan now, yes.

Got it, sir. Is there any other areas like residential, commercial buildings that can also be explored as such?

I don't think we have got any focus on residential building or commercial building. Of course, if we get some signature project because we already have the capability to do building work. We are doing that in a few places. Some signature projects, which makes sense for us to go, we'll try to do that.

Okay. And within power, if you could elaborate more on -- will you be doing the BOP part? Is that something or maybe some other allied works to the renewable transmission, if you could touch on those aspects?

Now power, as you know, that there are various source of power, like thermal, like hydel, PSP also part of hydel, then you have got solar and you have got wind, et cetera, et cetera. So thermal, as I said, that starts from the intake system and that is our intake power -- intake system of the power plant and then material handling system, coal handling system, which is stacker-reclaimer and conveyor and the transport tower, et cetera, et cetera. And then coming to the main power plant, of course, we don't do chimney and cooling water tower. Rest of the structures like turbine buildings and all that we do. And if we get an opportunity, we'll do that. That is thermal power is concerned. In hydel, it's basically mining job, tunnels, deep excavations and stuff like that, that is a common work we do. And we are doing also for few jobs like [indiscernible] and few jobs in North India. We are doing that. For solar, of course, it is a different kind of thing. Solar, we have got a huge amount of small, small structures like pile foundation that we are doing at Khavda in a mass quantity. And for the turbine part, wind turbine, I don't think there is -- not much scope available now, but we are definitely focusing something if we come in the marine front, like what has happened in the North Sea, the very big foundations for the wind power turbine. If it comes, we will be able to do that.

Got it, sir. One is that organically, you can develop this capability, qualification and obviously, the client access as such. But inorganically, will you be open to acquire a company and build up this capability, which one will be the easier route?

I mean, if you grow organically, which is easy because you know the subject, you have to grow by volume. And inorganic growth in a construction company is always difficult because it has to go through a learning curve, and that is very painful as we have seen before. It's always better to acquire some company. And as of this moment, we don't have such plan. In case if it comes, we have to plan for such kind of acquisition and go inorganically.

Got it, sir. So essentially, I was trying to understand this INR 5,000 crore kind of a QIP. Technically speaking, it should either build up the capability qualifications for some adjacencies, new sectors where you have not explored or maybe if it's going through organic route, I'm just trying to figure out how could we allocate such a big capital?

Yes. I think it's a mix of both. You have rightly assessed that inorganic growth also in plan. But definitely, I cannot say that which one -- which segment we want to grow and what will be the -- detailing part is not there. But yes, part of this capital will be infused for the inorganic growth as well. And organic also, if you have to grow, nowadays, sophisticated plant and machinery cost a lot. And in many projects, they are not allowed if it is beyond 5 years of old. So there is a lot of capital investments are envisaged even organic growth also. So put together, that was the planning.

We have our next question from the line of Abhinav from ICICI Securities.

My question is on the data center front. If you can help us understand what our scope is exactly? And how have we developed your execution capabilities in this? Will be number one. Secondly, in terms of megawatt terms, the order inflow that you have received, what will be the number in terms of megawatt? And thirdly, what will be the opportunity size in the coming quarters from this particular segment?

It is regarding data center?

Yes, yes.

Okay. Data center, see, first of all, I'll clarify that location-wise, we have already started working in Navi Mumbai. It is close to 1 year -- close to 1 year that we are working in Navi Mumbai. And we have got there 3 140 megawatt, correct? And 2 30 or 40 megawatt.

30 megawatt.

30 megawatt, 2. And 3, 140 megawatts. So these 5 are already in progress. Civil structures are already in place -- I mean, being constructed. In addition to that, we have secured some data center-related job in Vizag, which is basically civil structure for the time being. Electromechanical may come in the future. And there are some prospects in elsewhere also. So in terms of the megawatt, totally, it will be around -- yes, around 320 to 400 megawatt on which we are working now.

Yes. And in terms of opportunity in the coming quarters?

Opportunities are plenty, but we are trying to limit ourselves to a certain extent, which is possible by us to deliver, but there are a lot of opportunities there.

We have our next question from the line of [ Nikhil Kanodia from Sunidhi Securities ].

Congratulations on your highest ever order book. Sir, like you have said about your marine opportunity of around INR 15,000-odd crores is the bid pipeline and you have recently just now spoke on data center. So sir, I wanted to understand from you what is the total bid pipeline that is looking at? What is the hit ratio? And like segment-wise, if you can give the broad-based breakup of the opportunity size that is coming up in years to come?

So ballpark, INR 90,000, hit 15%. And if I have to divide in segment-wise, 6 segments, each you can say INR 15,00 crores to INR 20,000 crores, all an equal opportunity, except building, which is very less. Generally speaking INR 15,000 crores, INR 20,000 crores is the size of opportunity for per segment. And when I say per segment, it is marine, underground metro and airports and data centers, highway and bridges and some water.

Sir, hit ratio, you said 15%, right?

Yes. I mean, earlier it used to be better, 20%. The more you tender and the volume becomes more hit ratio also comes down with that. So 15%, you can imagine.

Okay, sir. Understood. And sir, of the INR 5,000-odd crores enabling resolution that you have passed for your QIP, I wanted to understand if there are immediate plans to raise any amount and what could be that deployed project. You mentioned that the entire thing can be towards building up capacities, plant machinery, everything. But what amount can we see? Like any plans that we might do some bit of it in this year itself? Or like what is the plan going ahead?

See, it is a time-consuming issue. Once it comes and then I don't think much of them will be utilized this year, progressively you have to utilize. So...

Timing purely depends on market plus the kind of visibility -- near-term visibility now as we are bidding and we are trying to convert these bids into orders. So the pure timing -- timing is contingent upon the market condition and the near visibility.

Sir, one last thing I wanted to know on your Q1 number basis, what is the position for your receivables, payables, retention and the consequence of the working capital basically?

So trade receivables, including retention, as I said earlier, stood at 69-odd days. And the overall net working capital was at 120 days, which also -- which comprised of inventory of around 30-odd days with WIP of 69 days.

Sorry, sir, I lost you. Inventory, you said is 29 days.

Inventories of 30 days.

30 days, okay.