GPT Infraprojects Limited (GPTINFRA.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the GPT Infraprojects Limited Q2 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Atul Tantia, Joint Managing Director and CFO of GPT Infraprojects Limited. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone, and a warm welcome to the GPT Infraprojects Limited Conference Call for the second quarter ended September 30, 2025. I hope you all had the opportunity to review the financials as well as presentation released yesterday. I'll briefly cover the key highlights for the quarter. Before we begin, I would like to take a moment to honor the memory of my father and beloved Chairman, Shri Dwarika Prasad ji Tantia, who left for his heavenly abode on August 17, 2025. He was our North Star, a true karmyogi, whose life was a testament to purpose and perseverance. He showed us that greatness lies in humility and that integrity is the finest legacy. A true leader who lived each day with strong sense of family values and his legacy in business and community services profound. Through his vision and actions, he left our world richer, wiser and better than he found it. We thank everyone who reached out to us in this time of grief. We pray that his noble soul finds eternal peace at the Lotus feet of Lord Narayan. Now moving ahead to our financial performance for the second quarter and half year ended September 30, 2025. On a half yearly basis, revenue grew by 12%, both on stand-alone and consolidated basis with revenue from operations at INR 579 crores on a stand-alone level and compared to INR 517 crores last year. And on a consolidated basis, revenue stood at INR 591 crores compared to INR 529 crores last year. In both the stand-alone and consolidated numbers, we have set the target of 20% growth in this fiscal year. This growth will be majorly driven by significant execution in the Infrastructure segment, which accounts for nearly 90% of our revenues. Our stand-alone EBITDA for the quarter stood at INR 42 crores compared to INR 40 crores representing a growth of 4.5% Y-o-Y. And EBITDA for the half year was INR 84 crores compared to INR 74 crores last year, that is a growth of 12.5%. In terms of consolidated EBITDA, the same came in at INR 43 crores for the quarter ended September 30, 2025, compared to INR 33 crores last year, representing a growth of 28%. EBITDA for the half year stood at INR 89 crores compared to INR 67 crores on a consolidated level last year, representing a growth of 33%. We are confident of maintaining a long-term EBITDA margin of 13%, which we have guided historically as well. With the improvement in revenue, the operational efficiencies have helped us in ensuring the long-term EBITDA, and we expect the same to be maintained going forward. There has been an increase in the profit after taxes with consolidated PAT for H1 FY '26 at INR 45 crores, growing by 32% from INR 34 crores in H1 FY '25. Stand-alone PAT for Q2 FY '26 was INR 44 crores, increasing by 12% compared to INR 39 crores last year. Now in terms of our segmental performance. Our Infrastructure segment reported revenue of INR 543 crores for the half year ended September 30, 2025. This segment continues to be the backbone of our business, contributing almost 94% of our total revenues. The key contracts for the Infrastructure segment continue to perform well with contracts like NHAI, Ganga Bridge, Prayagraj, Mathura, Jhansi, Majerhat, Byculla driving a major part of our revenues. The segment has an order backlog of INR 3,153 crores. The Sleeper segment generated revenues of INR 43.8 crores in H1 FY '26 compared to majorly driven by the outstanding performance in domestic business and also some contribution from the South African subsidiary. As we move ahead, we are confident in our ability to capitalize on this positive momentum generated by these factors. Our focus on maintaining a robust and healthy order book, coupled with continuous efforts to optimize our financial structure lays the foundation for our growth trajectory. As on September 30, 2025, we have an unexecuted order book of INR 3,591 crores, representing 3x our FY '25 revenues, providing strong visibility. The order inflow during the year was INR 696 crores. We are targeting INR 2,000 crores for the year. In this year, we have bagged an order of INR 195 crores from TIPSP, which is a concessionaire for the San Pedro port in Ivory Coast. This is for testing and commissioning -- installation Testing and Commissioning of a Conveyor Belt System for the port in Ivory Coast. Thank you, and we look forward to addressing any questions or concerns you might have regarding our financial performance and future prospects. I will now request the moderator to open the floor for any question and answers. Thank you.

[Operator Instructions] Our first question comes from the line of Rehan Saiyyed from Trinetra Asset Managers.

So I have a couple of questions. First on the revenue side. So the consolidated revenue saw a sequential decline this quarter despite a strong order book. So could you help me understand what led to this softer quarterly performance? Was it size related [indiscernible] or how is it kind of a problem on clients at clearance? This is my first question.

Yes. So the softer execution this quarter was mostly on account of monsoon, as you might be aware. And this time, the monsoon has slightly delayed, and there was almost 20% increase in rainfall for the country as a whole and specifically in the areas that we normally operate, whether it is Mumbai, whether it is West Bengal and UP as such. So that is the main reason why the -- there was a slight dip in the revenue performance for this quarter. However, having said that, we are quite confident that post the monsoon, the operations are doing quite well, and we should be able to make that up in the next 6 months.

Okay. And my second question is around your order book. The order book now stands at INR 3,500-plus crores, nearly 3x of FY '25 revenue. So how much of this is executable over the next 12 to 18 months? And how should we think about the execution run rate going ahead?

So like I said in the opening remarks, we expect the execution run rate to be 20% growth every year. This order book represents -- is to be executed over 2.5 odd years of INR 3,600 crores. So that should be executed in the next 2.5 years.

And last one bookkeeping question from your side. Like so our ROE and ROCE have moderated in FY '26 versus FY '25. So how do you plan...

Sorry, voice is breaking up.

Am I clear now?

Slightly better...

Yes. So my last question is on the ROE and ROCE side. So now our ROE and ROCE have moderated in H1 FY '26 versus FY '25. So how do you plan to improve return ratios? And what internal threshold plan is targeting for selection going forward?

So ROE and ROCE have not moderated because it is not an annualized number that has been given. So if you annualize it, it will become -- it is 25% odd in terms of ROCE and 20% -- close to 18% to 19% in terms of ROE. That it's not an annualized number.

Our next question comes from the line of Guru Darshan from Kitara Capital.

Am I audible?

Yes sir, please go ahead with your question.

I just have one question sir. What is driving including EBITDA margin and the consolidated...

Sorry, I can't hear anything. Sorry, I can't hear anything you said.

Can you hear me now?

Yes, much better.

Yes. I just want to understand what is driving EBITDA margin increase in Q2 FY '26. So almost 11% to 15% in the current quarter. Is it mainly related to contract? I just want to understand the drivers.

It's not 11% -- 11% to 15%, it's mostly on the consol level you're saying. So that's mostly on account of last quarter, there was some foreign exchange loss in some of the foreign exchange subsidiaries in terms of mark-to-market loss. That is no longer there. And also stronger execution for the domestic sleeper business also helps the EBITDA margin improvement. Having said that, we expect long-term EBITDA to be between 13% to 14%. That's what we have historically guided, and that's where we should land at.

Yes. I mean at least for the current financial year, it should be somewhere around 15% EBITDA margin. Because the half year also, we have done around 14.7%.

Yes. So we will see an annual EBITDA between 13% to 14% going forward as well.

[Operator Instructions] Our next question comes from the line of Diya Jain from Sapphire Capital.

Hope, I am audible?

Yes. Yes. Please go ahead.

You're targeting a 15% growth for FY '26. Am I right?

20%.

13%?

20%.

All right. And what do you think for FY '27 and FY '28?

I think this is the order book, the next 3 years, we should be at a 20% odd growth. So plus/minus a couple of basis points. But I think that 20% is something that is quite achievable over the next 3 years.

All right, sir. And any investment plans as of now?

In investments in terms of CapEx, we do CapEx for the contracts. We are looking at -- we have recently also set up steel fabrication workshop with a capacity of 10,000 metric tonnes with an outlay of almost INR 20 crores, INR 25 crores. And we are also looking at some other aspects of railway works, which once it materializes, we'll come back to the market and announce the same.

All right, sir. And you mentioned that in your order book execution time line will be 2.5 years?

Correct.

[Operator Instructions] Our next question comes from the line of Parth Kotak from Plus91 Asset Management.

Sir, just one bookkeeping question. Depreciation has gone up by about 50% half year over half year, while the asset is not reflecting the same. What would be the reason for the same?

So there have been some recent additions in the -- how would you call... It's not increased by [indiscernible]. It's almost 32% from INR 3.7 crores to INR 4.9 crores or even on a consolidated basis also from INR 4.2 crores to INR 5.4 crores. I don't know where the number of 50%.

Yes. So the H1 number has gone up from INR 8.13 crores...

Yes. So last H1 -- last quarter, it went up because, like I said, because of the steel fabrication workshop that we had commissioned. So that was a significant number. So it has gone up because of that. But other than that, there's no other significant change in the number.

Our next question comes from the line of Darshil Pandya from Finterest Capital.

Am I audible?

Yes, you are audible. Please go ahead.

My first question is with regards to the short-term borrowings that are almost in a 50%, 60% jump from the March numbers. What has led to this? And how things will be in the next half or next year?

So short-term borrowings have temporarily gone up. Like I said, because of the monsoon, there was some delay in the, what you call, execution and some of the invoicing as well to the customers, slightly increase in the working capital days. This, we expect to again normalize back to the March '25 number by the end of the year. So started we're seeing a dip as on date as well. And by March 6, we should see that number back to the March '25 number as well.

Understood. Because our main objective was to reduce the interest cost. That was the reason we also did...

So we have reduced the interest cost. It has been partially utilized because of the heavy monsoon in this period, but that is a flexibility that the management maintains in order to do faster execution as well.

Understood. Second question would be on the execution front, sir. Since we are guiding for this 20% growth, our H2 needs to be quite heavy compared to H1. So how are we prepared for this? I mean, how will we achieve the targets that we are doing? Because quarterly basis, we have to touch around INR 380 crores, INR 400 crores of run rate. So how are we getting ready for this?

So H1 is typically companies of our industry is typically 40% and 60%. So if you see -- if you assume that this number is 40%, then we would be doing the 40% growth this year on this basis itself.

Understood. Fine. And one final question would be on the numbers front, sir. Sir, since we have a very good order book and we are now bidding for bigger projects also, and we have quite done well over the last 1, 2 years since we have been tracking you. So just to understand what stops us to go aggressive on this number front? Can we go for 25%, 30% or even higher number base compared to other infra companies? Because there are some companies also who are guiding for this. But I just wanted to -- I just wanted your view to understand how things are with us. What stops us to go aggressive on this?