Sanghvi Movers Limited (SANGHVIMOV.BO) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Sanghvi Movers Limited Q1 FY 2025/2026 Earnings Conference Call. [Operator Instructions] Please note that this call is being recorded. With this, I now hand the conference over to Mr. Pradeep Mehta, CFO of Sanghvi Movers Limited. Thank you. And over to you, sir.

Thank you, Saumya, for the introduction, and good afternoon, ladies and gentlemen. Thank you for attending Q1 FY '26 Investor Conference Call of Sanghvi Movers Limited. This is Pradeep Mehta, Chief Financial Officer of company. Along with me, Mr. Rishi Sanghvi, the Managing Director; and Mr. Gaurang Desai, the Chief Executive Officer of our company. I will quickly run through the financial highlights of the company for quarter ended June 2025. First of all, I will talk about the income from operations and EBITDA margin for this quarter. So, our company on a consolidated basis has achieved a total income from operations of INR 273 crores in Q1 FY '26 vis-a-vis INR 267 crores in Q4 FY '25 and INR 151 crores in Q1 FY '25. The segmental-wise revenue breakup and the respective EBITDA margin are as under. From crane business, we have achieved total income from operation of INR 159 crores and our EBITDA margin was 56%. And from our wind EPC, this is a renewal business, our total income from operations from Sangreen Future Renewables Private Limited is INR 106 crores and our EBITDA margin was 11%. For the project EPC business vertical, our revenue was around INR 7 crores and our EBITDA margin was 13%. So, our total income from operations for this quarter 1 FY '26 was of INR 273 crores and our blended EBITDA margin was at 38%. Year-on-year basis, the company has achieved top line growth of 65%. With respect to average capacity utilization for the Q1 FY '26 was 80% vis-a-vis 79% in the last quarter 4 FY '25 and 77% in Q1 FY '25. With respect to average blended yields -- our average blended yield for the Q1 FY '26 was 2.11% vis-a-vis 2.03% in Q4 FY '25 and 2.04% in Q1 FY '25. Our overall EBITDA percentage for the quarter ended June 2025 was 38% vis-a-vis 41% in Q4 FY '25 and 49% in Q1 FY '25. There is a reduction in EBITDA percentage, which is primarily on account of change in revenue mix. So, there is an increase in revenue in EPC business, renewal business, plus project EPC, which is volume driven and low EBITDA margin business. For the quarter ended June 2025, our net profit after tax was INR 50 crores vis-a-vis INR 54 crores in Q4 FY '25, and INR 41 crores in Q1 FY '25. This is a breakup of other income. We have achieved -- total other income is INR 7.4 crores in the first quarter, primarily on account of 2 reasons, which is we generated profit of INR 2.25 crores from the sale of cranes and there is the investment in mutual fund and FD, which has generated an interest on FD and gains from mutual fund to the tune of INR 5.15 crores in this quarter. Now, I'll talk about the CapEx that company has done in this quarter, June 2025. Company has done CapEx of INR 114 crores in Q1 FY '26, and we have added 21 various capacity cranes, aggregating to INR 94 crores and we have done a CapEx of INR 20 crores towards the purchase of other equipment. As on 30 June, 2025, the company has a fleet around 380-plus cranes aggregating to the gross block of INR 2,766 crores. This excludes some 30-plus cranes, which are shown under the assets held for sale. Now, I will talk about the proposed CapEx plan for FY '25, '26. The Board of Directors in the earlier meeting held on 20 May, 2025 have approved a CapEx plan of INR 246 crores for purchase of cranes, trailers, prime movers and multi-axle lines. Additionally, CapEx plan of INR 75 crores has been approved by the Board of Directors in the meeting held on 6 August, 2025 and taking revised CapEx plan to INR 321 crores. As per the revised proposed CapEx plan, we propose to buy around 75 to 80 cranes out of this CapEx and out of which 21 cranes already has been purchased in Q1 FY '26. Now, I'll talk about our investment in mutual funds. So out of surplus cash generated, the company has invested INR 131 crores in various debt funds and various mutual and short-term corporate bonds, arbitrage fund and commercial paper, which has generated average ROI between 7.73% to 8.48% per annum. This investment will be utilized as a growth capital for our engine to growth, business opportunity, including diversification. With this, I will now hand over the floor to Mr. Gaurang Desai, our CEO. Over to you, Gaurang.

Thank you, Pradeep. And once again, welcome. Thank you for attending this call. I'll talk about the order book position. The company has an order book position of INR 767 crores as of 20th of July, out of which we have booked revenue of INR 273 crores till June. Therefore, around INR 500 crores will be executed in this current financial year. And we are confident that going further, we will be able to secure additional orders above this order book position. We are also strategically aligned with India's growth engines, specifically in renewables, infrastructure and EPC. Our crane leasing and wind EPC are consistently winning high-quality projects. We continue to strengthen our market position across high-opportunity verticals. And strategically, we also maintain a healthy presence across sectors, be it thermal, green, steel, cement, refinery or highways and metros. Let me touch on the macro picture. So, India has added nearly 22 gigawatts of solar and wind capacity in H1. That's 56% increase over year-on-year. Cement also grew 9.2% in May, June and plans to add another 43 million to 45 million metric tonne capacity in FY '26. The crude steel production stood approximately 40 million tonnes, registering 11% growth on a quarter-to-quarter basis. India is entering major infrastructure build-out phase, and we are well positioned as a company to take advantage of that. If I had to put some numbers, INR 3.4 lakh crores worth of road and expressways tenders are planned in FY '26, expansion of metro road in 26 cities and airport modernization in Tier 2 hubs. And there's a strong push on rail logistics, green hydrogen, et cetera. These initiatives are high-volume equipment needs, especially in lifting transport and EPC areas, where we have tremendous strength as a company. With a strong growing order pipeline, sectoral tailwinds, we are very confident to deliver sustained performance in FY '26 and even beyond. With this, I would like to thank you once again and hand over to our Managing Director, Mr. Rishi Sanghvi. Over to you, sir.

Good afternoon, everyone. Thank you for taking the time to join us, and we really appreciate the opportunity to speak with you. At Sanghvi Movers, we are truly moving towards the concept of a group of companies. Today, our step-down subsidiary, Sangreen Future Renewables Private Limited, accounts for nearly 20% of the bottom line. In this quarter, your company has achieved go-to-market in Saudi Arabia, and we have bagged our first order in a wholly owned subsidiary, Sanghvi Movers Middle East. So truly, your company within its -- is transforming itself from a pure-play crane rental company to a group of companies operating businesses in new verticals and new geographies. As we look towards the future, we believe that there will be tremendous shareholder value unlocking as we build each of these business units to their full potential. The Indian growth story is one that still continues to drive a very strong and positive outlook for cranes. With every single sector of the economy firing on all cylinders, we see the demand from cranes coming across all sectors, as Gaurang has mentioned. Today, we are focused on creating a group vision, which puts customer centricity, a people-first and a performance-based culture at the forefront. We believe that the opportunities available to us, combined with a judicious and prudent capital allocation, our core competencies in the lifting industry, our foray into the renewable sector will take your company to the next level. As the next quarters pan out, I can only look to the future with excitement to say that this company will grow from strength to strength. Thank you once again, everyone, for joining this call. And I now hand over the floor to the moderator to take the first question.

[Operator Instructions] The first question comes from the line of Deepan Sankara Narayanan from TrustLine Holdings Private Limited.

Congratulations for delivering strong improvement in crane business order book. So, how do we see the outlook for cranes order book improving from here on? And what kind of wind energy industry installations are we expecting over the current year and next year?

So we are -- I think Rishi also mentioned, we have built a robust structure following around cranes, and we see a lot of traction. We have a substantial inquiry both in terms of wind as well as non-wind. I will not be able to share the exact numbers to you, but we are confident of sustaining the growth story.

In addition to that, we have a historical order booking and we are seeing demand coming from all sectors. So our order book position today, as we mentioned, is approximately INR 750 crores. I always tell my investors, you can track the order book that was there in the first quarter and then understand where we will end the year at. So, having a historical order book really gives a very positive outlook for the future.

Okay. Okay. And also, can you provide revenues and margin guidance for all divisions for current year?

Sorry, we don't give forward-looking guidance.

Okay.

You had another question on capacity addition. So last year, the renewable -- last year, the renewable wind energy added 4.2 gigawatts of new capacity addition. This year, we believe the country will add anywhere in and around 5 gigawatts.

The next question comes from the line of Digant from SVIP Capital.

Just had a couple of questions about the -- on the consolidated financial results for the quarter. The employee expenses have gone up from INR 10 crores in June last year to INR 30 crores the previous quarter and INR 18 crores now. So, are we going to see a rise in this, or it will be the same level? Or is it a one-off or something? And the second question that I had was regarding our project EPC business and the wind EPC business where the margins have been quite volatile. So, I just wanted to understand what kind of margins should we expect going ahead?

Yes. So, your company is in a growth phase, and we are building multiple business units across Saudi Arabia as well as the renewable business in Sangreen Future Renewables Private Limited. So, we are investing in our people, developing a people-first culture and we are hiring talent that will help us fuel these growth engines in Saudi Arabia, as well as in Sangreen Future Renewables as well as our core business in India. As I'm really proud and glad to say, we have 2 of our C-suite members, Mr. Pradeep Mehta as our CFO; and Mr. Gaurang Desai as our CEO. They have joined the team and so has many, many other strong leaders within the organization. And to add to that also, the annual increments would have been reflected in the employee expenses for this year. So, that is on the -- on your question regarding employee expenses. The wind EPC business, which is the renewable business as well as the project EPC in hydrocarbon, these are -- as we have consistently communicated to the investor community, are in their nascent stages. We are constantly evolving the business model in Sangreen Future Renewables Private Limited. And in the next few quarters, we will be in a position to announce how we will be adding further services within the renewable business, specifically for the wind industry. So as we scale these businesses, as we look at the business model, there will be fluctuations in revenue. The other point that must be clarified, in the crane business, the revenue recognition is very simple. You bill the client and you earn your revenue. However, in the EPC business, we use the POCM methodology, which is a percentage of completion method. So, revenue recognition will be skewed based on the level of project delivery as per the Ind AS accounting standards. And as we scale up these businesses, as we achieve a certain size and scale, we will see the lumpiness in the revenue recognition also smoothen out. But these are the various factors that we can talk about with respect to both the revenue as well as the margins in both of the renewables business as well as the project EPC business.

Sure, sir. Just wanted to understand, you mentioned that we are investing in people to grow our business. So, just wanted to understand by when can we see these numbers reflecting in the revenue of the investments that we're doing?

We are already seeing the revenue numbers -- these incremental costs reflecting in the revenue because, for example, we have hit a historical Q1 revenue number, which your company has not never achieved till date.

Because I think last quarter was INR 267 crores and now it's INR 273 crores, while the employee expenses have gone up by about 30%, 40% more.

We are comparing Q4 to Q1. So we must compare a Q1 -- quarter 1 to quarter 1 basis.

The next question comes from the line of Sunil Jain from Nirmal Bang Securities.

Congratulations on good numbers and making the business more stable and sustainable. Sir, my question relates to Saudi. You are doing aggressive investment over there. So, are these investment backed by confirmed order as the history -- you always do that way? So are they the same thing?

The business in the Saudi Arabia -- so first, I want to talk about why we looked at Saudi Arabia as our new growth market. There is more than $500 billion of construction projects that have been announced in Saudi Arabia, starting with the PIF projects, the fact that the country has won the FIFA World Cup, the fact that the World Expo is there, the fact that the Asian Games are also being held in Saudi Arabia and the fact that there is a Vision 2030, which was announced in 2017, which is now panning out. Saudi Arabia has become the world's construction backyard. Now on top of this, if you add to that what Aramco is going to do, which is spend another $200 billion to $300 billion in the next 5 years. The scope of activities in Saudi Arabia, the size of the market, the acute shortage of crane services in the country to support this growth creates a very lucrative business opportunity for us to bring our expertise to. So, we are the fifth largest crane rental company in the world with -- and we have a lot of IP, lot of technology, lot of processes, lot of best practices that allow us to operate and ensure that we are able to secure and scale up a sizable business in Saudi Arabia. We have a plan -- a CapEx plan in Saudi Arabia, which will aid us to achieve our go-to-market. And currently, there is a business plan, which we are not communicating to our investors. But as of today, whatever assets are on the ground have been directly deployed from port to site. And as we move forward, we will continue to try and implement the same practices whereby whatever CapEx is being put to use in Saudi, they will move directly from port to site.

Yes. Sir, can you talk about the yield also over there, whether they are better than India and also the margins which you make in India, are they better from here?

The yield profile is similar. The margin -- sorry, the yield is better in Saudi Arabia as compared to India. However, the cost of operations is higher. And therefore, because there are several regulations, several Saudi ASEAN requirements as well as a higher cost of operating. So the margin will be slightly lower. However, the yields are higher.

Will it be substantial or marginal?

We are in the go-to-market phase. So it is too early to comment.

And sir, second question relates to wind and non-wind. So, can someone tell me the contribution of revenue from wind and non-wind are similar? Or is there any change in crane hiring business specifically, not the EPC.?

No, the revenue mix is similar to the previous quarters.

The next question comes from the line of Akshay Satija from Alpha Invesco.

Congratulations on great set of numbers. Sir, first question I wanted to ask was we have recently seen CFO and our Company Secretary resigning. With company going to do so well in upcoming futures with such significant plans, could you help us understand what was the reason behind the resignation?

So, Mr. Sham Kajale has been a dear supporter of the family and has operated for 30 years. However, we are very proud and happy to say that Mr. Pradeep Mehta, who is a qualified Chartered Accountant and brings more than 30 years of experience to the table, has joined us. So as we look to our future plans across Saudi Arabia in the renewables and in our core business, we feel that we are now currently optimizing our team to better serve the needs of your company. The same situation with our Company Secretary. He has resigned due to personal reasons, and we have a very good talent in Mr. Vinav Agarwal. So as far as the compliance, corporate governance and these functions are concerned, we only believe that going forward, these positions will only strengthen and add to the requirements of the company's growth vision and future business plan.

Okay. Okay. And sir, earlier you mentioned revenue mix is pretty similar to last quarter. Could you quantify, like we used to do earlier in our presentation that what was the contribution of wind and all the other sectors, oil and gas and cement, steel?

So going forward, we will not be giving sectorial split of revenue because it is the management's call now to -- that this has now become an issue with respect to our customers, competition and all other players. However, we can currently say that 50% of our revenue comes from wind and 50% of it comes from the remaining sectors.

The next question comes from the line of [ Mohammed Farooq ] from Pearl Capital.

Congratulations for the good set of numbers. The company has recorded 80% year-on-year increase in top line revenues in Q1. With contribution from Saudi operation expected in Q2 onwards, would it be reasonable to expect a full-year revenue growth in similar numbers or more?

Thank you for appreciating the efforts of the management in delivering good Q1 numbers. For the order book, as we have mentioned, our order book right now is INR 767 crores, and that will form the basis of how we can look at the outlook for the next 3 quarters. So of INR 767 crores, we have a revenue of approximately INR 273 crores in the first quarter. So again, I would request you to look at these numbers and extrapolate what would be the entire year's revenue. As a management practice, we do not give forward guidance.

Okay, sir. And the crane rental segment has historically been strong, but has recently faced headwinds and increased -- due to increase in competition. With the wind EPC and project EPC now contributing meaningful to the crane rental revenue and Saudi expansion again, so can we expect more crane rental revenues compared to last year because before you had a lot of headwinds, competition?

Yes, we can expect further revenue. That is why your company is investing approximately INR 321 crores in the core crane rental business in India. So, all of this CapEx will add to incremental revenue.

Okay. So last question. In the previous quarters, investor presentation contained more detailed operational and financial information, which was very valuable to shareholders. Considering the company's expansion across subsidiaries and geographies, would the management consider restoring the level of detail in future presentation to provide greater visibility into performance?

We'll take it under advisement from our Board of Directors.

The next question comes from the line of Bhagwat N from Prosperity Wealth Management Private Limited.

Congratulation on the strong quarterly performance. My question is on the current order book, which seems relatively modest in the context of execution over the remaining 3 quarters. Could you help us understand how this aligns with the full-year revenue growth guidance of 25% to 30% that has been provided during the last quarter con call? Are there any significant order inflows we are expecting to support this outlook?

Sorry. Moderator, the participant is not audible at all. Can you put him back in the queue?

Okay, sir. Sir, you may come back in the queue.

Congratulations on the strong quarterly performance. My question is on the current order book, which seems relatively modest in the context of execution over the remaining 3 quarters. Could you help us understand how this aligns with the full-year revenue growth guidance of 25% to 30% provided during the last quarter con call? Are there any significant order inflows that you are expecting to support this outlook?

So the order book is as of 29 July, 2025. Please bear in mind, we are in the first quarter of the financial year and we have already registered an order book of INR 767 crores. We definitely expect to book further orders through the course of the year. And we believe that, again, I would ask you to look at the order book closing position in the first quarter with respect to the overall revenue in last year and do a similar comparison for this year.

The next question come from the line of [ Dhruv Achrekar ] from [ Tiger Assets ].

Congratulations to the management for a good set of numbers. Sir, my question is regarding the average blended yield. So, I can see that it's at 2.11% of average blended yield. And as you answered to the previous participant question that the yield is better in Saudi Arabia than India. So, my question is that what was the yield in Saudi Arabia and in India? And how do you calculate the yield on specific cranes?

Sorry, what is your first question?

Sir, my question was how do you calculate the yield on the cranes? And my second question was that what is the yield in Saudi Arabia and as well as in India?

Yield is nothing but a function of your monthly rental rate divided by your historical cost of purchase. Today, we are saying that our yield is better in Saudi Arabia than India. So if India is at 2.11%, our yield in Saudi Arabia is better than India.

Okay. And sir, my next question...

Please bear in mind that our cost of operations is higher in Saudi Arabia. Therefore, our margins will be lower.

The next question comes from the line of Jay Bharat Trivedi from InCred AMC.

Congratulations to the team on great set of numbers. Sir, first question, I want to understand what would be the cash flow from operations in Q1?

Sorry, you're not audible. Can you please repeat your question?

Sir, what would be the cash flow from operations in Q1?

The total cash accruals -- the total cash accruals for Q1 was INR 81.63 crores.

Okay. And sir, for the incremental INR 357 crores of CapEx that we would want to do, how do we intend to fund it via debt or through internal accruals only?