Vishnu Prakash R Punglia Limited (VPRPL.NS) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to Vishnu Prakash R Punglia Limited Q1 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Ms. Nupur Jainkunia from Valorem Advisors. Thank you, and over to you, ma'am.

Thank you. Good afternoon, everyone, and a very warm welcome to you all. My name is Nupur Jainkunia from Valorem Advisors. We represent the Investor Relations of Vishnu Prakash R Punglia Limited or VPRPL. On behalf of the company, I would like to thank you all for participating in the company's earnings call for the first quarter of the financial year 2026. Before we begin, let me mention a short cautionary statement. Some of the statements made in today's earnings call may be forward-looking in nature. Such forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ from those anticipated. Such statements are based on management's belief as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any undue reliance on these forward-looking statements and making any investment decisions. The purpose of today's earnings call is purely to educate and bring awareness about the company's fundamental business and financial quarter under review. Now let me introduce to the management participating with us in today's earnings call and hand it over to them for their opening remarks. We have with us Mr. Manohar Lal Punglia, Managing Director; Mr. Jayant Pungalia, Project Coordinator; and Mr. Sarfaraz Ahmed, Chief Financial Officer. Without any further delay, I request Mr. Manohar Lal Punglia sir, to open with his opening remarks. Thank you, and over to you, sir.

[Foreign Language].

Thank you, sir. Good afternoon, everyone. The operating revenue for the quarter stoods at INR 276 crores, which is decreased by around 8% year-on-year basis. The EBITDA stood at around INR 32 crores which is around 5% year-on-year with EBITDA margin reported at 11.54%. Net profit for the quarter stoods around INR 7 crores, which has declined by 53% year-on-year basis. PAT margin for the quarter stood at 2.53%. From an execution perspective, billing during the quarter was supported by steady progress across ongoing projects, particularly in the water supply and railway segment, which together contributed to the majority of revenues. While overall profitability was impacted by higher finance costs and slower pace of receivable recovery and -- but disciplined control and efficient project execution helped to maintain our EBITDA margins within the industry average range. Now I will request Mr. Jayant Pungalia to provide operational highlights for the quarter under review.

Thank you, sir. [Technical Difficulty] In terms of the project execution, we achieved an on-time delivery rate exceeding 90% despite industry-wide challenges supported by efficient deployment of manpower, machinery and materials. Our footprint continues to expand across multiple states with targeted entry into high-growth regions, reinforcing our strategic intent to diversify geographically. On the business development side, our bidding pipeline currently stands at over INR 3,000 crores with tenders submitted across roads, bridges, urban infrastructure and renewable linked construction projects. Our internal focus remains on operational efficiency, backward integration and disciplined cost control. Investments in in-house manufacturing, test facilities and maintenance infrastructure are expected to further strengthen delivery capabilities and margin stability. Looking forward, with a healthy order book, a strategic bidding pipeline and sector tailwinds from the sustained infrastructure spending, we remain confident of sustaining growth, improving execution momentum and delivering long-term value to all stakeholders. With this, we can now open the floor for question-and-answer session.

[Operator Instructions] The first question is from the line of Aayush Saboo from Choice Institutional Equities.

Yes. Could you please highlight like what are the new geographies that we are targeting? And like [indiscernible] the Railway segment, what kind of order inflow can we expect going forward? Like what is the expansion strategy going forward for the next 2 years?

We'll maintain our historical order.

Sorry pardon, you will again maintain your historical?

We'll maintain our historical order book in the Railway segment.

Okay. Okay. And about any particular opportunities that we are seeing in the Railway sector that you could highlight on so we have more clarity regarding the growth?

So basically, sir, in Railway sector, they are the Phase 2 and Phase 3 segments from the Indian government are about to be quoted in the coming time. Based on that, we target those project basically in our Railway segment.

Okay. So like when would we expect like majority of the order inflow like a bulk of the order inflow to come from the Railway segment?

We can't comment on that. It depends on the Deputy Railway Department. It is a time-taking process. It takes around months time.

Okay. Yes, I understand. Also, our interest cost down has come down substantially compared to Q4 FY '25. So what would be the reason for the decline in interest costs? And what is the guidance that you would give for the full year regarding the interest cost, interest expenses?

Please repeat your question?

Our interest cost for Q1 FY '26 has come down, right, considerably compared to Q4 FY '25. So what is the reason for the decline in the interest cost? And what is the guidance would you give for the full FY '26?

It will decrease by the time and stand at normal level because in the last quarter and in the March quarter, our funds have been issued by the promoters also. And we have increased our debit limits and credit limits also. And by the time, it will stand at normal level.

Okay. Okay. And also for the money that we start in our water infra projects, water sanitation projects. So last quarter, you guided that you'll start the money which we receive the money by Q2, Q3. So any -- can you just update on that? Like what is the status regarding that?

Yes, we have received money from the water supply project, especially from MP and UP. Major amount has been released by the government. And in fact, Rajasthan government has also released handsome amount. And we are expecting in the end of September quarter, we will get the major amount from department.

The central government share is about to release soon. And as soon as that arrives, the entire liability is going to release in coming time.

Okay. That's great to know. I mean that's very encouraging. So by September, we would expect it. So I can say in that quarter, we expect to like [indiscernible].

We hope that.

The next question is from the line of Lokesh from SMIFS Institutional Equities.

A couple of questions from my side. So first one, basically, when you are saying that the inflows would be at the historical level. So it is safe to assume that inflows [Technical Difficulty].

Ladies and gentlemen, the management line has been dropped. Please stay connected.

So when you are -- a couple of questions from my side. So first one is basically on the inflows. When you're saying that it will be at the historical range. So what we should consider? It should cross around INR 2,200 crores, more than INR 2,000 crores. So what is the safe number to assume for FY '26?

Your voice is a bit low. Can you please repeat?

Sir, am I audible now?

Can you bit louder, please?

Am I audible now?

Yes, yes.

Yes. So sir, basically, first question is on the inflow front. So when you are saying that the inflows will be at the historical level, so in FY '25, we have got around INR 1,850 crores of order inflows. So is it safe to assume that it will be more than INR 2,000 crores for FY '26? And what is the traction we are seeing on the ground level on both railways and on the [indiscernible] ?

Historical success ratio is...Lokesh sir, our historical ratio is between 16% to 18% every year. The more we bid, the more we get the opportunity. But we are something diversified from segment to segment that apart from water supply, we are going for railway projects also and try to get the projects we are expecting we will maintain the same success ratio in the coming years also.

Success ratio is true, but in terms of numerical guidance for the order inflows because our success ratio is a percentage of order pipeline, correct, on what you bid. So what is the bidding pipeline? You said it is around INR 3,000 crores.

Yes, sir. Our current bidding pipeline is INR 3,000 crores, and we are -- the team is working on the same. When the railways projects were floated, we will bid more. This is the current pipeline. But we are bidding more or less INR 10,000 crores to INR 12,000 crores a year.

Okay. So do you think INR 10,000 crores to INR 12,000 crores of order pipeline or bidding would be there for this year as well so that our order...?

Government is focused on infra projects and Delhi, there are new announcements from the government side. And we are getting the projects also in the Railway segment, in the Water segment and in fact, in the Road segment also.

Okay. And secondly, sir, what is our receivable status as of now? It was closer to around INR 735 crores at FY '25 end. So what is the receivables stands at quarter end?

Current receivables are marginal decline from last -- what they were in March '25. Last March '25 was INR 735 crores. And currently, it is around INR 700 crores or INR 705 crores.

Okay. But you said that the payment has been eased from MP and from -- also from the Rajasthan and UP government. So how much money will we have got during the quarter?

Yes, we have got from MP around INR 150 crores from UP also. We have got around total INR 400-plus crores in the last quarter.

So basically, only part payment from the state share was released from these particular states. And this is like being continuous and the states are releasing funds on part, part basis. And we are expecting in a very short time, the center is about to release its bunch so that will clear our entire liability.

Okay. So when do you think that the payment will get smoothened by -- is it quarter 3 or it will take more time ahead?

We are anticipating that after quarter 3, the things get normalized and cycle will also be on normal levels because majorly like MP and UP government state funds has been released now and waiting for the central funds also, and they are going to be released soon.

Okay. But sir, when you are saying that you have received around INR 400-odd crores in quarter and the receivables but has not declined to that extent. So what's the mismatch over there? Why it is not?

Because we have not slowed down our work. We are regularly working on the same pace and we see the momentum of work on every site, right, sir? Therefore, we have got certified the work and receivables are at normal level. And it is the accumulation of last 21, 22 months. It's not going to reduce in 1 month, 2 months or 1 quarter. We are expecting that it may take 6 to 8 months to get into the normal levels.

Okay. Okay. And sir, what is the reason for moderation in margins? It has declined to moderated to around 11%, 11.5% for the quarter. So what was the reason? And where do we see for the full year for FY '26?

Major reason is behind there are slow receivables, and we have continue our work from taking borrowings. We have increased some borrowings also. Therefore, there is extra interest cost burden.

But EBITDA would not be inclusive of the interest cost, it is...?

EBITDA levels are marginally declined, not the major difference.

Our historical level is closer to around...

Decline because of we have started new sites, employee costs have been increased somehow.

But do you think that it will normalize to our historical level of 13%, 13.5% or it will remain at around 11%?

We are expecting that things will get normalized.

So it is safe to assume to around 13%, 13.5%, correct?

Yes.

And for the growth, sir, for full year FY '26, where do you see it will -- because you are saying that the pressure though have released, but receivables is still there. So do you think that the pickup in the execution will be there? Or -- and what is the growth you are seeing for FY '26?

Sir, as I said that we have not stopped any work and the momentum is same. If the government release funds on time and as we are expecting in the next quarter or further in the fourth quarter, then we are expecting that our growth will be minimum 20% to 25%.

For the full year, you are saying?

Yes, sir.

20%, 25% growth on the top line and 13%, 13.5% on the EBITDA level. And sir, debt it was -- has increased in the recent times and has basically stood at around closer to around INR 700 crores at FY '25. Where does it stands right now?

Sir, I explained you. The debt was increased, but now we have promoters fund in the company. We have decreased our trade lines. Earlier, it was around INR 350 crores in the March. This is now around INR 300 crores. But promoters have infused funds in the company through unsecured loan. Therefore, it is showing at the same level.

So how much promoter's loan?

Promoter's loan is around INR 110 crores.

INR 110 crores. So just to clarify, you have around INR 700 crores of debt at FY '25 end. And at that time, is there a promoter's loan?

At the FY '25, there is a promoter loan of INR 59 crores.