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

Ladies and gentlemen, good day, and welcome to the Vishnu Prakash R Punglia Limited Q3 and 9 Months FY '25 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 third quarter and 9 months ended financial year 2025. 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 beliefs as well as assumptions made by and information currently available to management. Audiences are cautioned not to place any due reliance on these forward-looking statements in 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 you to the management participating with us in today's earnings call and hand it over to them for opening remarks. We have with us Mr. Manohar Lal Punglia, Managing Director; Mr. Jayant Punglia, Project Coordinator and Mr. Sarfaraz Ahmed, Chief Financial Officer of the company. Without any further delay, now I hand over the conference to Mr. Manohar Lal Punglia. Thank you, and over to you, sir.

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Thank you, sir. Good afternoon, everyone. Starting with the third quarter of financial year 2025. Our revenue from operations stood at INR 441 crores, which decreased by around 0.5% year-on-year basis. The EBITDA was reported at around INR 28 crores, which decreased by around 19% year-on-year with the EBITDA margin reported at 11.42%. The main reason, the company incurred substantial upfront expenditure on new projects, awarded on mobilizing the social procurement of materials and initial project execution. Since these projects are still in the early stage, the incurred cost impact the current quarter's margin. However, the revenue from these projects are expected to materialize in the upcoming quarters, which will result in significant margin improvement. Net profit for the quarter stood at around INR 4 crores, which has declined by 78% year-on-year basis. PAT margin for the quarter stood at 1.62%. Our main reason is delayed payments from the clients or department resulted in companies to secure external financial support from banks or financial institutions, leading to additional interest costs and affecting the profitability. Now coming to the financial highlights for the 9 months of the financial year 2025. Our revenue from operations is at INR 832 crores, marking a year-on-year increase at approximately 2%. EBITDA was around INR 110 crores, representing a year-on-year growth of around 5%. With EBITDA margin 13.19%, net profit for the 9 months was approximately INR 42 crores, reflecting a 23% decline year-on-year basis. The PAT margin stood at 5.09%. Now I will request Mr. Jayant Pungalia to provide the operational highlights for the quarter and the review.

Thank you, sir. Good afternoon, everyone. The company has successfully secured new orders for INR 1,333 crores during the current financial year, reflecting strong business growth and with that, the total order book stands at approximately INR 5,125 crores as on 31st December 2024. The company was granted registration under the RDSO vendor directory for the fabrication of steel bridge girders, which will enhance the company's backward integration, reduce dependency on external vendors and improve operational efficiencies. The company has a strong pipeline of new bidding opportunities, potential orders worth around INR 4,500 crores are expected to be finalized in the coming months, positioning the company for the continued growth. The company remains committed to business expansion by actively bidding for new projects to sustain our healthy and growing order book, ensuring long-term business stability. With this, we can now open the floor for question and answer session.

[Operator Instructions] The first question is from the line of [Subash B] from Value Investment.

Hello. Am I audible.

Yes, sir.

Okay. So the FY '24 revenue was INR 1,474 crores. And after the Q2 results came out in the investor call, the management guided that you would have about 10% to 15% of growth in FY '25. So when I calculate 10% to 15% on FY '24, the FY '25 estimated revenue was INR 1,695 crores or INR 1,650 crores. So in the Q2 call, when I asked whether this is achievable, the management was very confident and you guys said that this is definitely achievable, considering you had to do INR 500 crores revenue in Q3 and also another INR 500 crores in Q4. But in Q3, you have done INR 200-odd crores now, so I went to your presentation. The presentation clearly gives the reason why the EBITDA margin is down, it's because of the upfront charges that you have incurred for the new projects. But there is no reason given for the revenue decline. So could you explain the reason why the revenue is not recognized.

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Sir, how much payments are delayed? So if those payments were realized, what would have been the revenue, could you give us at least a ballpark number?

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So you're saying INR 800 crore and INR 692 crores is not realized. And if those were realized, then you would have had another INR 1,450 crores in this quarter. I mean I didn't understand the numbers. You said INR 800 and INR 690 crores, right? But this quarter number is only INR 200-odd crores.

This is 3 months figure.

But my next question, the second question is. So in the last quarter, your receivables, that is trade receivables was INR 852 crores, which I think all the analysts questioned you a lot about. And you said that most of those receivables will be collected in October, right? You said that it is already -- I mean, material part of it is already collected and that would reflect in the Q3. But now in the Q3, we don't see the balance sheet. So could you give us the net trade receivables amount as on Q3.

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So what is the amount of trade receivables as of today?

As of today, trade receivables is around INR 800 crores.

INR 800 crores, again, okay. And could you give us debt levels as on Q3? This is my last question.

Our debt level as on gross debt level is INR 608 crores, out of which working capital facilities are INR 200 crores, term loan is INR 100 crores and other facilities are INR 250 crores.

Okay. So it was INR 668 crores during Q2 and now it is INR 600-odd crores.

Yes, sir.

Okay. So if you could explain what is the reason for revenue decline, maybe after you answer other analyst questions, that would be helpful. And also my suggestion would be -- I mean, see, when you were doing the Q2 investor call, you were already -- we were already in Q3, right? So you would have had at least a slight light picture of how your Q3 would look like, but still you guided that Q3 would be very good, right? But the Q3 revenue is not at all good. I mean we expected INR 500 crores, and it is INR 200-odd crores. So my suggestion would be to not be too optimistic about the revenue and guide as per the realistic picture.

We're on the conservative side.

Official thing was even in the previous quarter, we were receiving like kind of part payments from different state governments. So looking to that, we anticipated that payments might regularize in the coming quarters. But then the things didn't go down as we thought. And looking to the previous budget, the center government officially announced -- the major segment, that is water supply. So now we are very much confident that in coming quarters, the backlog will be recovered.

Okay. I hope that trade receivables come down compared to Q2.

The next question is from the line of Chandan Mishra from [Indiscernible].

My question, sir, regarding tax incurred, sir. Historically, we have incurred 25-odd percent tax quarterly. But this quarter, we have incurred across 49.48% tax. What is the reason, sir?

Sorry, sir. Can you repeat the question please.

Sir, historically, we have incurred 25-odd percent odd tax percent quarterly. But this quarter, we have given 49.48% tax. What is the reason for this hike in tax?

Tax provision?

Tax percent, yes.

I think it is at the same level, sir.

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The next question is from the line of [Sahil Patani] from [Stockhos Capital].

My question is similar to one of the previous participants. We had a guidance of 15% on [indiscernible].

Sorry to interrupt Mr. Sahil. I would request you to please use your handset.

Sorry. Yes. My question is very similar to one of the participants that we had given a guidance of 10% to 15% year-on-year. So are we now going to revise the guidance? Or what is the management outlook on that?

Sir, it depends on the payment from the department. [Foreign Language] But as of now, on a conservative side [Foreign Language].

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Sorry to interrupt Mr. Sahil. Your line is not very clear.

Okay. [indiscernible].

No sir. I can hear background noise. Mr. Sahil? Due to no response from the current participant, we will move on to the next participant. The next question is from the line of Tej Patel from Niveshaay.

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[Foreign Language] Like officially declared. [Foreign Language]

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The next question is from the line of Harsh from Elegant Family Office.

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Exactly sir.

The next question is from the line of Dhananjay Mishra from Sunidhi Securities.

[Foreign Language] that is why the revenue decline [Foreign Language]

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[indiscernible]

Okay. Okay. [Foreign Language]

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Around 24 months to 36 months [Foreign Language]

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[indiscernible]

Ladies and gentlemen, we have lost the connection of the management. [Technical Difficulty] Ladies and gentlemen, we have the management connection back on call. Sir, please go ahead.

[Foreign Language] what kind of margin we are making.

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Around INR 2,000 crores [Foreign Language]

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The next question is from the line of Vidhi from IndusInd Bank.

[Foreign Language] around INR 800 crores debtors outstanding [Foreign Language] more than 180 days, more than 365 days [Foreign Language]

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Okay. But sir in terms of percentage recovery, [Foreign Language]

50% to 60% [Foreign Language]

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Yes, mam.

The next question is from the line of [Subash B] from Value Investments.

You said that due to the new work that you completed, there are -- I mean, the trade receivables again increased, right? So how much of that amount is increased in this particular quarter?

[Foreign Language]

Can you give me the quantified number?

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Okay. And also how do you recognize the revenue? So do you recognize the revenue only after you actually receive the payment? Or as soon as you complete the phase of the project, do you recognize the revenue even though the payment is not received, would you recognize it?

Yes, sir. [Foreign Language]

[indiscernible] Okay. So for this quarter, you made INR 240 crores revenue, right? So out of INR 240 crores, how much is received actually? And how much is receivable?

How much is receivable?

Yes.

Around 60% to 70% is receivable sir.

The 60% to 70% of...

Mr. Subash does that answer the question.

No, actually, so that comes up to INR 144 crores, right, out of INR 240 crores, you're saying INR 144 is receivable, but you did say that out of [INR 853 crores] of receivables from last quarter, you said material amount of that was actually received by, right? But I didn't get that number as well.

The INR 853 crores bifurcation, there is [indiscernible].

The next question is from the line of Prateek Bhandari from AART Ventures.

Can you hear me now?

Yes, sir.

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Yes, sir.

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Very same level INR 800 crores [Foreign Language]

INR 800 crores [Foreign Language] INR 50 crores [Foreign Language]

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