Conference Call with Capacit'e Infraprojects Management and Analysts on Q4FY20 and Full Year Earnings Performance and Outlook. Listen to the full earnings transcript.
Key Highlights from Management
The company lost more than 10 crucial days of operations in March 2020 owing to the COVID-19 pandemic and the resultant lockdown announced by the government. While cashflows got deferred due to the lockdown, we do not foresee any risk in recoverability of our debtors. Collections during Q4FY20 were Rs 309 crores.
Due to lockdown in April & May, partial relaxation in June and labour migration issues faced by the industry, execution is resumed but not in a meaningful way. Received approvals to resume work at all sites. The Company has sufficient liquidity to execute projects. Revenue for FY20 was Rs 1,554 crores (Rs 1,824 crores in FY19). EBITDA for FY20 was Rs 282 crores (Rs 285 crores in FY19). PAT for FY20 was Rs 91 crores (Rs 96 crores in FY19). Revenue for Q4FY20 was Rs 313 crores (Rs 507 crores in Q4FY19). EBITDA for Q4FY20 was Rs 53 crores (Rs 77 crores in Q4FY19). PAT for Q4FY20 was Rs 4 crores (Rs 26 crores in Q4FY19).
Imposition of lockdown caused a delay in starting of our prestigious and large public sector order from CIDCO which was scheduled to start by end of March 2020. Company received two orders worth ~ Rs 757 crores in the initial months of Q4FY20. ~54% (~ Rs 5,713 crores) of the total order book comprises of public sector orders. Order Book to Sales ratio of 6.7x gives a healthy revenue visibility for the forthcoming years.
Currently the industry is facing workmen shortage due to migration of labour. However, workmen have started to return from their natives since the beginning of June and we believe that the situation should improve substantially by end of July 2020. To attract and retain migrant labour, company is devising plans to incentivize them, by way of monetary and other benefits.
Strong Public sector order book (~54%) from marquee clients to gather pace on the back of government focus to push infra projects. Private sector order book (~46%) from financially strong Tier 1 clients is also expected to pick up as developers would focus on speeding up of execution.
Our marquee clientele comprising of elite names from the public & private sector provides us comfort on the cashflow visibility as execution picks up.
In the recent stimulus announcements, government evinced interest in pushing infrastructure projects. This shall lead to higher tendering activity for public sector projects along with focus on timely execution of existing projects.
Consolidation in the private sector will further intensify as stronger players will become more stronger by gaining market share. Organized players are expected to witness higher demand as customers will focus on the need for delivery and quality.
Since the lockdown, RBI has cut the repo rate by 115 bps, which would lead banks to lower interest rates on home loans. This coupled with softened land prices likely to improve affordability for the buyers in the short to medium term which can be very crucial in driving property sales.
Order book with higher share of Public sector is at ~54%. Top 10 Client Groups constitute ~78% of the Total Order Book.