Atlantaa Ltd Q2 FY18 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
No
Order
N/A
Capex
Yes
1 of 4 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- Atlanta Limited is gearing up to bid around Rs. 130 billion worth of EPC projects, focusing on adding Rs. 10 billion of EPC work before the fiscal year ends.
- Prequalified to bid for projects worth over Rs. 14 billion independently; bidding typically ranges between Rs. 500 crore to Rs. 1,500 crore.
- Expected to realize balance arbitration awards of Rs. 11 billion within the next two fiscal years, improving revenue and cash flow.
- Real estate development includes Phase-II of Atlanta Enclave near Thane with ~800 units for sale, expected completion by December 2020.
- Additional real estate projects include over 200 units in Jodhpur (under progress, sales realization expected by FY2020) and affordable housing projects in Kandivali.
- Over 85%-90% of revenue expected to continue from road projects, with real estate providing supplementary income.
- Debt-free status targeted by June 2018 to enable funding for one more hybrid annuity project without raising capital.
See what Atlantaa Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
No- Atlanta Limited is currently adequately funded to take on one more hybrid annuity project without raising additional capital.
- The company has roughly Rs. 300 crores of surplus cash after paying taxes and retiring debts.
- For projects valued up to Rs. 10 to 15 billion, no fundraising is expected.
- Beyond Rs. 10 to 15 billion in project size, the company may consider raising equity capital.
- The standalone entity is expected to become debt free by June 2018.
- Subsidiaries are also likely to become debt free during the next financial year.
- There is no immediate need to raise funds post the receipt of arbitration awards and receivables.
- Future funding needs will depend on project sizes and bidding opportunities.
See what Atlantaa Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- Atlanta Limited is currently adequately funded for taking on one more hybrid annuity project with roughly Rs. 300 crores of surplus cash after paying taxes and retiring debts.
- No immediate capital raising is needed for projects up to Rs. 10-15 billion; beyond that, they may consider raising equity.
- The company focuses on bidding EPC projects in the Rs. 500 crores to Rs. 1,500 crores range and is actively gearing up to bid Rs. 130 billion worth of EPC projects.
- Real estate development continues with Phase-II of Atlanta Enclave (cost ~Rs. 3.5 billion) expected to complete by 2020, a new project in Jodhpur (200+ units under progress), and an affordable housing project in Kandivali with 1.5 lakh sq ft developable FSI.
- Post receivables realization and debt retirement, the company plans to deploy surplus funds towards growth investments, particularly in hybrid annuity projects.
- The group plans to continue strategic real estate development on land parcels near highway projects.
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What Atlantaa Ltd's management said in earlier quarters
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