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Atlantaa LtdQ4 FY19

Atlantaa Ltd Q4 FY19 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: 39.6Market Cap: ₹333 CrSector: Construction

Management growth scorecard

Revenue

Category 1

Margin

N/A

Fundraise

N/A

Order

Yes

Capex

Yes

3 of 3 growth signals are positive.

Full analysis

Revenue guidance

Category 1
  • Atlanta Limited is targeting a 50% year-on-year growth for the next 5 years (Page 5).
  • The company is working to expand its order book to about Rs. 2000 Crores by the next fiscal year (Page 4).
  • Focus remains on bidding for EPC and hybrid annuity projects, aiming to add Rs. 5 to Rs. 10 billion value in EPC work every fiscal (Page 3).
  • Concentration is on road and highway projects in states like Assam, Gujarat, Maharashtra, UP, and Bihar, with plans for significant presence in upcoming projects including Bharatmala (Pages 4 and 5).
  • Real estate projects are ongoing with phased developments expected to complete by 2020-2021, contributing to future growth (Page 3).

Margin guidance

  • Atlanta Limited targets a **50% year-on-year growth for the next 5 years** as stated by Managing Director Rikiin Bbarot.
  • The company is focused on expanding its EPC order book from Rs. 344.6 million currently to about Rs. 2000 Crores by the next fiscal year.
  • The strategy includes bidding aggressively on EPC and HAM projects, particularly in Gujarat, Maharashtra, Assam, UP, and Bihar.
  • Debt-reduction plans aim to make Atlanta debt-free on a standalone basis by June or September of the next financial year, improving financial leverage and profitability.
  • With completion and monetization of real estate projects and arbitration claims recovery, the company expects better profit margins going forward.
  • Current EPC margin pressures due to execution mix may ease as the order book grows and more arbitration-related high-margin revenues come in.

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Fundraise plans

  • No explicit mention of new fundraising through debt or equity in the provided transcript.
  • The company is aggressively pursuing receivables to reduce existing debt and generate growth capital.
  • On standalone basis, Atlanta Limited plans to become debt-free by June or September of the next financial year.
  • On a group basis, substantial debt reduction is targeted within the next couple of years.
  • The strategy involves focusing on EPC and HAM projects, and converting land bank into real estate opportunities for growth capital.
  • No direct statements indicating plans for fresh debt or equity raising at the time of this call.

Order book

Yes
  • As of December 31, 2017, Atlanta Limited's EPC order book stood at Rs. 3.446 billion (Rs. 3446 million).
  • The company is actively working to expand this order book.
  • The target is to grow the order book to about Rs. 20 billion (Rs. 2000 Crores) by the next fiscal year.
  • Currently, the entire EPC order book pertains to roads and highways; the company is not active in mining at this time.
  • Atlanta Limited is prequalified to bid for projects worth over Rs. 14 billion.
  • The company focuses on bidding for EPC and hybrid annuity-based projects.

Capex plans

Yes
  • Atlanta Limited is actively pursuing EPC and hybrid annuity based project bids, focusing on adding Rs. 5 to Rs. 10 billion worth of EPC work annually.
  • The company holds three ongoing real estate projects with a total cost of Rs. 5.9 billion, including Atlanta Enclave (Thane), Olympic Lifestyle (Jodhpur), and Atlanta Heights (Mumbai).
  • For future strategy, Atlanta follows a practice of purchasing land for setting up plants and camps during projects, later converting the land into real estate opportunities as economic activities grow.
  • The company has its own land bank in Thane and other locations acquired years ago when prices were low, and is exploring similar opportunities in Nagpur.
  • No explicit mention of new standalone capital expenditure or strategic investment beyond ongoing project developments and land acquisition strategy was detailed in the call.

How does Atlantaa Ltd rank vs peers in Construction?

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