Chavda Infra LtdQ1 FY25Construction

Chavda Infra Ltd

Q1 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

Yes

Order

Yes

Capex

Yes

3 of 5 growth signals are positive.

Revenue guidance

Category 3

→Chavda Infra targets revenue growth beyond ₹300 crores in FY26, aiming for ₹300-350 crores overall.
→The company expects to add at least ₹300 crores of new orders in FY26, with a bid pipeline of ₹600 crores and a conversion rate of 40-50%.
→Execution cycle for these projects is estimated to be 2.5 to 3 years.
→The order book as of now stands at ₹953 crores, providing a strong base for future revenue.
→Expansion into other Tier I cities like Mumbai is planned once current projects stabilize, leveraging existing client relationships without compromising margins.
→Industrial projects as a new segment are planned within 4-6 months, signaling diversification and additional growth avenues.
→The company anticipates improved working capital and cash flow post a targeted ₹100 crore equity fundraise, which will enable aggressive project execution and growth.

Category 3

→Chavda Infra targets consolidated revenue between ₹300 to ₹350 crores for FY26, indicating substantial top-line growth.
→EBITDA margins are expected to remain stable around 20-21%, supporting steady operating profitability.
→PAT margins held steady at 8% in FY25, with a 12% YoY PAT growth; management expects continued PAT growth aligned with revenue expansion.
→With the planned ₹100 crore equity raise, the company aims to improve working capital cycles and reduce interest costs, which should positively impact profitability and cash flows.
→Expansion plans include increasing capacity and technology investments to support skyscraper projects, indicating long-term margin preservation.
→Order book stands at ₹953 crores with a 40-50% conversion rate for new bids, targeting at least ₹300 crores order inflow in FY26 for sustained growth.
→Execution timelines span 2.5 to 3 years, suggesting stable revenue recognition over coming years.
→Management committed to delivering growth rather than just stating targets, emphasizing execution discipline.

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Yes

→Chavda Infra is planning a new fundraising of approximately ₹100 crores through equity or equity-linked instruments.
→The capital raise aims to strengthen the financial position, support expansion plans, meet working capital needs, and invest in equipment.
→Fundraising is expected to be a single tranche within 2 to 3 months; multiple rounds are not planned.
→Promoters' participation in the fundraising is still being structured and not finalized.
→Management confirmed no plans to raise additional debt; current debt stands at about ₹160 crores with an interest rate around 9%.
→The goal of equity fundraising is to reduce debt, improve cash flow, and regularize the working capital cycle.
→Debt is expected to decrease post-fundraising, improving profitability by lowering interest costs.

Yes

→As of May 30, 2025, the outstanding unexecuted order book was ₹703 crores.
→The order book composition: 41% residential, 51% commercial, and 8% institutional sectors.
→Two new key projects awarded as the company entered FY26:
→ - Arvind Aqua City residential infrastructure worth ₹150 crores.
→ - Nirma Limited’s corporate house worth ₹73 crores.
→Total outstanding unexecuted order book as on May 30, 2025, increased to ₹953 crores.
→Existing order book execution cycle is typically between 2 to 3 years.
→The company expects at least ₹300 crores of new orders in FY26 from a bid pipeline of ₹600 crores, with a conversion ratio of 40-50%.

Yes

→Chavda Infra is in an expansion mode and plans to invest aggressively in the business.
→The company intends to buy certain equipment and machinery as part of this expansion.
→Net block stood at ₹74 crores as of March 31, 2025, indicating prior capital expenditure.
→The upcoming fundraising of up to ₹100 crores will partly be used to meet increased working capital requirements and invest in additional equipment.
→The company is investing in technology to support construction of taller buildings (up to 200 meters) focusing on skyscraper technology.
→There is a plan to diversify into the industrial segment within the next 4 to 6 months.
→No new debt is planned; capital will be raised primarily through equity or equity-linked instruments to fund capex and smooth working capital.
→The focus on technology and equipment aims at sustained growth over the coming 10 years.

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