Dharan Infra-EPC Ltd Q1 FY19 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
N/A
Order
N/A
Capex
Yes
1 of 3 growth signals are positive — mixed outlook.
Full analysisRevenue guidance
Category 3- Karda Constructions anticipates a minimum real estate market growth of 10-15% per annum in Nasik.
- The company expects sales momentum to continue, already having booked 75 units in Q1 FY19.
- Upcoming festive seasons like Ganesh Chaturthi, Diwali, and Navaratri are expected to drive further sales growth.
- Expansion plans focus on areas connected to Nasik, such as Igatpuri, Manmad, Aurangabad, Dhule, Mumbai, and Pune.
- Approximately Rs. 625 crore worth of construction area is under progress with Rs. 300 crore sales yet to be booked.
- About 60% of units under construction are completed; projects expected to be finished within 2 to 2.5 years.
- Introduction of RERA is enhancing customer confidence, aiding additional bookings.
- New projects will follow Ind AS 115 accounting, with minor revenue reversals (~Rs. 15-20 crore) expected in FY19 from completed WIP projects.
See what Dharan Infra-EPC Ltd management said on margin guidance — free account, 30 seconds.
Fundraise plans
See what Dharan Infra-EPC Ltd management said on order book — free account, 30 seconds.
Capex plans
Yes- Karda Constructions Limited is planning near-future expansion focused close to Nasik.
- Expansion areas include connected regions such as Igatpuri, Manmad, and vicinity towards Aurangabad, Dhule, Mumbai, and Pune.
- No specific mention of exact capital expenditure or strategic investment amounts, but the focus is on geographical growth around Nasik.
- The company is continuing with ongoing projects, with Rs. 625 crore construction area under progress and Rs. 300 crore sales yet to be booked.
- No direct mention of future large-scale capital expenditure or new strategic investments beyond expansion plans and ongoing projects in the transcript.
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Margin guidance
Category 3- Karda Constructions expects growth in the Nashik real estate market at a minimum of 10-15% per annum.
- The company plans to expand primarily in and around Nashik, including areas like Igatpuri, Manmad, Aurangabad, Dhule, Mumbai, and Pune.
- EBITDA margins are expected to remain around 30-32%.
- Revenue is poised to increase with upcoming festive seasons (Ganesh Chaturthi, Diwali, Navaratri) driving sales momentum.
- Implementation of RERA is positive, boosting customer confidence and leading to additional bookings.
- The company has recognized revenue reversals (~₹15-20 crore) in FY2019 due to completion certificate timelines but will comply with Ind AS 115 for ongoing projects, potentially stabilizing future revenue recognition.
- Continued focus on marketing and sales efforts is expected to support earnings growth going forward.
Order book
- Rs. 625 crore construction area is currently under construction.
- Total sales yet to be booked from these projects amount to Rs. 300 crore.
- Approximately 60% units are completed.
- Completion timeline for ongoing projects is around 2 to 2.5 years.
- Majority of projects have received completion certificates.
- Only 1-2 projects remain under construction Work In Progress (WIP) as of 31st March 2018.
- Around Rs. 15-20 crore of revenue from under-construction projects is expected to be reversed in financial year 2019 due to Ind AS 115 compliance on project revenue recognition.
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