Gayatri Projects LtdQ2 FY19Construction

Gayatri Projects Ltd

Q2 FY19 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

N/A

Capex

Yes

1 of 3 growth signals are positive — mixed outlook.

Revenue guidance

Category 2

→Gayatri Projects expects over 25% revenue growth for FY20, reaffirming their guidance based on strong order book and execution.
→The company has a healthy EPC-only order book of over INR 150 billion with 90% already generating revenues.
→Order inflows were subdued in Q1 due to general election related slowdowns, but are expected to pick up from H2 FY20.
→They maintain an order inflow guidance of INR 60-65 billion for FY20.
→Roads segment will contribute 50-60% of new orders, with the balance from irrigation and mining.
→Larger road projects like Purvanchal Expressway and Mumbai-Nagpur Expressway are progressing well, supporting revenue growth.
→EBITDA margin guidance remained strong at around 16% for FY20, indicating operational efficiency alongside growth.
→Monetization of arbitration claims and power assets is expected to reduce debt, supporting financial health for growth.

Category 3

→Gayatri Projects Limited expects strong future growth with a reaffirmed FY20 guidance of:
→ - 25%+ revenue growth
→ - 30%+ PAT (profit after tax) growth
→EBITDA margins are expected at 16% for FY20, with confidence in catching up on weaker first quarter irrigation project execution in Telangana, Karnataka, and Andhra Pradesh.
→Over 90% of their large EPC order book (~INR 150 billion) is generating revenues, providing good earnings visibility over the next three years.
→Order inflow guidance for FY20 is maintained at INR 60-65 billion, with a pipeline largely driven by roads (50-60%) and irrigation and mining projects.
→The company anticipates margin improvements and continued execution momentum in major projects like Purvanchal Expressway and Mumbai-Nagpur Expressway.
→Tax rate normalizing to around 22% in FY20 and FY21, with full tax rate expected by FY22.

Get access to all 5 sections — revenue, margin, fundraise, orderbook, and capex — for Gayatri Projects Ltd and 1,400+ other companies.

→No explicit mention of new fundraising through debt or equity in the transcript.
→Focus is on deleveraging the balance sheet by monetizing arbitration claims and power assets.
→Current efforts are on reducing non-core debt through asset monetization rather than raising fresh debt.
→Improvement in credit rating from BB- to BB+ targeted, with hopes to reach BBB in next 6 months by reducing debt-equity below 1x.
→Borrowing cost expected to reduce modestly (from 13-14% to around 11-12%) after rating improvement.
→No direct references to equity fundraising or new debt issuance plans in the call.
→Emphasis remains on balance sheet strengthening via asset sales and arbitration recoveries, not on fresh capital raising.

→Gayatri Projects has built a strong EPC-only order book of over INR 150 billion (INR 15,000 crores) over the last four years (Page 2).
→Over 90% of this order book had started generating revenues by Q2 FY20, providing good earnings visibility for the next three years (Page 2).
→The company maintains a high book-to-bill ratio of over 4.2 times (Page 2).
→Bidding pipeline includes about INR 1,000 crores worth of NHAI projects starting to trickle in, with major bidding activity expected after October (Page 6).
→Target order inflows guidance for FY20 is INR 60-65 billion (INR 6,000-6,500 crores) (Page 3).
→Focus on roads (~50-60% of orders) and remaining from irrigation and mining segments (Page 6).
→Projects in pipeline also include UPEIDA projects like Gorakhpur link (Page 6).

Yes

→Q1 FY20 Capex incurred: INR 21 crores
→Additional Capex planned for FY20: INR 40-50 crores
→Total FY20 Capex guidance: Approximately INR 60-65 crores
→Focus remains on current orders with capex aligned to project execution needs
→Strategic focus on road projects (50-60% of order book) and irrigation/mining projects (balance)
→No specific mention of new large-scale strategic investments beyond ongoing asset monetization efforts
→Monetization efforts underway for arbitration claims and power assets to reduce debt and strengthen balance sheet
→No fixed timeline disclosed for power asset stake sale; expected within current financial year
→Key projects progressing on schedule, with some aiming for early completion bonuses (e.g., Purvanchal Expressway)

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