Gayatri Projects LtdQ4 FY21Construction

Gayatri Projects Ltd

Q4 FY21 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

Yes

Order

N/A

Capex

1 of 4 growth signals are positive — mixed outlook.

Revenue guidance

Category 2

→FY21 revenue guidance is around INR 4000 crores (Page 3).
→The company targets an order inflow of INR 4000 to 5000 crores in FY21 to support 20-30% top-line growth (Page 12).
→Bids worth INR 4000-5000 crores already submitted for road projects; another INR 4000-5000 crores expected before March (Page 12).
→Order book stands at INR 14,000 crores, with a book-to-bill ratio of 3.8, providing revenue visibility over next 2-3 years (Page 3).
→Execution has improved post-monsoon with projects like Lucknow Purvanchal Expressway and Nagpur-Mumbai progressing well (Page 4).
→Irrigation projects in Telangana and Andhra Pradesh have started gaining momentum after prior delays due to fund crunch (Page 4).

Category 3

→For FY21, Gayatri Projects Ltd is targeting revenues of around INR 4000 crores.
→The company has an EPC order book of INR 14,000 crores, providing 2-3 years of revenue visibility.
→Revenue growth for the nine-month period was 9%, but EBITDA growth was limited to around 2%, mainly due to provisioning for credit losses.
→PAT was impacted by exceptional loss on investment diminution in Sembcorp stake.
→Execution is expected to improve from Q4 FY20 onwards, especially in irrigation projects in Telangana and Andhra Pradesh, which were previously stalled.
→The company expects to monetize arbitration awards and claims worth INR 1900 crores, which will reduce long-term debt and improve financial health.
→Economic interest from power stake sale in Sembcorp could provide upside in the future monetization events.
→Overall, the company is focused on deleveraging and improving cash flows to support future growth.

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Yes

→No explicit mention of any current or immediate new fundraising through debt or equity during the call.
→The company has focused on deleveraging by repaying long-term debt using proceeds from stake sale and arbitration award monetization.
→FY21 guidance indicates no significant CapEx planned, implying limited need for fresh funding unless new projects are won.
→They are actively working on monetizing arbitration awards and claims to reduce long-term debt to zero rather than raising fresh debt.
→Promoter pledged shares largely support current company loans, with no mention of new debt from promoters.
→Order book additions are expected to be around ₹4,000-5,000 crore in FY21, financed through existing limits and cash flow.
→Bank guarantees utilization is already high (~90% of non-fund based limits), which may restrict fresh non-fund based borrowings in the near term.

→As of the 3QFY20 earnings call, Gayatri Projects' EPC order book stands at INR 141 billion (INR 14,100 crores), translating into a book-to-bill ratio of 3.8.
→For FY20, the company aimed to add inflows of approximately INR 2,000 crores in orders.
→For FY21, the target order inflow is between INR 4,000 to 5,000 crores, consistent with historical trends.
→The company has submitted tenders worth INR 4,000 to 5,000 crores as of February 2020 and expects to submit an additional INR 4,000 to 5,000 crores before March 2020.
→The company’s strategy is to bid for orders that enable a top-line growth of 20-30%.

→CapEx incurred in 9 months FY20: approximately ₹59 crores.
→Guidance for FY21 CapEx: minimal at present since no new projects have been won yet.
→Future CapEx plans depend on winning new projects; once new projects are secured, additional CapEx will be considered.
→Currently, as of the call, no new significant CapEx or strategic investments have been planned or incurred for FY21.

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