Lakshya Powertech LtdQ1 FY25Construction

Lakshya Powertech Ltd

Q1 FY25 Earnings Call Analysis

Management growth scorecard

Revenue

Category 2

Margin

Category 2

Fundraise

Order

Yes

Capex

Yes

2 of 5 growth signals are positive.

Revenue guidance

Category 2

→Lakshya Powertech aims for conservative sales/revenue growth of 25%-30% CAGR going forward.
→The company targets at least 30% growth for the current year, potentially exceeding this figure.
→Growth drivers include expansion in EPC projects, integrated O&M, and special services.
→Focus areas for growth include renewable energy projects, data centers (power evacuation and HVAC systems), and oil & gas retrofitting projects worth Rs. 150-200 crore each.
→The company sees potential in new sectors like fire hydrant systems, HVAC, and acoustic panel manufacturing tied to data centers.
→Qualified for bids up to Rs. 500 crore, with ongoing efforts to increase order inflow, especially from data centers and oil & gas EPC projects.
→Expectation of order inflows from ONGC projects and other bids in the next 2-3 months.
→Improved working capital and resolved cash flow issues post-IPO support steady execution of projects and revenue growth.

Category 2

→Lakshya Powertech projects a minimum conservative revenue growth CAGR of 25%-30% going forward.
→The company aims to achieve at least 30% growth in the current year, possibly exceeding it.
→Expected PAT (profit after tax) margins are anticipated around 11%-12% in the coming years.
→Net margins vary by segment: 16%-18% in data centers, 13%-16% in oil & gas EPCC, and 6%-8% in integrated O&M.
→Operating cash flow is expected to turn positive in the current financial year after being negative last year.
→Focus on higher-margin EPCC projects and new segments like data centers and renewable energy is expected to support margin improvement.
→No dividend payouts planned currently; profits are being reinvested for growth.
→The company is expanding order book and expects Rs. 175-180 crores revenue from Rs. 275 crores order book this year.

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→Lakshya Powertech currently has sufficient working capital limits; no immediate need for public fundraise.
→If required, they will negotiate with bankers for enhancement of working capital limits.
→No plans for any public fundraise at present as per Mr. L. Eleswarapu (Whole-Time Director).
→The company intends to recycle IPO funds for working capital management, avoiding fresh capital raising.
→No planned dividend distribution as profits will be reinvested for growth.
→Any future fund requirements will be managed internally or through banking facilities, not public equity.

Yes

→Current net order book stands at approximately Rs. 275 crore.
→Order book split: Rs. 154 crore in EPCC segment, Rs. 115 crore in Integrated Operation and Maintenance (O&M), and the rest in special services.
→Expect to execute Rs. 175 to Rs. 180 crore from the current order book as revenue in the current year.
→Qualified to bid for projects up to Rs. 500 crore.
→Technical evaluation ongoing for ONGC project bids; expect decisions within 60 days.
→Multiple bids including a re-tendering at Bantumilli and 2-3 other projects expected to convert to orders within 2-3 months.
→Expanding focus in oil and gas sector with bids around Rs. 300 crore.
→Renewable and data center projects anticipated to start contributing by mid-2025 (June-September timeframe).

Yes

→Lakshya Powertech is planning capital expenditure primarily for the data center segment, including a Rs. 67 crore investment for a road bank and an acoustic panel manufacturing facility.
→They intend to set up their own manufacturing facility for acoustic panels, comprising fabrication and assembly with automated systems to meet client requirements.
→No significant CAPEX expected outside data centers, but they are also focusing on oil & gas sector projects involving retrofitting old plants with project sizes ranging Rs. 150-200 crore and bidding for up to Rs. 300 crore projects.
→Expansion in services to include HVAC, fire hydrant systems, and acoustic systems, aiming for direct manufacturing and enhanced project scope.
→Qualified to bid for single orders up to Rs. 500 crore.
→No additional working capital requirement currently; existing IPO funds will be recycled into working capital management.

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