Nila InfrastructQ2 FY21Realty

Nila Infrastruct

Q2 FY21 Earnings Call Analysis

Management growth scorecard

Revenue

Category 3

Margin

Category 3

Fundraise

N/A

Order

Capex

Yes

1 of 4 growth signals are positive — mixed outlook.

Revenue guidance

Category 3

→Q1 FY22 financial performance showed strong recovery compared to Q1 FY21, indicating positive momentum.
→EBITDA margin is nearly back to normal, with expectations of further improvement if no new COVID waves occur.
→Company confident of reasonable growth potential for FY22 based on healthy order book and project execution visibility.
→Order book is well balanced and focused on affordable housing and urban infrastructure, with 88% from higher-margin PPP projects.
→FY22 is expected to be better than FY21 in terms of revenue and profitability, with profitability anticipated by year-end.
→FY23 is considered the year when operations will return to full rhythm, post-pandemic disruptions.
→The company plans to continue building on current growth by timely execution of projects and expanding margin.
→Labor availability and project groundwork have normalized, supporting sustained execution and revenue realization.

Category 3

→The company expects FY22 to close with profitability, improving from losses in prior periods, as indicated by Deep Vadodaria.
→Revenue and profitability are expected to build back after the disruptions caused by COVID-19 waves.
→Focus is on higher profitability order mix (88% of unexecuted order book in higher margin businesses, mainly PPP).
→Long-term plans remain in place with optimistic outlook on logistics parks and scaled-up operations like Maruti production.
→EBITDA margins are returning to normalcy and rising spreads may positively impact coming quarters.
→FY23 is expected to see a return to full rhythm and growth post-pandemic recovery.
→The company refrains from giving explicit earnings or order book guidance but is comfortable with current order book position and actively bidding for new opportunities.

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→No specific mention of any current or future new fundraising through debt or equity was made.
→The company has renegotiated the rate of interest with lenders for existing and fresh debt, resulting in a marginally lower average interest rate.
→Higher utilization of fund-based limits has increased finance costs but no new fundraising plans through debt or equity were indicated.
→The company currently enjoys an investment-grade credit rating of BBB+ Stable and A2.
→Focus appears to be on executing existing projects and strengthening financials rather than seeking new fundraising.

→As of June 30, 2021, Nila Infrastructures has a confirmed and executable order book of Rs. 5,411 million.
→The order book is well balanced, with 88% (Rs. 4,762.8 million) in affordable housing and 12% in urban infrastructure projects.
→High margin PPP projects constitute 69% (Rs. 3,706.3 million) of the orders.
→Geographically, 81% (Rs. 4,361.9 million) of orders are from Gujarat; 88% come from government entities including Ahmedabad Municipal Corporation and Government of Rajasthan.
→The company is executing 7,184 units of affordable housing.
→There was no addition of new orders in the recent quarter mainly due to COVID Wave 2 affecting client clarity.
→A significant revision was made to an AMC slum rehabilitation order, increasing residential units by 1,475 and raising unexecuted confirmed orders and TDR eligibility by Rs. 1,498 million.
→The company is confident about its current order book and continues actively bidding for new opportunities.

Yes

→The transcript does not explicitly mention any specific current or planned future capital expenditure (capex) or strategic investment in detail.
→However, it is noted that:
→ - The company has started ground work on several projects that had been delayed due to COVID-19.
→ - There is mention of fresh CAPEX leading to increased depreciation and amortization expenses.
→ - The production scaling up, including Maruti’s third unit starting, hints at operational scaling but not direct company capex.
→ - The company is working on unlocking value from land parcels, especially with roads opening on the SIR TP1 area, potentially enabling future capitalizing on these assets.
→Overall, while specific capex figures or projects are not detailed, ongoing project execution and unlocking land value imply continued investment focus.

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