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RPP Infra Projects LtdQ1 FY17

RPP Infra Projects Ltd Q1 FY17 Earnings Call Analysis

Revenue, margin, capex, fundraise and order book outlook from management commentary.

Price: 65P/E: 10.6Market Cap: ₹395 CrSector: Construction

Management growth scorecard

Revenue

Category 2

Margin

Category 3

Fundraise

N/A

Order

Yes

Capex

N/A

1 of 3 growth signals are positive — mixed outlook.

Full analysis

Revenue guidance

Category 2
  • Expected order book growth to Rs. 1,500 crores by FY 2018 from Rs. 820 crores as of March 2017.
  • For FY 2018, targeted execution of approximately Rs. 550 crores in revenues.
  • Participation in larger ticket size projects, including JV bids up to Rs. 450 crores, indicating scaling capabilities.
  • Focused on irrigation, pipeline, road, and building projects primarily in South India (Tamil Nadu, Karnataka, Andhra, Telangana) and expansion into Madhya Pradesh.
  • Anticipated increase in projects under government schemes like AMRUT, promoting opportunities in water management and affordable housing.
  • EBITDA margins expected to be maintained between 14%-15%, supporting sustainable profitable growth.
  • Project execution timelines generally 12-36 months, enabling steady revenue recognition over the medium term.

Margin guidance

Category 3
  • Order book expected to grow from Rs. 820 crores to Rs. 1,500 crores by FY 2018, indicating strong future revenue growth.
  • EBITDA margins maintained around 14%-15%, supported by higher-margin irrigation and pipeline projects.
  • Focus on bidding projects with margins above 15% to protect profitability despite raw material price fluctuations.
  • Execution timeline typically 1-3 years, leading to steady revenue recognition and cash flow.
  • Expansion through joint ventures in larger projects (e.g., Rs. 450 crores NHAI project) to increase revenue scale.
  • Growth driven by government schemes like AMRUT, targeting irrigation, pipelines, roads, and affordable housing primarily in South India.
  • Expect continuous participation in good-margin projects, contributing to stable earnings and EPS growth over the next 2-3 years.

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Fundraise plans

  • There is no specific mention of current or future fundraising through debt or equity in the transcript.
  • The company discussed bidding for larger projects, including joint ventures, but did not indicate plans to raise capital for this.
  • Working capital improvements were mentioned, but mainly focus was on managing debtor cycles rather than raising new funds.
  • No explicit statements about upcoming equity issuance or debt borrowing were made during the call.

Order book

Yes
  • As of March 31, 2017, RPP Infra Projects Limited's order book stood at approximately Rs. 818 crores.
  • The company has around Rs. 460 crores worth of projects in L1 status, comprising four projects.
  • The expected order book size by the end of FY 2018 is projected to reach Rs. 1,500 crores, including current orders and L1 projects.
  • The execution timeline for the order book is generally up to two years.
  • The company is actively bidding on new projects, including larger-size contracts via joint ventures (e.g., Rs. 450 crores NHAI project in JV).
  • Focus remains mostly on southern states—Tamil Nadu, Karnataka, Andhra Pradesh, Telangana—with recent entry into Madhya Pradesh.
  • Major segments include irrigation (lining canals), water pipelines, roads, and building projects (mainly government residential and institutional buildings).

Capex plans

  • The transcript does not explicitly mention any current or future capex or strategic capital investments planned by RPP Infra Projects Limited.
  • The company is focusing on expanding its order book and bidding for larger projects, including joint ventures (JV) for big EPC projects, such as a Rs. 450 crore NHAI project and work with TANGEDCO.
  • Emphasis is on executing irrigation, pipeline, road, and building projects mainly in four southern states and recently Madhya Pradesh.
  • Growth is driven by order book expansion and project execution rather than explicit capex.
  • No specific mention of investments in plant, machinery, or other strategic capital expenditures during the call.

How does RPP Infra Projects Ltd rank vs peers in Construction?

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