Sadbhav Infra. Q1 FY22 Earnings Call Analysis
Revenue, margin, capex, fundraise and order book outlook from management commentary.
Management growth scorecard
Revenue
Category 3
Margin
Category 3
Fundraise
Yes
Order
N/A
Capex
Yes
2 of 4 growth signals are positive.
Full analysisRevenue guidance
Category 3- For FY2022, Sadbhav Engineering expects a **15% to 20% growth** in revenue compared to FY2021.
- Growth driven by revenue from newly started projects such as **Surat Metro and Dholera projects** which will contribute additional revenue this year.
- The company aims to improve the revenue run rate, targeting **Rs.600 Crores to Rs.700 Crores per quarter** once COVID-related disruptions normalize.
- Focus remains on executing and winning new EPC projects; bids worth around **Rs.11,200 Crores** have been submitted for six road EPC projects.
- Monetization of assets like Ahmedabad Ring Road, Maharashtra Border Check Post, and HAM projects is expected to strengthen the balance sheet and support growth.
- Execution is anticipated to improve as land acquisition and pandemic-related delays are resolved, aiding topline expansion.
See what Sadbhav Infra. management said on margin guidance — free account, 30 seconds.
Fundraise plans
Yes- Sadbhav Engineering has reduced standalone debt by Rs. 90 Crores in April, indicating active debt management.
- SIPL has completed equity infusion for all HAM projects by end of April, improving liquidity.
- Equity infusion and monetization efforts, including sale of assets like Ahmedabad Ring Road, three HAM projects, and Maharashtra Border Check Post, are ongoing to deleverage the balance sheet.
- Raised Rs. 991 Crores in April through asset monetization supporting cash flow.
- Long-term debt raised from Alliance and AMP after March 2021 to replace mutual fund debt.
- Working capital and fund limits appear adequate; no liquidity crunch reported.
- Focus remains on EPC bidding (Rs. 11,200 Crores worth submitted), possibly requiring future funding depending on project wins.
- No explicit announcement of fresh equity or debt fundraising, but active capital restructuring and monetization ongoing to improve financial position.
See what Sadbhav Infra. management said on order book — free account, 30 seconds.
Capex plans
Yes- FY2022 capex depends on new projects as existing projects already have equipment in place (Page 16).
- No specific capex numbers provided due to dependency on new project acquisitions (Page 16).
- Current focus is on EPC projects with bids submitted for six road EPC projects worth Rs.11,200 Crores (Page 6).
- SIPL has completed equity infusion of Rs.1,070 Crores for nine HAM projects, indicating strategic investment in HAM projects (Page 4).
- Monetization of assets like Ahmedabad Ring Road and Maharashtra Border Check Post is underway to raise funds and support equity commitments (Pages 6, 12).
- No immediate new bids or capex mentioned apart from existing submitted bids; waiting for bid openings to decide further (Page 12).
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Margin guidance
Category 3- Revenue guidance for FY2022 anticipates a 15% to 20% growth over FY2021, driven by ongoing and new projects like Surat Metro and Dholera.
- EBITDA margin is expected to stabilize around 12%-13% based on the current order book and normal course of operations.
- The company aims to improve execution with full operational activity post-COVID second wave disruptions, potentially increasing quarterly revenue run rates toward Rs.600-700 Crores.
- Other income benefits from interest and write-backs contributed positively in Q4, possibly supporting profitability.
- Focus remains on EPC projects with bids submitted worth approx. Rs.11,200 Crores, expected to sustain growth momentum.
- Tax planning includes utilizing available MAT credit (~Rs.110 Crores), with flexibility on tax regime choices to optimize net profitability.
- Debt reduction and monetization strategies are ongoing to improve financial health, indirectly supporting future earnings growth.
Order book
- As of March 31, 2021, the total order book stands at Rs.9,328 Crores.
- Segment-wise order book breakdown is provided in the media release (details not specified here).
- SIPL has a current outstanding order book of Rs.3,990 Crores, including ongoing HAM projects and SPVs sold to IndInfravit Trust.
- Six road EPC projects worth Rs.11,200 Crores have bids submitted; bid openings are expected soon.
- Executable order backlog is estimated at around 60%-70% of total order backlog of Rs.9,300 Crores, considering some projects are pending land acquisition.
- Irrigation projects have moved partially; mining has not moved this quarter.
- Some non-executable portions include irrigation with Rs.170-180 Crores under execution.
- The focus is currently on EPC bids and projects with significant competition.
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What Sadbhav Infra.'s management said in earlier quarters
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