Hindustan Construction Co Ltd (BOM:500185) Q2 2025 Earnings Call Highlights: Navigating Growth ...

GuruFocus News
3 min read

In This Article:

  • Standalone Revenue: INR 1,203 crores, a 6% increase from INR 1,138 crores in Q2 FY24.

  • Net Profit: INR 50 crore, compared to INR 52 crore in the same quarter last year.

  • EBITDA Margin: 18%, up from 14% in the previous year.

  • Consolidated Revenue: INR 1,400 crores, down from INR 1,800 crores last year.

  • Consolidated Profit: INR 64 crore, a significant increase from INR 6.4 crore last year.

  • Order Book: INR 9,800 crores, excluding a recent LOA of INR 1,032 crore.

  • New Orders: INR 128 crore for Steiner, with a turnover of INR 200 crore and PBT of INR 14.5 crore.

  • Interest Reduction: Annual interest reduction of INR 35 crores due to prepayment of INR 234 crores.

Release Date: October 29, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Hindustan Construction Co Ltd (BOM:500185) reported a 6% increase in standalone turnover, reaching INR 1,203 crores compared to the previous year.

  • The company achieved a significant improvement in consolidated profit, rising to INR 64 crore from INR 6.4 crore in the previous year.

  • EBITDA margin improved to 18% from 14% in the previous year, indicating better operational efficiency.

  • The company has a diversified order book of INR 9,800 crores, with significant contributions from transport and water sectors.

  • Hindustan Construction Co Ltd (BOM:500185) has received a project taking over certificate for the DMR CBC 06 project in Delhi and completed the southbound arm of the Mumbai coastal road project.

Negative Points

  • Net profit for the quarter slightly decreased to INR 50 crore from INR 52 crore in the same quarter last year.

  • Consolidated revenue decreased to INR 1,400 crores from INR 1,800 crores due to lower contributions from Steiner.

  • The company is facing challenges in providing forward-looking statements regarding executable work in the second half of the year.

  • There is a high level of unbilled revenue, which is approximately half of the annual turnover on a standalone basis.

  • The company has a substantial debt level, with total debt including accrued interest at approximately INR 3,600 crore.

Q & A Highlights

Q: Can you provide details on the quantum of work executable in the second half of the year? A: The order book stands at INR 9,804 crore, but we refrain from specifying the exact amount executable in the second half as it would be a forward-looking statement.

Q: What is the impact of reducing the corporate guarantee from 100% to 20% on HCC's working capital? A: Reducing the corporate guarantee is a de-risking move that will aid in raising capital and funding growth. It is linked to the QIP fundraise, which has already received approval.

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