Concall Road

Topics: Revenue, Coming out, Mining Pages: 46 (10655 words) Published: April 21, 2014
“Sadbhav Engineering Limited Q2 & H1 FY13-14
Earnings Conference Call”
November 19, 2013

Hosted by

Inga Capital Private Limited

Page 1 of 22


Ladies and gentlemen, good day and welcome to the Sadbhav Engineering Limited Q2 & H1 FY13-14 Earnings Conference Call hosted by Inga Capital Private Limited. As a reminder, all participants’ lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing ‘*’ then ‘0’ on your touchtone telephone. Please note that this conference is being recorded.

I now hand the conference over to Mr. Nitin Patel – Executive Director, Sadbhav Engineering Limited. Thank you. And over to you, Mr. Patel.

Nitin R. Patel:

Good evening, everybody. On behalf of Sadbhav Engineering Limited I warmly welcome all the participants who have taken their valuable time for the Second Quarter and first half of FY14 Earnings Conference Call. I am sure you must have had an opportunity to see the highlights on Q2 results which were released on the stock exchanges. To start with, this year, as you all know, monsoon was the longest and was above average of many years due to which it has impacted the execution of projects to some extent in this quarter. However, with all the pre-clearances in place for the projects and a reasonable order book position we expect company to show healthy growth from second half onwards as far as the Construction business is concerned.

Now, let me start with the summary of this quarter’s standalone financials. Revenue for the quarter has increased by 12% to Rs.375.40 crores as against Rs.334.50 crores last year. EBITDA for the quarter has increased by 24% to Rs.38.8 crores against Rs.31.4 crores last year. Profit after tax for the quarter was Rs.28.1 crores as against Rs.6.4 crores of the last year. This year’s PAT include the reversal of tax provision of Rs.18.68 crores because of completion of assessment of earlier years. This reversal is due to benefit of Section 80-IA being taken in the assessment by the company. EBITDA margin for the quarter stood at 10.3% as against 9.4% in the same period of the previous year. Margins have improved because of the change in the sector mix of the Construction business. The contribution of high margin Mining business has improved significantly, while at the same time low margin Irrigation business has reduced. Now, starting with the business update, to start with the EPC business, let us first discuss on the EPC business. Our order book as on quarter end stands at Rs.9,241 crores out of which Transport sector contributes 56%, Irrigation sector contributes 22% and balance is from Mining sector. Currently, we have 54 projects where the work is going on. With termination of the Concession Agreement of the Solapur-Bijapur project that order has been removed from the order book. Work has started in Rajsamand-Bhilwara project w.e.f. 9th of October. Chhindwara Project has contributed Rs.150 crores to revenue in this quarter as compared to Rs.24 crores in the same period of the last year. Rs.70 crores is the highest revenue generation per quarter by Mining in this quarter in the history of the company. This shows the Mining sector is growing gradually, also the order book. We also expect the Mining sector to maintain momentum for the coming quarters which is the high margin segment. With the start of tolling of developed section, company has started receiving the outstanding payment from Dhule-

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Palesner Tollway Limited and Hindustan Construction Company which was long outstanding since last one and a half years. The order book breakup and the revenue break up is provided in the highlights also.

The new projects won after the last earning call. The company has won 11...
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