Dilip Buildcon Concall Summary: Infrastructure Growth & Market Trends

Table of Contents

Dilip Buildcon Concall Notes – February 2025
FAQs

Dilip Buildcon Concall Notes – February 2025

Financial Performance Overview

Dilip Buildcon reported a decline in revenue for Q3 FY 2025. The stand-alone revenue fell by 16% compared to the same period last year, reaching ₹2,155 Cr from ₹2,571 Cr. The EBITDA also saw a 34% drop, reducing to ₹210 Cr from ₹318 Cr, mainly due to lower revenue. Net profit decreased by 7.37%, from ₹95 Cr in Q3 FY ’24 to ₹88 Cr in Q3 FY ’25.

For the nine months ending December 2024, the consolidated revenue dropped by 5% YoY to ₹8,221 Cr from ₹8,646 Cr. However, EBITDA showed an increase of 37%, reaching ₹1,490 Cr, driven by improved performance in the MDO business and HAM projects. Net profit grew significantly by 185%, reaching ₹563 Cr from ₹198 Cr.

Infrastructure Growth and Government Focus

The government continues to push for infrastructure expansion, allocating ₹1,70,266 Cr to NHAI and ₹1,16,292 Cr to MoRTH. Key investments include:

₹1.5 lakh Cr in interest-free loans to states.
₹45,530 Cr for railway projects.
A goal to construct 10,400 km of national highways in FY ’25.
Targeting 12,900 km of new highway projects, a 50% increase from FY ’24.

A new mega highway program is also in the pipeline, supporting long-term infrastructure development aligned with the Vision 2047 roadmap.

Order Inflow and Future Projects

The company has seen a decline in order inflows over the past 12-15 months, leading to a 16% YoY drop in revenue. Management remains optimistic, expecting a pickup in new project awards, which will stabilize revenues in the next fiscal year.

Order inflow estimate: ₹15,000 Cr – ₹16,000 Cr by March 2026.
Current bid pipeline: ₹1,30,000 Cr.

With these projections, the company is confident in securing new contracts and maintaining financial stability.

HAM Assets and Investment Portfolio

Dilip Buildcon successfully completed the Shrem InvIT deal, ensuring a steady cash distribution of ₹60 Cr – ₹80 Cr per year. The company has transferred 26% stake in seven assets and is working towards divesting 10 more assets once COD (Commercial Operation Date) is achieved.

Additionally, the public listing of its own InvIT is expected to be finalized in Q1 of next year.

Coal Mining Business Update

The company’s MDO (Mine Developer and Operator) business is performing well. Key achievements include:

17.45 million metric tons of coal production in the first nine months.
Expected total production of 25 million metric tons for FY ’25.
Long-term goal to reach 50 million metric tons per year.

The management remains optimistic about further growth in this segment.

Challenges and Industry Headwinds

Despite growth in certain areas, the company faces several challenges:

Lower economies of scale have affected profit margins.
Delayed new government orders have impacted revenue and debt reduction plans.
The company now expects to become net debt-free by FY ’27 instead of the earlier target.
External factors, such as market uncertainty, have made achieving expected growth more difficult.

Future Outlook and Strategic Focus

For FY ’26, Dilip Buildcon expects revenue to be in line with the current year. The focus remains on debt reduction and profitability improvement. Key financial targets:

EBITDA margin currently at 10.5%, with expectations of gradual improvement.
Capital expenditure to be ₹100 Cr – ₹120 Cr, primarily for maintenance and asset replacement.
Cautious approach to new investments to ensure financial stability.

FAQs

1. Why did revenue decline in Q3 FY 2025?

Revenue dropped due to lower order inflows and delayed government projects.

2. How is the coal business performing?

The coal MDO segment is growing well, with production targets increasing steadily.

3. What are the company’s future plans?

Focus on debt reduction, securing new projects, and improving profit margins.

Dilip Buildcon remains committed to long-term growth, leveraging its expertise in infrastructure, HAM assets, and coal mining. The company is optimistic about securing new contracts and expanding its portfolio, ensuring a steady financial future.