Yet again very bad quarterly results reported by SWS. Inspite of continuous assurance from the management that things will return to normal, we still see losses and net worth has turned negative on consolidated basis. Few key highlights from concall and ppt
- Quarterly P&L: impacted by the provisions of around 270+cr due to the cost overruns, quality issue and desired output challenges on projects related to legacy book. Also, there was significantly low execution during the quarter. Inspite of management guidance of Gross margin positive for last few quarters, we see huge -ve at GM level. New guidance is to be Ebidta positive from Q2FY24 (only time will tell)
- Order Book: Current order Book stands at ~5000cr incl ~500cr legacy order. Management guidance of cost/revenue neural for legacy order and no more big losses from this legacy book.
- Targetted gross margin 10-11% for remaining orders. This is blended margins incl domestic, international and O&M
- Expected to close Nigerian contract by Q1/Q2FY24. There is delay in the closure due to general election in the country. Expected inflow of 1.5$bn. Execution expected to start from Q4FY24
- Addition to this, there is high visibility of orders totalling 4000cr+ domestic and another 5000cr from international
- RIL order inflows: Still discussions are going on but no clear timelines or roadmap on expected order size and time period.
- Indemnity and other Receivables: around 1200-1300 cr cash is blocked due to indemnity and other receivables. Approx 450-500cr expected to be recovered from Promoters in Sep 2023. Balance to come in following years post crystallization of indemnity after final arbitration. Company will have to bear the interest cost.
- Gross debt stands at 2000+ cr. Borrowing current rate is 9.5%. May go up as repo rate will go up.
Inspite of all the assurance in the past, we continue to see losses and complete errosion of equity infused post stake sales to RIL
Subscribe To Our Free Newsletter |