Road Construction players – Who will win the race along the upcoming freeways?

Ashoka Buildcon Q1 FY25 concall:

Poor connectivity during concall. MD was travelling during the concall. Maybe he needs to take investors seriously.

Expecting road orders (national level) of ~3700 km amounting to ~Rs. 93000 cr. Ashoka will bid for ~2400 km (Rs. 78000 cr). Major inflows should come in Q3 / Q4.

PAT margin will be in range of 8 – 10% by H2.

Revenue guidance for FY25: 15 – 20% growth; for FY26 targeting 20% growth

Order inflow guidance: addition of 10000 – 12000k during FY25. Currently, company is having 1x order/ sales. This is low. Ideally this should be 2.5 / 3x. However, new orders from NHAI was very low over last 1 year. This should revive now that the elections are over.

Getting into EPC for water projects. Currently working on 1 project. Hired new person to lead this vertical. Margin will be in range of current EPC projects (8 – 10%). Slowly this vertical will be 18-20% of business few years down the line.

International business is currently focusing on 6 countries. 2nd generation is focusing on international business development. This will work independent of India operations. Over the next 2-3 yrs, they should be contributing 20% of revenue. EBIDTA margin from international business is in line with India business (may be 1-2% more)

Asset monetization: Sale of 5 BOT & 11 HAM projects are in advance stage of signing SHA. Should be announced soon.

working capital loan in standalone entity will be ~Rs. 1200 Crs. (increased due to increase in business)

In HAM projects, Rs. 120 Cr equity is pending to be infused, to be done in FY25 itself (so far infused Rs. 919 Cr)

Capex of Rs. 100 – 110 Cr for FY25, of this Rs. 10 Cr done during Q1.

I have not mentioned many data points discussed in concall as the same are available in investors presentation

For power T&D, we quality for projects upto 300 kV. Can’t bid for higher voltages.

Depreciation: existing depreciation should be ~Rs. 20 Cr / quarter. For capex done during current year, next year depreciation will be additional 20-25 Cr.