PSP Projects – Construction Company

Q1FY25 revenue at Rs. 612 crore, up 20% YoY

EBITDA at Rs. 73 crore, up 14% YoY

EBITDA margin at 12%, down slightly from 12.69% in Q1FY24

Net profit at Rs. 34 crore, down 7% YoY

Rs. 64 crore revenue booked from Surat Diamond Bourse (SDB) project

Rs. 54 crore EBITDA contribution from SDB project

Core business revenue (excluding SDB) grew 7.5% YoY

Focus on smooth execution of ongoing projects

Aim to ramp up order book with new projects in building space

Increased focus on precast technology by large corporates

Company becoming eligible for broader range of projects (sports complexes, tourism, airports, etc.)

Labor scarcity issues post-elections affecting some projects

Increased material costs and site overheads impacting margins

Lower core EBITDA margins addressed; management expects improvement from Q2

Clarifications provided on debt repayment and SDB receivables timeline

The company’s core EBITDA margin (excluding Surat Diamond Bourse project) was lower than usual in Q1 FY25, at around 3.5-4%.

Management attributed this to several factors:

• Additional expenses of Rs. 25 crores incurred on UP Medical projects due to cost escalations and site overheads.
• New high-value projects awarded in Q4 FY24 are still in initial stages and not yet contributing significantly to EBITDA.
• Some projects faced labor scarcity issues post-elections.

The company expects these issues to be largely resolved from Q2 onwards.

Guided for EBITDA margins to improve to 10-11% range from Q2 FY25.

Some residual impact from UP projects might continue (estimated at Rs. 5-10 crores in Q2), other projects are not facing similar cost pressures.
Debt repayment and SDB receivables timeline:

As of June 30, 2024, the company had debt of Rs. 260 crores.

They received Rs. 104 crores from Surat Diamond Bourse (SDB) in early July.

Rs. 60 crores of director’s loan was repaid using this amount.

Current debt stands at around Rs. 200 crores (as of the call date).

Regarding SDB receivables:

• Total outstanding was Rs. 225 crores.
• Rs. 104 crores received in July 2024.
• Remaining Rs. 121 crores to be received in 4 tranches by October 2025.
• October 2025 is the final deadline, regardless of SDB’s office sales progress.
• March 2025 was never the agreed timeline for full receipt.

Precast facility running at full capacity; revenue expected to reach Rs. 200-250 crore this year
Targeting revenue of Rs. 2,800 crore for FY25
Expect EBITDA margins to improve to 10-11% from Q2 onwards

Outstanding order book at Rs. 5,890 crore, up 11% YoY

Order inflow guidance maintained at Rs. 3,500 crore for FY25

Bid pipeline of Rs. 6,000 crore

Expecting 10-15% annual growth in coming years

Capex of Rs. 17 crore in Q1; projecting Rs. 60 crore for full year

Opportunities in new sectors like semiconductors

Risks from project delays and cost overruns (e.g., UP Medical projects)