Dilip Buildcon – The best-in-class execution!

Q1FY25 UPDATES
My subjective summary of the concall –

 On the execution front challenges adding to debtors, mainly due to elections and lack of payment intent, should slowly pickup as govt intent payments will normalize
 Target debt level 1000 cr shall be achieved soon, delayed a bit
 Creating INVIT by end of FY , in touch with SEBI
 Total prod of coal 7MT VS 5MT ( IN MILLIONS) , this year is 10 MT , EXPECTING 50% incremental production TO 15MT , on target to achieve full capacity in coal
 DBL 2.0 , aim to achieve 0 net debt in next 2 years , slowly building towards that
 Management Intent seems very high , to shape DBL into a large corp ( subjective biased analysis )

 Should be able to reach guidance, have also gone into optic fiber participating in those tenders, hoping some positive flows into that business
 HAM VS EPC (more aligned to EPC) 5-6K CR OF HAM (HYBRID ANNUITY)
 2/3RD EPC IN ORDERBOOK
 1/3RD in rest
 Working capital situation improving after June, from here only looking at reduction of 1000 cr + levels till year end
 Net Cash target by FY26
 Full year finance cost between 350-400 cr , and on other income like dividends from INVIT units should be achieved
 5500 cr revenue in next 3y to accrue in coal business, long term contracts (inflation adjusted) brings stability and adding to the painting of DBL 2.0
 Management playing conservative on growth, which may lead to more positive H2 a case for positive surprise and mor info on the optical fibres as tenders are bid for , will be interesting to track the optical fibres segment in next 3 years
 Tax rates around 33% for FY25 and FY26 , no change in depreciation rate , net block is reduced
 Total capex for the year 150-170 cr ( 30 done in this quarter)
 EBITDA this year conservative to 11-12% , longer term 12-14%

Opinion- ( biased and invested from 460 rupees price , please Take with hand of salt )
I think the transition of DBL as the management is showing strong intent to shape a structural transformation in the company is looking good , a base is seeming to be formed to create a runway of growth in next 4-5 years , only thing now is building a diversified order book in new sectors like water and optical fibres and strengthening the existing balance sheet by debt reduction and cost structures

Only major risk and thing to track remains the management execution and tracking finance costs as every quarter proceeds , and management in next two years needs to walk the talk , or might not create value for incremental shareholders