Release Date: February 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- NBCC India Ltd (BOM:534309, Financial) achieved a total income of INR6,566 crores and a PBT of INR361 crores for the nine months, marking a 63% year-on-year increase.
- The company secured business worth INR10,000 crores in the last nine months, significantly higher than the INR6,500 crores secured in the previous year.
- The Amrapali project contributed INR1,170 crores to the turnover, with 16,000 out of 38,000 housing units completed and another 14,000 units expected by December 2024.
- NBCC India Ltd (BOM:534309) has made significant progress in redevelopment projects, with the Nauroji Nagar World Trade Center 93% completed and other projects like Netaji Nagar and Sarojini Nagar in advanced stages.
- The company has a strong focus on real estate sales, achieving INR117 crores in sales compared to INR37 crores in the same period last year, with plans to sell an additional INR50 crores by the end of the fiscal year.
Negative Points
- The company faces challenges in securing and awarding new projects, with a significant portion of the INR55,300 crores order backlog yet to be awarded.
- There are ongoing issues with the Amrapali project, with only INR2,000 crores of work remaining and additional FAR business still pending.
- The real estate segment has posted continuous losses in the past two to three quarters, primarily due to provisions towards losses.
- The company has a high contingent liability of INR1,400 crores, mainly due to disputes with contractors, which could impact future financials.
- NBCC India Ltd (BOM:534309) faces delays and challenges in approvals and clearances for redevelopment projects, which could affect the timely execution and revenue realization.
Q & A Highlights
Q: What would be the update on your guidance of the top line of INR11,000 crores in this fiscal and INR25,000 crores that you mentioned in the next fiscal?
A: Definitely, we will achieve between INR10,500 crores to INR11,000 crores. For the next fiscal year, we are targeting INR13,000 crores. The INR25,000 crores target is for the next five years.
Q: I would like to know about the order inflows that we had in the nine months. And overall, what is the target for FY24 and '25?
A: For the nine months, we have secured INR10,000 crores in orders. We expect another INR10,000 crores within the current fiscal year. For FY25, we are targeting INR20,000 crores in new orders.
Q: What is the order backlog at the end of nine months?
A: The order backlog is INR55,300 crores on a consolidated basis, with INR45,230 crores on a stand-alone basis.
Q: What are the PAT and EBITDA margins that we're looking at for this year and the next year?
A: For the current year, EBITDA margins are expected to be 5% to 5.5%, and PAT margins around 5%. For the next year, EBITDA margins are projected to be 5.5% to 6%.
Q: What is the status of the Amrapali project and the pending order book from it?
A: Out of INR8,000 crores, we have completed around INR6,000 crores. The balance workload is INR2,000 crores. We expect to get additional FAR worth INR8,000 crores to INR9,000 crores soon.
Q: What is the current land bank available and the plan for real estate sales in Q4 and FY25?
A: We have a total inventory of INR600 crores, out of which INR117 crores have been sold. We plan to sell another INR50 crores by March. For FY25, we expect real estate sales to be around INR200 crores to INR250 crores.
Q: What is the split between PMC and redevelopment in the order book?
A: Out of the total INR55,000 crores order book, 90% is PMC, which includes redevelopment. If divided, it is approximately 50-50 between PMC and redevelopment.
Q: What are the major opportunities and focus areas for NBCC in the upcoming months?
A: We are focusing on housing sector opportunities, land monetization, stressed real estate projects, overseas projects, and diversification into metro railways and other sectors.
Q: What is the vision for achieving INR25,000 crores in revenue, and what will be the contribution from redevelopment versus PMC?
A: We aim to achieve INR25,000 crores in revenue by FY27-28. Approximately 50% will come from redevelopment and 50% from regular PMC projects.
Q: What are the challenges faced in redevelopment projects, and how do you plan to overcome them?
A: Challenges include approvals, tree removal, and encroachments. We have resolved most issues in the seven GPRA project and expect smoother execution in future projects.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
