Ashoka Buildcon (NSE:ASHOKA) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to Ashoka Buildcoin Q2 FY 'twenty seven Earnings Call hosted by Anandati Share and Stockbrokers Limited. As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand this conference over to Bhavin Modi from Anandrati Shell and Stockbrokers Limited. Thank you, and over to you, sir. Thank you. Hello, everyone. On behalf of Anandati International Equities, I extend a warm welcome to the Ashoka Buildcon Limited Q2 and H1 FY 'twenty seven earnings conference call.

0:52 We are pleased to have with us today Mr. Satish Parak, Managing Director and Mr. Paresh Mehta, Chief Financial Officer. Without further delay, I invite Mr. Satish sir to share his opening remarks, following which we will open the floor for a Q and A session. Over to you, Yes. Thank you, Bhavin. Good afternoon, everyone. A very warm welcome to all for joining this call for Ashoka Buildcon Earnings Conference Call for the Quarter Ended 09/30/2026. Joining me on today's call is our CFO, Mr. Paresh Mehta. I hope everyone had an opportunity to review financial results, investors' presentation, which have been uploaded on the stock exchanges and company's website.

1:48 Let me begin by giving you a perspective on the industry environment and then take you through the key highlights of the company. Industry environment. Q2 FY 'twenty seven has commenced a positive note for infrastructure sector, supported by an increase in domestic highway project awards. Additionally, encouraging opportunities are emerging across other key segments, including railways, power transmission, power distribution, international infrastructure projects, providing further impetus to the sectoral growth. As far as fresh project awarding is concerned, there's a significant improvement.

2:35 In July 2026, NHI awarded approximately 127 kilometers of highway. In August, NHI awarded around 95 kilometers of highways. Cumulatively, NHI's awards reached three twenty nine kilometers by August end. More importantly, ministry reported that National Highway project awards reached 2,236.3 kilometers during April to September 2027, up by 62.9%. And it's our plans to award 5,200 kilometers in FY 'twenty seven, which is up by 66% compared to last year. If you look at construction progress, we still see a weakness.

3:27 Despite the improvement in awarding, construction activity remained under pressure. About 2026, construction declined by 122021% month on month to approximately 182 kilometers. Cumulative construction during April, September stood at approximately 2,069 kilometers, down by 18%. And it has targeted construction targeted to construct 4,950 kilometers of ore in FY 'twenty seven, down 7% year on year. So while we remain positive on long term fundamentals of road infrastructure, we believe the sector is currently undergoing a period where the focus is shifting from simply avoiding more kilometers to ensuring these projects are properly appraised, land is made available and execution can proceed efficiently.

4:39 For us, this makes diversification particularly important. At the same time, the medium to long term opportunity in infrastructure remains very strong. The union budget has provided a significant push to the railway sector, which is our focus now with a record capital expenditure allocation of approximately 2.93 lakh crores. The government has also announced seven new highway speed rail corridors covering around 4,000 kilometers, with an estimated investment potential of nearly INR 16 lakh crores, along with 2,052 kilometers of dedicated freight corridors between Dankuni and Sonat.

5:29 This is important because the opportunity in railways is no longer limited traditional track construction. It necessary plus spans over electrification signaling, safety systems, fleet infrastructure, station development, and other specialized EPC requirements. For Ashoka, this creates an opportunity to leverage its existing execution capabilities and participate in infrastructure spending beyond the traditional growth segment. The Power Transmission and Distribution segment is another area where we see strong structural growth. India is adding renewal generation capacity at a rapid pace, but the success of this transition depends equally on the ability to evacuate and transmit that power to consumption centers.

6:20 This is driving significant investment in interstate transmission systems and energy corridors. Let me now highlight some key business developments post Q1 FY 'twenty seven earnings call. During Q2 FY 'twenty, the company received LOA from RVNL, Rail Rigas Nigam Limited for the project of new BG rail line in the state of Uttarakhand. The project cost is INR $60.02 crores, including GST. During Q2 FY 'twenty seven, we received from RDC Power Development and Consultancy Limited for the project establishment establishment of 400, two twenty and one hundred thirty two kV lines at Sakule District Bandhara on TBCB that is tariff based competitive bidding with completion period of twenty four months and operation and maintenance period of thirty five years.

7:45 This is first ever time this company built, which is popularly known as TBCB project by the company. And this project is in the state of Maharashtra. What makes this project strategically relevant is that represents our entry into TBCB framework in transmission sector, thereby adding another vertical to our infrastructure portfolio. Updates post Q2 FY twenty twenty seven till date. So recently, we have received a letter of acceptance from North Eastern Railway NER for the project at a value of INR $2.90 crores, including GST.

8:33 This is commercial operation COD commercial operation date COD for NHI project for full inning of Tunku Shumoga of Ham project in Karnataka for balance 45.05 kilometers. Thus, now SPE is eligible to receive to the first annuity. During Q2 FY 'twenty seven, total provisional COD was received for an HR project for its full earning from Tokutu Shimabukuro in package three for 4.22 kilometers after descoping by NHI. Thus now SPV is eligible for receipt of full annuity. As a part of portfolio streamlining, no development in this quarter.

9:22 Coming to the order book status. As on 09/30/2026, order book stand at INR 15,964 crores. Excluding orders received post September 30, which are almost INR $12.57 crores, totaling to INR 17,222 crores. Breakup is roads and relay project comprise around 9,274 crores, which is 58% of our total order book. Among the road projects available, hand projects are to $14.36 crores and EPC of INR 6,172 crores. Part India accounts for 3,820 crores, which is 23.93%, approximately 24%.

10:17 The building EPC amounts for around $9.40 crores, which is 5.9%. Orders in our subsidiaries and associate companies are INR $19.28 crores, which is 12.08% of our total order book. New order received after 10/01/2026, $3.91 crores. And we are L1 bidder for Madhutra Mumbai Expressway, package nine for INR $8.65 crores. So which makes our total balance order book as on date as $72.22, 17,222 crores. With this, I request Mr. Paresh Mehta, CFO, to present the financial performance.

11:11 Thank you very much. Starting with the stand alone numbers for Q2 FY 'twenty seven. Total income stood at INR $1,357,356.24 crores as compared to INR $13.00 2.62 crores in Q2 FY 'twenty six, flat on year on year basis. EBITDA for the quarter stood at INR 133.94 crores with a margin of 9.88%. Profit after tax stood at INR 37.96 crores against INR $901,139.18 crores of our Q2 FY 'twenty six, which included exceptional items of INR 112 crores.

12:01 Our revenue contribution for each segment for Q2 FY 'twenty seven is as follows: Road EPC contribution was 12.2% Road HAM contribution was 8.6% Power T and D contribution was 22.94% Railways stood at 13.57% and other segments like building EPC and others contributed 3.69%. For H1 FY 'twenty seven, total income for H1 stood at 2,676.68 crores as compared to INR 2,641.73 crores in FY 'twenty six. EBITDA for H1 'twenty seven stood at 259.47 crores with an EBITDA margin of 9.69%.

12:54 Profit before tax stood at INR 94.46 crores and Patch stood at INR 69.52 crores as compared to INR 169.8 crores in H1 FY 'twenty six. Coming to consolidated numbers, Total income for Q2 FY 'twenty seven stood at INR 1,609.21 crore as compared to INR 1,907.88 crore in Q2 FY 'twenty six, down by 15%. EBITDA for the quarter stood at INR 3 and 40.67 crores. EBITDA margin with an EBITDA margin of 19.55%. Profit after tax stood at negative INR 118.96 crores during Q2 FY 'twenty seven.

13:42 In Q2 FY 'twenty seven, in our Beauty division, our company recorded a gross total toll collection from its Jarvanagar product company of INR 73.5 crores. With this, we now open the floor for question and answers. Thank you. Thank you very much. We will now begin the question and answer answer Participants are requested to use handset while asking a question. The first question is from the line of Baibhav Shah from JM Financial.

14:35 Go ahead. Sir, what has been the order inflow in first half and year to date in terms of EPC value? So in Q2, the order intake was INR $19.66 crores with and for Q1, I will just tell you. $3.52 crores. What do want?

15:35 Yeah. Anything further? Hello? Hello? Mister? Mister, you are not audible. Am I audible now? Yes, sir. Yes. So of course, Q1 employee didn't get the number. Q1 was INR $3.62 crores. And what have you received in October so far? So that is INR $3.91 crores plus INR $8.65 crores, so around INR 1,200 crores. So in the presentation, you have mentioned that there are two SPE projects for INR $20.19 crores, that won't be on the stand alone order backlog?

16:27 So they are in the backlog of the but the revenue will be recognized at the SPV level. It won't come in stand alone. The revenue will not be recognized as stand alone. It will be recognized as CPFL. That's all. Okay. Secondly, what is our CapEx target for the year? So up to date, CapEx was around INR 62 crores and target is approximately INR 125 crores for the whole year. Okay. And what is the equity to be invested now pending? Equity to be invested is INR $3.40 crores for the HAM projects, including the HAM projects, to be invested for INR $26.27 INR 153 crores, 27 crores, $28,114 crores and INR 72 crores for 2829.

17:23 INR 163 crores in second half? 103. 153 is in second half of this year. Yeah. Yeah. Because we have received the opportunity just recently. So there, we'll be doing major infusion of equity of around INR 25 crores. And how much of infusion first half in HAM projects? In the first half, 60 crores. And sir, lastly, on the monetization of HAMs, the remaining HAMs, what is the time line? When do we expect to receive the proceeds? So we are on the round around the corner for monetizing the four HAM projects. The two HAM projects will probably happen in the Q4 or Q1 of next year, that is Bhaswanpur and Tukoshi Mogaf four. So of the six, four will happen by December.

18:22 Before the September, maybe in the next couple of weeks. And the proceeds from the four and the two assets? Proceeds from the four assets will be in the next two weeks' time. For so the we have already signed off on the sale of the transaction. The actual monetization will happen in Q4 or Q1 of FY 'twenty seven. And what is the amount we expect to receive from four and two assets? So four and two assets, approximately INR 1,000 odd crores will be received. The first tranche will be approximately 600 crores. So from INR 600 crores in the last two, INR 400 crores?

19:10 Yes. Okay. Okay. And sir, one more one last booking question. What are we what debt target are we having for March 'twenty seven? March 27, the four assets will be sold. So today, we have a total debt of INR 2,071 crores. The four assets debt will go off the console of ABL. So we'll be left with INR 2,000 crores of debt, which will be split into project debt of INR 800 crores and balance would be working capital. So stand alone, we target roughly INR 200 crores by year end?

19:57 Stand alone debt would be approximately INR 1,000 crores, which based on today's numbers, actual which will transpire would be substantially less because there'll be realization of monetization also, but there'll be some investment in new projects also, OHND and others. So the estimated stand alone date as of March thirty seven... March 27 would be in the range of 6 to 700 crores. Even about the investments? Pardon? You will have to attend the investments. Yeah. Yeah. Yeah. Yeah. Yeah. Okay. Thank you, sir. I'll follow-up in the queue. Thank you very much, ladies and gentlemen.

21:02 The next question is from the line of from GM Financial. So thanks for the follow-up. So we have some so out of the INR 2,100 crores of debt we have on a stand alone basis as of September. So of that, what would have been third party? What is from the SUVs that we have taken? So third party total gross debt is INR $2,007.81 crores. Sir, on stand alone. On stand alone? Yes. On stand alone, $11.69 is the lender's debt, balance is company.

21:48 But when we say that we are targeting roughly INR 700 crores of debt by March, that is only third party we are targeting or the including everything? No, this is third party, it is outside debt from lenders. That will be INR 600 crores. The sister consent date, but gets owned by the sister consent their own network. So it's not a from the group concept, it's not a outflow. But you will be paying interest on that, right? So the interest outflow will be there, even on the Agree, agree. But that will remain in the system Because these are largely these are all 100% loan companies of ABL.

22:35 So from finance, from numbers point of view in modeling, so the interest portion will be still remaining higher, something around that interest on $15,000 of debt. Have Yes. That is... Yeah. That interest will be there. Okay. Okay. And, sir, lastly, execution was quite fine in the first half, but margins have been quite weak at around 7.1% in the first half. So how do you see the margin for the entire year FY 'twenty seven and revenue growth? So we expect the margin to inch up by one percent point by the year end. But probably we'll have to see from perspective of the next two to three years how the existing order book will get executed.

23:25 And then based on that, really, we'll be in an average of 1010% to 10.5% of EBITDA margins. So for second half, we expect something around 9% odd? Yes. 9% to 9.5%. And what will lead this improvement from 7% to 9.5 in second half? So the existing projects which we are executing, where Gadore is yet to ramp up, like the road projects in Maharashtra and other projects, international projects, they will contribute to the increase in the ramp up. And our revenue guidance for this year? So revenue guidance will be as flat as last year.

24:16 At present, what we see, we'll target around to achieve at least 5% output. I think we'll have to move look more from a larger period, typically because of execution sometimes get delayed due to various reasons. But in the larger framework of three years, we'll be in the range of 15% CAGR. So 20% should be a much higher number in terms of growth? 27 being flattish? Right. So because earlier, we're targeting much better numbers in terms of revenue growth for... So we're targeting 10 to 15% for this year. Now given the current scenario, we are looking for a flattish growth?

25:03 Yes. Based on the order intake, which is coming late, we may achieve 10%, which is approximately INR 6,600 revenue for by March end. But we'll have to probably see how the execution happens. Based on existing, we may have around 10% growth overall. On stand alone. Right? Stand alone. Okay. And, sir, lastly, on order inflow, what is our guidance for the year? So another 3,000 to 5,000 is what we are currently bidding. So now order Bidding has started at a good pace. So orders... Of course, bidding will happen, but how fast the order is all depends upon the government.

25:53 But what we are targeting is taking that, of course. That is beyond what we received till October. In the last four months, we are targeting three to five hours. Yes. Four, five months. Right. Okay. Thank you. Those are my questions. Thank you. Thank you very much. The next question is from the line of Vasudev from. Please go ahead. Yeah. Thank you for the opportunity. So, sir, from this BOT statement that we have done, we have received the entire amount or something is still pending to be received? Largely, have received most of it. Some amount is expected to be received by March 8, approximately 15 odd crores.

26:42 And there is a deferral based on toll collection, which will be received over, say, next two to three years' time. There are two portions of it. Okay. And sir, how much have we received in total until now? So we have received approximately INR1700 crores on the BOT plus another 20 crores, which we received in the last two quarters. Okay. And so then do we have any plans right now for Chennai Water and Jawaramayagam stake sale? So we are pursuing both the projects for sale, and we are talking to potential investors. As in when we have a complete plan, we'll come back to the investors for for starting.

27:34 Okay. Sir, could be a bid pipeline right now if you can break it up across segments? So total bid pipeline for Ashoka Buildcon is 51,000 crores immediately, which includes NHI, MRTH, railway seats. This is from the visibility of orders which have already been announced, like tenders which have been announced. Okay. Got it, sir. And have you bidded for any project? Yeah. Beg your pardon?

28:20 Have you bidded for any projects where bids are yet to open? Around 800 crores bids or 8,000 crores bids are yet to be opened, 170 kilometers. The next question is from the line of Bhavan Modi from Anand Raffi Sheridan Stockbrokers Limited. Sir, can you just help us? How are we pleased with respect to the BOT road projects? I see a lot of big ticket BOT projects are coming in. So even if we win one or two projects, our order book should buy INR 6,000 to INR 12,000 crore.

29:07 So so are we, like, open to the beauty projects? And how are you placed, you know, when it comes to the network, you know, the technical, you know, qualifications? So beauty project, are very well placed. We are also evaluating various projects. And, definitely, we will target this project where, you know, traffic risk is within our visibility. Right. And place already. We are working with investors on various beauty projects. And second, with respect to apart from the road, which segment do you foresee the growth to be coming in?

29:53 So I believe there are a of opportunities coming in the railway sector as well as the metro projects. So should we see those segments where the growth will be coming in? Yes, we are participating in railways, metros, TBCV. So all these three sectors are very promising. Other than this, international markets are also good. So that vertical is also focusing on further six, seven countries. Right. Got it. So sir, do we have any strategy with respect to our domestic and overseas mix, how much are we planning to have our order book proportion in the next two, three years? How much would be the overseas and how much would be domestic?

30:44 So today, if you say it is ninety ten, 10% is overseas and 90% is domestic. Going ahead, it could be 20... Eighty twenty, and we'll see how we move ahead with our experience in various countries. But India, I think, is growing up a lot of opportunities. Right. So India opportunities grew up with, again, the remain ninety ten. Right. But, sir, when it comes to overseas, you know, which segment are we, you know, targeting apart from the roads? Or road is the only we have, whether it is roads, railways, transmission, distribution, all. Got it. Same what we do in India, we'll do it. Got it. Got it. Yeah. So that is from my side.

31:33 Thank you very much. Ladies and gentlemen, in order to ask a question, please press star and one on your touch tone telephone. I repeat, in order to ask a question, please press star and one on your touch tone telephone. As there are no further questions, I would now like to hand the conference over to management for closing comments. We thank all the attendees for this conference call, and we wish everybody a very happy Diwali and prosperous New Year.

32:20 And we are available for any queries on a one to one basis. You can call me on my number in the presentation already shared. And thanks, everybody, again. Thank you very much. On behalf of Ashoka Buildcon Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.